Kobe Bryant hung up his basketball shoes with the goal of conquering the business world the same way he dominated the hardwood.
One key part of that plan resides in a small but rapidly growing sports drink company called BodyArmor. Bryant invested and began working tirelessly to turn the brand into a competitor for industry titans Pepsi‘s Gatorade and Coca-Cola‘s Powerade.
The company has set an ambitious goal of being the number one sports drink by the year 2025.
CNBC got behind-the-scenes access with Bryant while he met with CEOs of convenience stores and touted his product at NACS Show 2017, a retail trade show.
Five years ago, Bryant met Mike Repole, the Queens native credited with the creation of VitaminWater and SmartWater, billion-dollar drink brands that Coca-Cola purchased in 2007.
Repole said he left industry but returned when he spotted an opportunity to create a healthier sports drink.
“I watched sports evolve from equipment to training to uniforms, and the same sport drink from 1965 is still the drink that people are going to,” Repole said. “We created a better-for-you sports drink — natural ingredients, potassium-packed electrolytes, coconut water, vitamins.”
Bryant and Repole’s relationship evolved, and after the basketball star tore his Achilles tendon, Bryant knew he needed to think beyond basketball. He had been an endorser of Coca-Cola for many years, but the idea of starting a company from the ground up was just the challenge he wanted.
“The best way for me to learn is to actually jump into something,” said Bryant, who wrote a seven-figure check to become the company’s third largest investor.
“I told him you could lose all your money,” said Repole.
While much has been made of “super teams” in the NBA, Bryant joined what he thought would be a super team, combining the business prowess of a beverage icon with the logistics and massive distribution of a well-established brand. Dr. Pepper/Snapple group has invested more than $26 million into BodyArmor, making it the second largest investor behind Repole.
Today, BodyArmor is nationally distributed, available in convenience stores, grocery chains and sports clubs. Revenues are on track to hit $200 million this year. The company says it saw 110 percent year-over-year growth in convenience stores.
Just this month, UFC signed BodyArmor as the league’s official sports drink.
Still, despite the growth, BodyArmor is dwarfed by Gatorade and Powerade in the $6 billion category. According to Nielsen, Gatorade has a 78 percent share of the market, while Powerade has 19 percent. BodyArmor sits at a 3 percent share.
But Pepsi’s sales are slowing. In its latest earnings call, the Purchase, New York, company blamed weak convenience store traffic and weather for disappointing sales.
“We had the same weather they had. It didn’t seem to affect us,” Repole added.
Analysts are also bullish.
“Given the scale, marketing muscle, and distribution strength of the incumbents (i.e., PepsiCo and Coke), BodyArmor’s success in the sports drink industry has certainly been impressive,” said Kevin Grundy, an analyst at Jefferies.
While many athletes finish their careers and become pitchmen, Bryant is more than that. From securing sponsorship deals with international soccer tournaments to being creative director on BodyArmor’s advertising campaign, he is involved in nearly ever facet large and small of the company.
“Right from the beginning, it was always about being a partners and less about being an endorser,” said Repole. He described Bryant as a meticulous and obsessive business partner, just like he was on the basketball court.
“When you talk about obsession, I mean between us, we don’t sleep. Our best conversations are like 2:30, 3 in the morning that go on for hours,” he added.
Bryant may have a leg up in the business world as basketball has opened many doors for him and allowed him unique access to some of the top CEOs in the world.
“I speak to Mark quite often. He’s really been hands on, I’ve asked him a lot of questions about leadership…I’ve been very fortunate to have access to these people…to be able to pick up the phone and ask for advice,” Kobe said.
“We know there is a process to get there and there’s a long-term vision,” Repole said.
They’ve got an all-star lineup of endorsers including James Harden, Dustin Johnson, and Dez Bryant. Now they need to find more consumers.