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To catch up with Gatorade, Coca-Cola intends to acquire sports drink brand

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(Last Updated On: February 20, 2021)

In recent years, the beverage market has entered a new round of the competition. Besides sports drinks, competition in emerging health sugar substitutes is also fierce.

It is reported Coca-Cola is preparing to bridge the gap between Powerade and Gatorade – Pepsi. By acquiring a controlling stake in the fast-growing sports drink brand BodyArmor.

Coca-Cola said that it had notified the Federal Trade Commission this week. It plans to take this step but will not comment on the details of its holdings or potential expansion.

Founded in 2011, BodyArmor is the second-largest sports drink brand in the United States. The first sports drink brand is Coca-Cola’s Gatorade under Pepsi.

To catch up with Gatorade, Coca-Cola intends to acquire sports drink brand

Coca-cola’s acquisition of a controlling stake is “Clearly possible.” But “There are other potential options for the future of the business,” Mike, chairman of BodyArmor, said in a statement on Friday.

In 2018, coca-cola took a minority stake in BodyArmor, becoming its second-largest shareholder. Its bottler became responsible for most of the beverage’s distribution. The acquisition gives coca-cola control of BodyArmor.

Gatorade was founded in 1965 and was bought by Quaker Oats Company cereal in 1983. In 2001, Pepsi acquired the Gatorade brand by buying Quaker Oats Company cereal. Gatorade is sold in 47 countries and regions around the world. In 1984, Gatorade expanded to Canada. The first time it had been sold outside the United States. In 1988, it entered Europe and South America; and in 1987, it entered Asia.

At the moment, Gatorade is the dominant force in the U.S. sports-drink sector. Followed by Powerade, which is far behind Gatorade. Over the past decade, BodyArmor has grown to become a formidable challenger to the two dominant brands. Perhaps even surpassing Powerade.

According to Beverage Digest, Bodyarmor’s U.S. sales soared 41 per cent in 2020. Compared with a nearly 1 per cent decline for the Powerade and a 9 per cent increase for Gatorade. Last year, the upstart accounted for 13 per cent of sales in the U.S. sports drink market. Which is worth about $10bn, almost as much as Powerade’s 15 per cent share. But well below Gatorade’s 70 per cent.

Critics say that although BodyArmor is more expensive, it is growing much faster than its two biggest competitors.

Once the deal is completed, it will consolidate coca-cola and Pepsi’s “Dichotomy” of the U.S. sports drink market. Except for Gatorade, Powerade, and Bodyarmor, other brands account for less than 1 per cent of the U.S. market.

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