Coca-Cola Acquires BodyArmor


In 2018, the Coca-Cola group already had a 15% stake in BodyArmor. This acquisition is the largest corporate takeover ever by the American giant, overtaking its purchase of Costa Coffee in 2018 for $ 5.1 billion. Coke shares have risen 3% this year, giving it a market value of $ 244 billion. This acquisition did not happen overnight, the company has been rebuilding its portfolio to include beverages like BodyArmor as they work toward being one of the leading beverage corporations in the world.


From its humble beginning, selling one single product at a drugstore for five cents a glass, The Coca-Cola Company now serves more than 1.9 billion drinks every day and has a roster of 200 brands. In 1886, in Atlanta (Georgia), pharmacist John Pemberton created a caramel-colored syrup and added carbonated water: Coke was born. The mixture contained caffeine, sugar and for the first few years, a small amount of extract from coke leaves. At first, it was mainly promoted as a medicine; it was supposed to cure morphine addiction, and it was even used as an aphrodisiac.

By 1895, Coca-Cola was available in every state in the US, and by the 1920s and 30s, Coca-Cola had reinvented itself as an all-American soft drink, entering new markets abroad. Starting from WWII, Coca-Cola began a strategy aimed at acquiring or developing new products. Fanta was created by the German division of Coca-Cola in 1940 due to a trade embargo that had made coke’s import difficult. Then, Sprite was introduced in 1961 as a competitor to 7 Up. In 1963, Tab, the company’s first diet drink, was presented, and almost 20 years later, diet coke was launched. The consumption of sugar-sweetened beverages in the US was rising during the 1990s, but the company was about to face a massive threat. In the early 2000s, health and wellness concerns rose to the top of most consumers’ agenda and soda consumption began to decline, and it’s been declining ever since. Moreover, the company faced allegations of illegal soil and water pollution. But the market leader in the soft drinks industry has continued to expand by purchasing the UK coffeemaker Costa, launching Topo-Chico hard seltzer: making its first move into alcoholic beverages in the US in almost four decades, and lastly by investing in the sports performance drink category acquiring Body Armor.  

 Weaknesses and Threats

  • Coca-Cola had and still must face many criticisms regarding its environmental footprint. Firstly, because of its massive water usage (around 1.9 liters of water for 1 liter of coke) and secondly, in 2020, environmental group Break Free From Plastic stated that for the third year in a row, the Atlanta based company was the Top Global Polluter. Moreover, according to Greenpeace, Coca-Cola has produced over 110 billion single-use plastic bottles.
  • Lastly, the negative trend in soda consumption and the Covid-19 pandemic pose a serious threat to the soft drink maker giant.

Strengths and Opportunities

  • Coca-Cola products are sold in more than 200 countries worldwide and are highly recognizable since its brand is ranked 6th best global brand in 2020 by Interbrand.
  • Moreover, it has one of the world’s largest non-alcoholic beverage distribution systems. Coca-Cola has positioned itself in an area of the supply chain that is less capital intensive and requires less labor and overhead than rival beverage companies like Pepsi. In fact, most of its trademark beverages are not packaged and delivered by the company. In general, Coca-Cola focuses its operations on producing the concentrate for its beverages and ship those mixtures to bottlers for processing, packaging, and distribution.
  • Finally, the CEO James Quincey set an ambitious goal for the company: collect and recycle the equivalent of every bottle or can it sells by 2030. Thus, together with other initiatives such as the partnership with the Danish startup Pobaco to develop a 100% paper bottle, express the commitment of Coca-Cola to be an environmentally friendly business, that eventually will benefit all the company’s stakeholders.


BodyArmor SuperDrinks is an American sports drink company. It was founded in 2011 by Lance Collins also known for creating Fuze Beverage and NOS Energy Drink, and Mike Repole, who co-founded other energy supplement brands. With annual revenue of $71.3M and 284 employees, BodyArmor mainly operates in the United States, selling its fruit-flavoured energy drink. Beside the latter, the sports brand also sells the well-known BodyArmor Sport Water. 

BodyArmor collaborates with several athletes such as Donovan Mitchell and Carlos Vela as well as celebrities and artists including Jennifer Lopez and Carrie Underwood. Moreover, BodyArmor sponsors several important sports events being the official drink of the Major League Soccer (MLS), UFC and the US Open.   

Mike Repole set the goal to dethrone Gatorade, its number one competitor and become the first sports drink in the United States. Other sport drinks makers including Powerade are also active in the race to overtake Gatorade, meanwhile smaller players such as Ready Nutrition and BioSteel are awaiting their turn to strike into U.S. market share. 

