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BodyArmor thinks eliminating this one ingredient will help it topple Gatorade

By Jordan Valinsky, CNN

New York (CNN) — Coca Cola-owned BodyArmor is unleashing its newest beverage as part of its years-long effort to overthrow Pepsiā€™s Gatorade from its position as the top-selling sports drink brand.

Rolling out to retailers this month is BodyArmor Zero Sugar, a sugar-free version of its popular flavored sports drink, taking aim at Gatoradeā€™s G Zero beverages.

BodyArmor is differentiating itself by its ingredients ā€” or lack thereof ā€” compared to Gatorade, since it isnā€™t made with artificial sweeteners, flavors or dyes compared to its competitors.

In an exclusive interview with CNN, BodyArmor CEO Federico Muyshondt called Zero Sugar the ā€œbiggest launchā€ the 12-year-old brand, which Coke fully bought in 2021 in a $5.6 billion deal, has ever had.

ā€œItā€™s a massive opportunity for BodyArmor because itā€™s a part of a categoryĀ that represents 20% of the overall categoryĀ and where BodyArmor wasnā€™t participating in,ā€ Muyshondt told CNN. ā€œWe know that there is a consumer that looks specifically for zero sugar, and until now, BodyArmor didnā€™t have a product to play with there.ā€

BodyArmor Zero Sugar comes in four flavors, including fruit punch, lemon lime, orange and cherry lime. Itā€™s sold in three bottle sizes: 16 ounces, 20 ounces and 28 ounces.

Muyshondt added that artificial ingredients are ā€œbig barriers of entryā€ for people looking for sugar-free sports drinks. In particular, he thinks that ā€œgatekeepersā€ (i.e. parents doing the shopping for the household) have been resistant in purchasing sugar-free drinks because of that.

The sugar-free drink is a ā€œnatural expansionā€ for BodyArmor, Muyshondt said, that gives the brand more opportunity to grow at the expense of Gatorade but also to bring new drinkers into the growing category.

ā€œIn regular sports drinks and low-calorie sports drinks, BodyArmor has come in and expandedĀ the category,ā€ he said. ā€œWe are bringing in new consumers and new people into the aisle which is a great thing for our retailers and our bottlers.ā€

Sweating from competition

BodyAmor has been gaining on the dominance Gatorade has held for about six decades but still lags far behind.

Research firm Euromonitor reports that Gatorade commanded 63.5% of US sports drink marketshare in 2023, compared to BodyArmorā€™s 12% and 14.3% for its sister brand Powerade. In particular, G Zero holds 6% and Prime, the buzzy two-year-old brand, controls 1.7%.

The firm predicts that the $13 billion US market will grow to nearly $17 billion by 2027.

BodyArmor had ā€œno choiceĀ but to launch a zero sugar version to remain competitive, and this product will move the needle,ā€ said Duane Stanford, editor and publisher of Beverage Digest.

Last year was a rocky year for BodyArmor under Cokeā€™s purview. After sales for both BodyArmor and Powerade both slipped in the beginning of 2023, Coke said in its most recent earnings call that ā€œtrends are stabilizingā€ for both brands.

ā€œBodyArmor is adjusting to the next phase of competition and maturity by going after the zero sugar and powder markets while also looking outside US for growth,ā€ said Stanford. (BodyArmor has entered Canada, marking its first international market.)

Part of Cokeā€™s effort to overtake Gatorade was to revamp Powerade, which is also under Muyshondtā€™s control. Last year, the lower-priced Powerade received a makeover and a revamped recipe that boasts about twice as many electrolytes as its previous iteration.

Another factor is Prime, which announced that it was crossing $1 billion in sales last year. Although it still seriously lags Gatorade, Powerade and BodyArmor in size, Stanford said that the drink ā€œhas been a shock to the system in the US, gaining sports drink share at a pace no one thought possible.ā€

ā€œThe challenge for Gatorade and BodyArmor is to adjust to a new marketing reality while not abandoning the innovation that got them to the top,ā€ Stanford added.

BodyArmorā€™s Muyshondt said that Prime is a ā€œphenomenonĀ that weā€™ve never seen before in beverages or in food,ā€ but that isnā€™t scaring off the brand from innovating or growing.

ā€œHydration as a whole is way more than sports and thatā€™s where I think BodyArmor is ahead of the curve,ā€ said Muyshondt. ā€œBodyArmor has been positioned as a sports drink, but itā€™s way more than sports. Itā€™s about physical fitness. Itā€™s about holisticĀ health and wellness, and thatā€™s why I think BodyArmor is set to win.ā€

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