Coke splurges $5.6B for health-focused Gatorade rival BodyArmor — its largest purchase ever

Potassium-packed Peach Mango… Coke has invested in electrolytes before: In 2018 Coke spent $300M for a 15% stake in BodyArmor, which makes coconut-water-based sports drinks. But that was just a sip. Yesterday Coke announced plans to swallow BodyArmor’s entire biz for $5.6B — its largest brand acquisition ever.

• Growth-thirsty: BodyArmor’s sales are on track to hit $1.4B this year, though Gatorade sales were still 5X higher in 2020.
• Power-aided: BodyArmor’s share of the sports-drink market has 6X’d over the past four years, surpassing Coke’s 30-year-old Powerade.
• Vita-hungry: Thanks to “healthy” branding and partnerships with pro athletes like Naomi Osaka and Mike Trout, BodyArmor’s sales have 6X’d since 2018.

Functional is fashionable… The market for “functional” beverages (think: vitamin-packed energy drinks) was worth $100B+ last year, and is expected to nearly double by 2030. Big Bev brands want a taste of the action: Pepsi bought Rockstar Energy for $4B last year, Coke acquired protein milk company Fairlife, and Dr. Pepper bought low-sugar fruit drink Bai for $1.7B.