BODYARMOR hits home run with premium sports drinks
Sports drink brand experiences triple-digit growth
Just as his 3-year-old thoroughbred Outwork thundered down the race track at the Kentucky Derby earlier this year, BODYARMOR Co-Founder and Chairman Mike Repole is in his own race as he aims to beat the competition in the $11.2 billion global sports drinks market.
BODYARMOR, a brand of Queens, NY.-based BA Sports Nutrition LLC, was co-founded by Repole and Lance Collins in 2011. After a test run on the West Coast, the premium sports drink line officially launched in 2012.
Containing 10 percent coconut water, potassium-packed electrolytes, B vitamins and vitamins A, C and E, BODYARMOR is available in all 50 states in eight flavors: Strawberry Banana, Orange Mango, Fruit Punch, Tropical Punch, Mixed Berry, Lemon Lime, Grape and Blackout Berry. Additionally, the low-sodium sports drink has no artificial flavors or sweeteners and is gluten free with no caffeine, the company says.
“I set out to make a better-for-you sports drink … [and] this, to me, was the category with massive potential and the least innovation,” Repole says. “… BA Sport’s Nutrition … is focused on the athletes’ needs of today.
“ … I’ve watched athletes between the ages of 10 and 30 evolve with their sport’s equipment, with uniforms and with training techniques, but I wondered why they were drinking the same drink I drank 35 years ago as a 10-year-old kid,” he continues. “… So our vision was to create a premium sports drink with natural ingredients and coconut water with potassium-packed electrolytes instead of sodium-packed electrolytes.”
Upgrade your sports drink
Packaged in single-serve 16-ounce bottles, BODYARMOR’s packaging proclaims, “it’s time to ditch your outdated sports drink and switch to BODYARMOR.” More consumers and athletes are sampling the sports beverage, according to market research data.
In the non-aseptic sports drink category, BODYARMOR generated $62.6 million in sales, and a triple-digit 148 percent increase year-to-date, in U.S. supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains in the 52 weeks ending June 12, according to Chicago-based Information Resources Inc. (IRI)
With 38.5 million units sold for the year ending in June, a 176 percent increase year-to-year, BODYARMOR is now the No. 3 sports drink brand behind Purchase, N.Y.-based PepsiCo Inc.’s Gatorade and Atlanta-based The Coca-Cola Co.’s Powerade and their respective SKUs, IRI data shows.
Although Gatorade and Powerade comprise 90 percent of the volume in the sports drink industry, according to New York-based Beverage Marketing Corporation’s November 2015 report titled “U.S. Sports Beverages.” Repole says there’s room for innovation in the growing sports drink category.
“Gatorade is an iconic brand that’s been around for 50 years, while Powerade has been around for 30, and I give them all the credit,” he says. “But no company has been able to compete with them head-on as a sports drink. … Our goal is to become the No. 1 sports drink.”
The brand is gaining momentum in the category, notes Frank Manning, the company’s vice president of sales in the East. “We’re having a nice year and our business is up triple-digits. We’re up 150 percent year-to-date, but if you look at sales in the last four weeks, we’re up 200 percent,” he says.
Manning adds: “We continue to grow the business, and we’ve just scratched the surface. We’re selling the hard cases now — the cases in convenience stores, the mom and pops — and we’re starting to get grocery accounts. … Once we start getting into those bigger outlets, if the timing is right, we’ll see our sales really skyrocket.”
The power of partnerships
Repole credits the company’s partnership with Plano, Texas-based Dr Pepper Snapple Group (DPS) for taking BODYARMOR to the next level by providing “distribution muscle” and carrying the brand in 34 states, enabling national distribution.
To date, DPS has invested $26 million in BODYARMOR, including an additional $6 million investment in April that raised the company’s ownership position from 11.7 to 15.5 percent, making it the second largest equity holder.
“BODYARMOR has been a winning addition to our allied brand lineup, enabling us to build our presence in the growing sports drink category with a great-tasting and differentiated product,” said Rodger Collins, DPS president of packaged beverages, in a statement at the time of the added investment.
