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New Investment Is a Win for Coca-Cola, BodyArmor... & Kobe Bryant?
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It was announced on Tuesday that Coca-Cola Co (KO - Free Report) is investing in BodyArmor, an up-and-coming sports drink brand. The investment will make Coca-Cola the second largest shareholder in the company, with former Los Angeles Lakers star Kobe Bryant being the third largest.
BodyArmor, founded in 2011, positions itself as a healthier alternative to the main sports drinks already in the market. The drink doesn’t use artificial sweeteners and is coconut water based, therefore targeting more health-conscious consumers.
Currently, the brands at the top of the industry are Pepsi’s (PEP - Free Report) Gatorade and Coca-Cola’s own Powerade. BodyArmor is seen as a threat to these two sports drinks, but Coca-Cola won’t need to worry about that anymore after this strategic investment.
Instead, Gatorade will have to fight off BodyArmor as it attempts to take the throne of the sports drink market, although the company has seen progress itself in adapting to the latest trends in the beverage space.
In June, Gatorade Zero was released, making it Gatorade’s first zero sugar drink that was created for people concerned about their sugar intake. However, BodyArmor boasts various products which are low in sugar and “SportWater,” which is completely sugar-free.
BodyArmor has been challenging Gatorade for awhile now, even running an ad campaign with the tagline, “Thanks, Gatorade. We’ll take it from here.”
In addition to BodyArmor helping Coca-Cola battle Pepsi, the move diversifies Coca-Cola’s product portfolio and decreases its dependence on traditional carbonated drinks. Coca-Cola’s carbonated drink business only grew 2% in the second-quarter, down from 4% growth in the first-quarter.
The company’s total soda segment has been hurt by consumer tastes shifting more towards non-carbonated beverages like sports drinks, teas, and flavored waters. Additionally, potential new taxes on sugar-sweetened drinks and growing regulatory pressures are affecting sales. By investing in BodyArmor, Coca-Cola will be less exposed to these risks in the soda industry.
Ultimately, the investment has great potential for Coca-Cola and could generate a positive spark in the company’s stock. Shares of the company have been mainly stagnant for all of the last 12 months.
While this is a well thought-out move by Coca-Cola that will generate headlines, an intriguing side story is Kobe Bryant’s stake in BodyArmor and his strength as an investor. Bryant first invested in BodyArmor in 2013, and he sits on the board of directors. The Laker legend discovered BodyArmor while rehabbing from a torn Achilles tendon during his playing days.
BodyArmor did $3 million in sales in 2012 when Bryant first started talking about a deal. In 2017, that number was at $235 million. Those sales should only go up with Coca-Cola’s help.
Not known to many people, Bryant is a partner of Bryant Stibel & Company, a fund that partakes in venture capital and growth equity. The fund notably invested in Alibaba (BABA - Free Report) shortly before it had the largest global IPO in history.
Bryant has stated goals of turning BodyArmor into the number one sports drinks in the world by 2025. Accomplishing that would make him and Coca-Cola two very happy investors.
To hear more about the BodyArmor story and how Kobe Bryant got involved, check out this episode of our Full-Court Finance Podcast:
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
New Investment Is a Win for Coca-Cola, BodyArmor... & Kobe Bryant?
It was announced on Tuesday that Coca-Cola Co (KO - Free Report) is investing in BodyArmor, an up-and-coming sports drink brand. The investment will make Coca-Cola the second largest shareholder in the company, with former Los Angeles Lakers star Kobe Bryant being the third largest.
BodyArmor, founded in 2011, positions itself as a healthier alternative to the main sports drinks already in the market. The drink doesn’t use artificial sweeteners and is coconut water based, therefore targeting more health-conscious consumers.
Currently, the brands at the top of the industry are Pepsi’s (PEP - Free Report) Gatorade and Coca-Cola’s own Powerade. BodyArmor is seen as a threat to these two sports drinks, but Coca-Cola won’t need to worry about that anymore after this strategic investment.
Instead, Gatorade will have to fight off BodyArmor as it attempts to take the throne of the sports drink market, although the company has seen progress itself in adapting to the latest trends in the beverage space.
In June, Gatorade Zero was released, making it Gatorade’s first zero sugar drink that was created for people concerned about their sugar intake. However, BodyArmor boasts various products which are low in sugar and “SportWater,” which is completely sugar-free.
BodyArmor has been challenging Gatorade for awhile now, even running an ad campaign with the tagline, “Thanks, Gatorade. We’ll take it from here.”
In addition to BodyArmor helping Coca-Cola battle Pepsi, the move diversifies Coca-Cola’s product portfolio and decreases its dependence on traditional carbonated drinks. Coca-Cola’s carbonated drink business only grew 2% in the second-quarter, down from 4% growth in the first-quarter.
The company’s total soda segment has been hurt by consumer tastes shifting more towards non-carbonated beverages like sports drinks, teas, and flavored waters. Additionally, potential new taxes on sugar-sweetened drinks and growing regulatory pressures are affecting sales. By investing in BodyArmor, Coca-Cola will be less exposed to these risks in the soda industry.
Ultimately, the investment has great potential for Coca-Cola and could generate a positive spark in the company’s stock. Shares of the company have been mainly stagnant for all of the last 12 months.
While this is a well thought-out move by Coca-Cola that will generate headlines, an intriguing side story is Kobe Bryant’s stake in BodyArmor and his strength as an investor. Bryant first invested in BodyArmor in 2013, and he sits on the board of directors. The Laker legend discovered BodyArmor while rehabbing from a torn Achilles tendon during his playing days.
BodyArmor did $3 million in sales in 2012 when Bryant first started talking about a deal. In 2017, that number was at $235 million. Those sales should only go up with Coca-Cola’s help.
Not known to many people, Bryant is a partner of Bryant Stibel & Company, a fund that partakes in venture capital and growth equity. The fund notably invested in Alibaba (BABA - Free Report) shortly before it had the largest global IPO in history.
Bryant has stated goals of turning BodyArmor into the number one sports drinks in the world by 2025. Accomplishing that would make him and Coca-Cola two very happy investors.
To hear more about the BodyArmor story and how Kobe Bryant got involved, check out this episode of our Full-Court Finance Podcast:
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>