Sports Drinks in the US are on a tight race to the finish line

By MoneyTimes

Aug 20, 2015 02:20 AM EDT

When it comes to working out, all we want to do is to enhance our performance.  Many sports drinks promise immediate energy that will get you moving for the gym.  What we don't know is, most of these energy drinks have a hidden dark side - sugar and fat.

For the last five years, the total liquid refreshment beverage market has been increasing, while the U.S. carbonated soft drinks are on decline.  Consumers are not drinking fewer fluids, but only avoiding sweet sodas with high sugar content as much as possible.  So, where does the growth emanated?

Segments like bottled water, sports drinks, energy drinks, and ready-to-drink teas and coffees, have increased their share on the U.S. LRB market over the last few years.  While CSDs have a massive 41% of the total market, this percentage share is down from 47% five years ago.  The second largest segment which is the bottled water is accountable of approximately 35% of the net beverage volumes being sold in the country.

There are also other segments like the sports drinks showing solid growth that is profitable enough to entice huge beverage companies.  It seems like Dr. Pepper is being favored in the sports drinks battle.

Dr. Pepper, which is the third largest Liquid Refreshment Beverage (LRB) company in the U.S. with branches in Canada, Mexico, and the Caribbean has bought at 11.7% stake in BodyArmor, a sports drink startup, for $20 million.  It is headed by Mike Repole, co-founder of Energy Brands Inc., the maker of Vitaminwater and Smartwater, which was later acquired by Coca-Cola in 2007 for $4.1 billion.

Dr. Pepper also has the ability to grab share from its bigger rivals, Gatorade owned by PepsiCo and Powerade, owned by Coca-Cola.  Gatorade has a gigantic share of 77% while Powerade has only 20% of the market share.

BodyArmor is made with potassium-packed electrolytes, vitamins, and coconut water but doesn't use artificial colors as Gatorade does or a sweetener like corn syrup which is high in fructose content like Powerade.

With the endorsement of NBA Star Kobe Bryant with increased reach and availability, it is possible that BodyArmor will snatch some shares of Gatorade and Powerade in the market not only by virtue.

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