Industry Overview:

Sports drinks are a significant part of the athletic scene in the United States, and they are becoming progressively more consumed internationally. They are supposed to help athletes to remain hydrated before and after exercise. Their contents are full of carbohydrates, minerals and electrolytes as well as sugar, water and other additives depending on the brand or flavor. Moreover, drinks come in a variety of flavors and types such as “Zero-sugar” or options with added supplements. 

In 2020, the global market was valued at $26.24 billion, $8.8 bn of which was the share of the United States.  The industry is projected to have a CAGR of 4.2% in the 2021-2028 period as international consumption and emphasis on a healthy lifestyle continue to grow. Regionally, North America is the biggest market followed by Europe, while the Asia Pacific is expected to be the fastest-growing market. Dominated by just a few major brands, the sports drink market is consolidated. The key players are PepsiCo, Coca-Cola and BA Sports Nutrition with several smaller brands without significant market share. PepsiCo produces a drink called Gatorade, which is the global leader with approximately 70% share of the market. Coca-Cola has the brand called Powerade, and with their recent acquisition of BodyArmor from BA Sports Nutrition, they should be a better fit to compete with Gatorade. 

Industry trends:

• Marketing efforts have been extending towards non-athletic consumers. In developed countries, the message is that drinks are no longer just a quick refreshment. For instance, PepsiCo launched Bolt 24, which falls under the category of functional drinks – a much wider category catering to both athletic and non-athletic consumers. There are two types of Bolt 24: “energize” and “antioxidants”. 

• Sports drink companies have been focusing on product innovation and healthier ingredients. In addition to Bolt 24 by Gatorade, Coca-Cola expanded its Powerade line to “Powerade Ultra”, which contains zero-sugar, electrolytes, creatine, BCAAs and vitamins. 

Initially, Covid-19 harmed the industry as sporting activities were being stopped and major athletic events, the marketing focus of these companies, have been canceled. However, the pandemic encouraged many to work out from home, which led to a positive demand shock. Moreover, the industry had a higher than average growth rate of 7.7%. As courtiers move closer towards pre-Covid times, the sports drink industry is also expected to benefit.

Deal Rationale

In 2018, the Coca-Cola group already had a 15% stake in BodyArmor. This acquisition is the largest corporate takeover ever by the American giant, overtaking its purchase of Costa Coffee in 2018 for $ 5.1 billion. Coke shares have risen 3% this year, giving it a market value of $ 244 billion. This acquisition did not happen overnight, the company has been rebuilding its portfolio to include beverages like BodyArmor as they work toward being one of the leading beverage corporations in the world.

Over the last three years, BodyArmor has driven continuous innovation in hydration and health & wellness products and received investments from many American sports stars, including NFL star Rob Gronkowski and NBA legend Kobe Bryant. By virtue of this transaction, the Coca-Cola group hopes to strengthen its position and gain market shares in the sports drinks sector, to compete with Gatorade of the PepsiCo group, which holds 67.7% of the market share in the US Sports Drink industry. Coca-Cola will collaborate with Repole on the company’s beverage portfolio by working on the marketing, packaging, and innovation strategies. BodyArmor will continue to be distributed by the U.S. Coca-Cola bottling system.

When Coca-Cola made its initial investment in 2018, Bodyarmor gained access to the Coca-Cola group, which allowed the brand to accelerate its growth to meet the strong consumer demand for premium sports and hydration beverages. By positioning itself as a healthier sports drink, Bodyarmor overtook Coke’s Powerade to become the second player in the category, in measured retail channels, growing at about 50% and generating more than $1.45 billion in retail sales.

Deal Structure

In February of 2021, Coca-Cola Co. notified the FTC for the pre-acquisition of the controlling stake in BodyArmor. After the initial investment of 15% of BodyArmor, in 2018, through its North American Venturing and Emerging Brands investments, for an undisclosed amount, the giant beverage company is about to acquire the remaining 85% of BodyArmor. In 2018, Coca-Cola Co. called BodyArmor “one of the fastest-growing beverage trademarks in America”. Since then, BodyArmor has grown about 50% and reached $1.4 Billion in retail sales – reaching the 2nd position in the sports drinks industry.

Regarding the specifications of this deal, we already know that this deal will value the company at about $8 Billion ($5.6 bn for around 75%) and will be an all-cash transaction. Although Coca-Cola Co. will have the controlling interest, BodyArmor will continue with its management structure led by Mike Repole and will continue to operate independently from Coca-Cola Co.

Authors: Benedetta MagniAndrew YerokhinGhali Taoussi, Gherardo Peruzzi, Joao Boavida

Sources: coca-colacompany, cnn, cnbc, britannica, britannica, bstrategyhub, fortune, reuters, thedrum,