It’s also a win-win for DPS because BODYARMOR is the first successful sports drink in its portfolio, filling an important void, Repole notes. “Dr Pepper Snapple is a leading distributor in the country, and they gave us an important route to market,” Manning says. “Our products are really incremental to them as well as to dozens of independent distributors around the country.”
Repole adds: “They made us a national brand in January. We have an incredible relationship [with DPS]. I’ve known Larry Young, Marty Ellen and Rodger Collins for close to 15 years, and the way they’ve evolved Dr Pepper Snapple Group in the past 10 years is amazing.”
Specifically, DPS has fostered the distribution of BODYARMOR in 1,850 Target stores and 2,400 Kroger stores nationwide, among many others, Repole says. “In the last 12 weeks, we were the No. 2 brand in Target and we had an 8 percent share of the category,” he says. “… The route to market is hard to get. There’s been a lot of consolidation in this industry with distributors and retailers, but if you can only cover half of the accounts, it doesn’t work. But when you have a great team and a great brand, it eventually falls into place.”
Another significant investor who has helped elevate the success of BODYARMOR is former NBA star, Los Angeles Laker’s great Kobe Bryant. Bryant became the company’s No. 3 stakeholder in 2013, according to Repole. Additionally, the brand’s eighth flavor, Blackout Berry, is inspired by Bryant’s work ethic, he adds.
A three-time MVP, Bryant, who retired from the Lakers in April, previously was an athlete-partner at glacéau vitaminwater, the enhanced water company Repole co-founded with Darius Bikoff in 1999 before they subsequently sold the company to The Coca-Cola Co. in 2007.
“When I set out to create a better-for-you sports drink, Kobe, as an elite athlete, was one of the first people I called,” Repole says. “Not only is he one of the best in all of sports, but he’s a stand-out amongst kids 10 to 15 years younger than he is and also has the perspective of being a parent to young athletes, 11 and 13. … He gave me a unique perspective.”
In addition to Bryant, 12 other professional athletes, including the Chicago Cubs Anthony Rizzo, the Seattle Seahawks Richard Sherman, the Dallas Cowboys Dez Bryant, the WNBA’s Skylar Diggins and PGA golfer Dustin Johnson, have teamed up with BODYARMOR, notes Vice President of Marketing Michael Fedele. BODYARMOR also is the exclusive sports drink provider of the NBA’s Houston Rockets and the MLB’s Los Angeles Angels, he adds.
The majority of its athlete-partners are investing in the brand because of its enhanced nutritional value and great taste, Fedele says.
“Retailers are coming to us … and so are many of our athlete-partners,” Fedele explains. “We reached out to Mike Trout early in his career; we sent him the product and he gave it to other guys on the team, which eventually led to us being the official drink of the Angels as well as the Houston Rockets and NBA star James Harden, who’s another partner-investor.
“…The most important thing in terms of these guys getting on board is that it’s authentic and they like it,” he continues. “Dustin Johnson just won the U.S. Open in golf. When we started getting him the product, his agent said he likes water, but he ended up loving BODYARMOR. … It’s a testament to where the brand is going. We want to be the hottest sport’s drink; we’re aligning ourselves with the youngest, hottest and best athletes.”
Another BODYARMOR partner-stakeholder is the Indianapolis Colts quarterback Andrew Luck who says he was at Stanford University when a trainer first introduced him to the sports drink.
“I tried it and liked how it tasted,” he says. “I started reading the label and I liked the fact that it had coconut water, was a natural product with a lot of vitamins and better-for-you ingredients. It’s drinkable and tastes really great, better than other beverages of its kind in the market. … It’s quality, quality stuff.”
When the Indianapolis Colt’s drafted Luck as their first round, first pick in 2012, he asked his agent to reach out to the makers of BODYARMOR to find out more about the company and “the rest is history,” the 26-year-old Luck says.
Whether he is working out or not, Luck says he drinks a BODYARMOR beverage every day. “When I’m working out and need more hydration, then I drink two,” he says. “Strawberry Banana is my favorite.”
The No. 12-wearing quarterback predicts the future of BODYARMOR is bright. “I think BODYARMOR is on the right path and trending in the right direction with the right team to get it done,” Luck says. “I’m proud to be part of it.”
Fueling growth through marketing
Although the endorsement of elite athletes is important, Fedele notes that more than 70 percent of sports drink consumption actually takes place off of the field.
