Sports beverages are everywhere. They’ve transcended their existing purpose to fuel high performance athletes in games to become a beverage for every-man. The Gatorade dominates the 22.3 billion dollar industry. Invented at the University of Florida in 1965 to replenish student-athletes carbohydrates & electrolytes. It controls about 70% of the sports beverage market. Gatorade is quite high in sodium and sugars, which is great for high level athletes to replenish their bodies during competition. The association between athletes and health has created a false narrative that Gatorade is “healthy.” As a rule of thumb drink water over Gatorade, it has tons of sugar & salt. One of the newer players in the Sports Beverage industry is Body Armor. I first drank Body Armor at the NCAA Volleyball tournament in 2019 and loved it. Our team was hoarding as much of it as we could find and looking for extra cases we could take to supplement our stash. It tasted great and it had more of the good stuff you would want in a sports drink.
Mike Repole and Lance Collins, legends of the beverage industry founded Body Armor in 2011. Repole created Glaceau, the company behind Vitamin Water and Smart Water. He also helped grow Pirates Booty, the Cheeto alternative. Collins is the founder of Fuze Beverage and NO2 energy drinks. Through their competition in the industry they built a friendship with one another. Since 2011 they’ve built a brand that has leveraged professional athletes and made waves with their product. In 2018 Coca-Cola bought a stake in the company and secured exclusive distribution rights. That valued the company somewhere around 2 billion dollars and has positioned Body Armor as an alternative to Powerade.
Through the years Mike Repole developed a reusable playbook, which he put into action at Body Armor. All his companies have “better for you” alternatives to the incumbents. Vitamin Water competes with soft drinks and offers less sugar and more vitamins. Smart Water added electrolytes to water to become a dominant player in bottled water. Pirates Booty created a line of products that were a “better-for-you” alternative than their Frito Lays chips. Body Armor has taken advantage of the same strategy; the product contains less sugar, and sodium but packs more vitamins and potassium, and has no artificial flavors. They offer a sports drink for when you’re playing, a lite beverage for every day drinking and sports water (I don’t get this one). Body Armor has made existing products better-for-you product by fortifying the with more good stuff and less bad stuff.
The most interesting part of Repole’s playbook is his use of equity as a tool for elite level endorsement. The rapper 50 Cent bought into Vitamin Water, Repole’s previous company, and became a brand spokesman for many years. He even had his own flavor, Formula 50. Body Armor reused this strategy to garner a 6 million dollar investment and endorsement from Kobe Bryant in 2014. The strategy worked. Before his death Kobe became involved in the company, attending meetings, making deals and acting as Creative Director. In his time with the company he influenced the mission; it began to lay importance in finding the best version of yourself. “Obsession is Natural,” is the line they used to challenge the next generation of athletes to find the best in themselves and get on board with their products. Kobe believed that obsession with ones craft was the only way to become an elite performer. This established a cult-like following for its mission; to help customers strive for greatness. Body Armor has created an authentic brand that challenges its consumers to demand the most from itself. Who better to embody that message than Kobe Bryant?
Incumbents have an arsenal of athletes with household names that endorse their brand. Body Armor has taken a more targeted approach and found the best of the best to back the product. Kobe’s name behind a product, and his involvement in the company has encouraged other great athletes to join the revolution. Megan Rapinoe, James Harden, Andrew Luck, Naomi Osaka and Mike Trout all support the brand and own equity. They are top performers in their sport, establishing Body Armor as the elite sports drink. The company has changed athlete endorsement strategy by adding equity into the equation. They can offer greater potential upside to athletes with higher brand value. By offering equity the company creates can create exponentially more value than a regular sponsorship deal.
Body Armor’s playbook is brilliant and they are using every trick they have to take over the beverage industry. The company aspires to be the biggest Sports Beverage company in the world by 2025 and is proving that it can. One drink has dominated last several decades; Gatorade in the 70s, Snapple in the 80s, Redbull in the 90s, Vitamin water in the 2000s and Coconut water in the 2010s.
Body Armor has done this well without leveraging the internet to build their brand. Sure they have a social media but as a consumer facing startup you have to dominate your category. They’re getting their teeth kicked in by Gatorade on this front. When I google the brand the first thing that shows up are bullet proof vests (someone please explain what normal person needs a bullet proof vest). Why haven’t they dominated their own name on search yet? I tried finding a place to buy it on their website, it sent me to Amazon. That User Experience makes a billion dollar company feel much smaller than it is. They haven’t found a way to maximize their sales directly to consumers. They could sell packs on their website and pass savings to consumers. If Body Armor maximizes their internet presence they will be the biggest player in the sports beverage market.
My favorite part about the Body Armor story is that they saw opportunity where others saw a 700 pound Gorilla. Gatorade is an enormous company and no one in their right mind would challenge them. They have owned the market for decades and crushed any and all challengers. With the right mixture of a great product and endorsements Body Armor has turned perceived disadvantages into their biggest strengths. I’d love to challenge you to do the same; where could you challenge old institutions and their strengths against them?