Dr Pepper Snapple Group is to take its place in the lucrative sports drinks market with an 11.7% stake in sports drink start-up BodyArmor. The deal, worth $20m, pitches Dr Pepper Snapple directly against competitors Gatorade (PepsiCo) and Powerade (Coca-Cola).
With sales of sugar-sweetened beverages (SSBs) in decline in the US, the sports drink market is one that beverage companies can cash in on. The market is said to be worth $7bn and growing. Sports stars that fund or sponsor sports brands bring added kudos to products and undoubtedly increase sales.
BodyArmor is a sports drinks start-up that is led by Vitaminwater entrepreneur Mike Repole and co-founded with Lance Collins, who also founded Fuze Beverage. Both brands were subsequently sold to Coca-Cola for $4.1bn and $250m respectively.
BodyArmor is reported to have made $30m in sales in 2014, with a huge sales increase reported in the last 12 months, largely attributed to the increase in demand for sports drinks, but also due to the Dr Pepper distribution deal of 2013. The brand is set to be available in double the amount of outlets nationally by 2016.