“It’s the person walking into the convenience store, [the person] working outside during a hot day and is in need of superior hydration,” he continues. “The reality is that everyone is in need of hydration.”
When it comes to understanding athletes’ needs the company relies on an extensive field marketing program with 12 full-time regional and brand ambassadors across the country getting the sports drinks into consumers’ hands at more than 1,000 yearly retail and field marketing events.
Consumers also are connecting with the brand through social medial. The brand has 50,000 Facebook fans and soon will reach 80,000 followers on Instagram, Fedele says.
“The exciting thing about our digital and social medial presence is that it gives us the opportunity to monitor the conversation in real time. “… When we see a consumer reach out to their local retailer saying, ‘I tried this BODYARMOR at a basketball or baseball camp, why don’t you carry it?’ That’s powerful … [so then] we get a lot of inquiries from retailers.”
And having elite athletes behind the brand on eye-catching standees and other point-of-sales marketing materials fuels consumer awareness and growth, Fedele says. In the Midwest, Luck’s image, along with Rizzo and Diggins, is featured on point-of-sales materials at various retail locations, including health clubs and fitness locations, he adds.
Depending on the geographic location, large vehicles featuring wrap-around images of different athlete-partners and a specific BODYARMOR flavor hit the streets to help to publicize the brand. For example, a bright red van featuring the Los Angeles Angel’s centerfielder Trout and BODYARMOR’s Fruit Punch flavor travels throughout Southern California, he says.
“The best marketing strategy we have right now is handing a bottle to a consumer and having them open it up and try it, Repole says. “Then they see the signage: natural ingredients, coconut water, electrolytes and vitamins. It works and that’s the best messaging.”
Currently produced out of two co-packaging facilities — one in New Jersey for the East Coast and one in California for the West Coast — BODYARMOR is exploring expansion. The team is looking at co-packaging facilities in the Central, Southeast regions of the United States as well as additional facilities on the East Coast and California. “By the end of the year, we may have six [co-packaging facilities],” he says.
Vice President of Strategy and Development Brian Camus adds that other innovations are in the pipeline, including new packaging innovations with different pack sizes that will begin rolling out in 2017.
When it comes to flavors, the leadership team regularly meets to sample new flavors and currently is working with a flavor company to produce new flavors, which likely will hit the market next year.
“It takes a lot of tasting and tinkering to get it right,” Camus says. “We may sample 50 versions of a flavor and send it to our field teams and have our athlete-partners weigh-in. We might also go to a local high school and ask 15-18-year-olds what they think.”
Getting it right has always been important to Repole, a self-described Type-A personality, who says he never expected to get back into the beverage business after eight years at vitaminwater.
“…We went from $1 million our first year [in 1999] to $700 million before we sold to Coca-Cola May 25, 2007. I was so happy and proud of the accomplishment of the team, the brand and the leadership team,” he continues. “… When you accomplish something as a team, it’s hard to duplicate. So I thought I was going to climb another mountain.”
Although many of the members of the vitaminwater team, including Repole, assumed leadership positions at Pirate’s Booty and other companies between 2008 and 2011, the lure of the beverage aisle continued to captivate him, he says.
“I was unimpressed with the innovation. I was unimpressed with the whole beverage landscape,” he explains. “But I have to give a lot of credit to my BODYARMOR co-founder Lance who is focused on Core Organics in California and previously launched Fuze [iced tea] for giving me the push I needed to get back in.
“At first, I didn’t want to be involved at the level I am now. But I don’t have a mid-speed,” he continues. “I’m either going 100 mph or I’m going zero. We started BODYARMOR and did $1 million the first year, and then we did $3 million. What’s exciting is that the BODYARMOR track for the first five years is actually greater than the first five years at vitaminwater.”
Repole credits his team of 100 full-time employees with the company’s success. “We have a leadership that’s done this before, and we have a brand that we think has unlimited potential. … I think we’ll be a $150 million retail brand by the end of this year.
“… And we’re going to innovate into other categories — anything we feel is a need for today’s athletes,” he continues. “Innovation not only takes time, but you want to make sure that your timing is right and that you don’t take your focus off of your core brand. … We plan on leading the game for the next 50 years.”