Sports Big Business No. 2706, welcome to pay attention to the leading sports industry information platform
Wen | Ma Lian Hong
Sports big business reporter
On Nov. 1, according to the Wall Street Journal, Coca-Cola would buy the remaining stake in sports drink brand BodyArmor for $5.6 billion, giving it full control of the latter, a deal that valued BodyArmor at about $8 billion.
Coca-Cola's acquisition of BodyArmor will be the largest acquisition in the sports beverage industry in recent years. People familiar with the matter said the deal could be completed in the coming weeks. After the news of the acquisition, Coca-Cola's stock price rose all the way, and as of now, Coca-Cola's market value has reached 243.486 billion US dollars. (Previous related reports: Red and Blue Wars Escalation!) Coca-Cola acquires sports drink BodyArmor against Pepsi Gatorade)
Coca-Cola bought Out BodyArmor from the stars
BodyArmor is a sports drink made from potassium and other electrolytes, vitamins and coconut water without artificial colors added, founded in 2011 in New York, USA.
The late NBA star Kobe Bryant was an early investor in BodyArmor. In 2013, Bryant set up his own investment company, and his first investment project was BodyArmor, when Kobe Bryant acquired a 10% stake in the company for a preferential price of $6 million. Under Kobe's huge influence, BodyArmor's sales reached $6.9 million in its first year, especially after BodyArmor invited Harden, George and others to endorse the brand, BodyArmor became the second largest sports drink brand in the United States.
Bryant was involved in several rounds of investments in BodyArmor, totaling about $10 million, and Kobe served on BodyArmor's board of directors before his death in 2020. Today, the investment has doubled at least 40 times, and in Bryant's estate, more than 5% of BodyArmor's shares, his widow Vanessa and her children will be able to collect more than $400 million in this acquisition.
Bryant was involved in several rounds of investments in BodyArmor during his lifetime
As early as 2018, Coca-Cola had acquired a 30% stake in BodyArmor, becoming the company's second-largest shareholder, the same year Coca-Cola began distributing the brand's products through its own national distribution system. In September 2019, Coca-Cola introduced BodyArmor to the Chinese market. At the same time, cross-border e-commerce channels, including Tmall Global Shopping, have also been sold by merchants in the form of purchasing agents.
It is understood that Coca-Cola will further buy the remaining 70% of the shares from BodyArmor co-founder Mike Repole, investors and a group of professional athletes who invested in and helped promote the drink, including NBA Harden and MLB's Trout.
Although Coca-Cola has been rising all the way in the past, the data from recent financial reports show that the growth rate of Coca-Cola has gradually slowed down. In 2012, Coca-Cola still had sales of 48.02 billion US dollars, and by 2018, there were only 31.86 billion US dollars left, and in 2019, because of the intensive renewal, its annual sales once rose to 37.28 billion yuan, but in 2020, Coca-Cola's annual sales were only 15.75 billion yuan, less than half of the sales of its heyday, while the performance of its old rival Pepsi Cola grew against the trend in this year.
All kinds of changes have made Coca-Cola have to face up to market changes, especially in recent years, the concept of health has prevailed under the epidemic, "fat house happy water" is no longer happy, and Coca-Cola has to start "de-sugaring" and launch zero-sugar Coca-Cola and other products.
This huge acquisition of BodyArmor is precisely to make up for the shortcomings in the sports beverage market. According to the data, in terms of the revenue share of the sports beverage field, Gatorade accounts for 70%, Coca-Cola's self-operated explosive sharp accounts for 15%, BodyArmor accounts for 13%, and the rest of the companies together account for 2%. Once coca-cola's acquisition of BodyArmor is completed, it will not only continue to increase the number of PEP. US) competition in the U.S. sports drink market will help Coca-Cola achieve its ambition to surpass Gatorade in the sports beverage category.
BodyArmor still benchmarks Gatorade, and the battle for the king of sports drinks intensifies
20 years ago, Coca-Cola missed an important acquisition.
Gatorade was born in the 1980s in the laboratory of the University of Florida School of Pharmacy, and "quenching thirst and quenching thirst" is its unique feature. In 2000, Coca-Cola and Pepsi simultaneously threw an olive branch to Gatorade. In the end, PepsiCo took the revenue of Gatorade's parent company under its wing for $13.4 billion.
Since then, Gatorade has successively launched a number of healthy products, including low-calorie versions, protein powder drinks, etc., and has long occupied the throne of the sports beverage industry, and its annual revenue has been growing steadily, according to goldman Sachs, a global investment analyst agency, Gatorade is expected to reach $8.1 billion in the global sports beverage market in 2021.
For Coca-Cola, the BodyArmor of this huge merger is undoubtedly the Gatorade that was lost in the past, and will become the "key match point" to balance the old rival Pepsi. Although from the perspective of market share, BodyArmor is still far behind Gatorade, and the official BodyArmor products on Tmall have been removed from the shelves, and only global shopping and other channels are available.
The Wall Street Journal believes that the current hegemony of the sports energy drink market is still PepsiCo's Gatorade, but since Coca-Cola first invested in BodyArmor in 2018, the brand's sales have grown rapidly and it has also gained a foothold in the market.
In 2018, BodyArmor's annual sales were around $400 million, and after being funded by Coca-Cola, BodyArmor's performance has risen all the way. BodyArmor's sales in the U.S. surged 41 percent in 2020, and by Feb. 6, 2021, BodyArmor's dollar sales grew 43.4 percent year-over-year, bringing the company's market capitalization above the $1 billion mark, according to Beverage Digest.
Coca-Cola's net revenue was $10.042 billion, compared to $8.652 billion in the year-ago quarter, up 16% year-over-year, with single-carton sales of water, sports drinks, tea and coffee up 6% and BodyArmor is expected to have global sales of $1.4 billion in 2021.
Not only the product, the current competition between BodyArmor and Gatorade has gradually spread to the marketing battlefield. Gatorade has been rooted in the NBA for many years and is the longest-running sponsor of the NBA; in 2021, Gatorade became the official sports drink of AC Milan; in the same year, Gatorade signed Wang Shuang to become the brand's first Chinese football player to sign.
Gatorade signed Wang Shuang to become the brand's first Chinese football player to sign
Bodyarmor has also signed well-known players such as James Harden, Dustin Johnson, and Naomi Osaka. In 2017, BodyArmor officially announced the signing of a multi-year strategic cooperation agreement with the world's top and largest professional MMA event UFC, becoming the first "official sports drink" of a fighting event; in 2019, BodyArmor entered the field of football marketing and signed a multi-year cooperation agreement with MLS; in 2020, BodyArmor and the United States Tennis Association jointly announced a cooperation agreement, the company's low-calorie beverage BodyArmor Lyte became the official sports drink of the U.S. Open. In 2021, Carrie Underwood, the best Grammy country singer, became its first entertainment star spokesperson.
BodyArmor signed a multi-year strategic cooperation agreement with the UFC
It can be said that before this transaction, BodyArmor and Gatorade have already shown a "needle to wheat" trend, and after Coca-Cola's wholly-owned acquisition of BodyArmor, the competition between the two will further intensify.
According to the previous agreement, BodyArmor will remain independent after the acquisition is completed. BodyArmor co-founder and chairman Mike Repole once shouted "either go bankrupt in 5 years or become the number one sports drink in 2025", and his thinking has not changed after the acquisition: "In the future, our leadership team and more than 400 passionate employees will continue to grow their business through the Coca-Cola system, making BodyArmor the world's number one sports drink brand." ”
Note: The images used in this article are from the Internet