Coca-Cola struggles to complement Powerade with BodyArmor in competing with Gatorade

Coca-Cola has struggled to integrate its $5.6 billion purchase of BodyArmor with Powerade, which led to more “disruption in the short-term” than expected, according to CEO James Quincey.

Body Armor’s sales declined in the latest quarter.

The Atlanta-based Coca-Cola is optimistic that BodyArmor will eventually complement Powerade, its other big offering in the sports-drink category, as it aims to better compete against industry heavyweight, Pepsi-owned Gatorade.

BodyArmor’s purchase is the largest acquisition in Coca-Cola’s history.

In 2018, Coca-Cola first paid an undisclosed sum for a 15% share in BodyArmor, which had revenues of around $250 million.

That amount increased to more than $1 billion in 2021 when it acquired the remaining shares of brand to increase the variety of beverages it offers.

Through the use of coconut water, low sodium and high potassium levels, the lack of artificial colors, and the addition of sugar in place of high fructose corn syrup, the fast-growing, healthier sports drink gained popularity among consumers.

The purchase of BodyArmor by Coca-Cola led to a big bet that the beverage would play a key role in building out its liquid offerings and repositioning the business into a “total beverage company.”

Coca-Cola’s U.S. sports-drink market share had slipped in recent months. Still, the Coke chief remains optimistic this year will be a turning point for BodyArmor.