BodyArmor Taking Direct Aim at Gatorade

BodyArmor

BodyArmor has rolled out its largest ad campaign to date (includes 1st TV ad), a comedic series portraying market leader Gatorade as out of touch with the needs of the modern athlete; to run during the NBA Playoffs. Conceived, written and co-directed by shareholder (and Emmy/Oscar winner) Kobe Bryant, the multi-media campaign places athletes in outdated situations; akin to high performance athletes continuing to drink Gatorade during competition (think: Porzingas using carrier pigeons to communicate with family in Latvia, video here). The campaign positions BodyArmor as the sports drink for today’s health conscious athlete, touting differences like “natural flavors and sweeteners, potassium-packed electrolytes and coconut water”; while noting the lack of innovation from Gatorade since its inception in 1965.

Howie Long-Short: BodyArmor remains privately held, but you can play the company via Dr. Pepper Snapple Group (DPS); as the company participated in a $20 million funding round in August ’15. DPS is the company’s 2nd largest shareholder, controlling 15.5% after a $6 million investment in 2017. The company will report Q1 earnings on Wednesday 4.25.18.

BodyArmor is growing rapidly, having generated $122.9 million “in the 52 weeks ending March 19” (+140% YoY). Gatorade (75%) and Powerade (20%) still control the bulk of the “sports drink” market share, with BodyArmor a distant 3rd (2%); but CEO Mike Repole projects the company will own 10% of the market by 2019, a distinct possibility after having recently added 7-Eleven, Walmart and Sam’s Club as distribution partners. For those wondering, Gatorade is owned by PepsiCo. (PEP); Powerade is a subsidiary of the Coca-Cola (KO) Co.

Fan Marino: All BodyArmor spokes-athletes have equity in the company. In addition to Bryant (the company’s #3 investor), the list of athlete-shareholders includes; Trout, Porzingas, Harden, Diggins-Smith, Andrew Luck, Rob Gronkowski, Buster Posey, LeSean McCoy, Richard Sherman, Sydney Leroux, Anthony Rizzo, Dez Bryant and Dustin Johnson.

Spurs Coach Greg Popovich didn’t make the list, but perhaps BodyArmor execs should reach out to him; as he too has recently taken aim at Gatorade. Popovich made it known that he’s not a fan of the “sugary” drink and that he remains unhappy the league’s placement of Gatorade on the post-game press conference podium. The outspoken coach said he “shouldn’t be forced to sell” their products.

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MLB Announces Multi-Year Partnership with Hankook Tires

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MLB has introduced Hankook Tire as the Official Tire of Major League Baseball, in both the United States and Korea. The multi-year sponsorship agreement will provide Hankook with exposure across MLB’s media assets (i.e. MLB Network, MLB.com, social) and in-park at “jewel events” like the ASG. Virtual ads behind the plate during post-season broadcasts will also help the tire manufacturer achieve its goal of “reaching millions of baseball fans not only in the U.S. but around the world.” Financial terms of the deal were not disclosed. Hankook becomes the 6th (7th overall) publicly traded company (or subsidiary of a publicly traded equity) to partner with MLB since January.

Howie Long-Short: Hankook Tires, the 7th largest tire company in the world (based on sales), trades on the South Korea Stock Exchange under the symbol (KRX: 161390). The company reported FY17 sales increased +2.9% YoY (attributing the growth to sales of over 17-inch high tires), but the rising cost of raw materials drove operating profit down -28% YoY (to $701 million). In 2018, the company will look to position itself as a “premium brand”; with plans to expand sales of high-inch tires in major markets and to supply OE tires for new models of major high-end auto brands.

For reference purposes, the other 5 MLB partners to have signed on in 2018, that you can invest in are:

  • Kingsford, a subsidiary of The Chlorox Company (CLX)
  • Netspend, a subsidiary of Total System Services or TSYS (TSS)
  • Snapple, a subsidiary of the Dr. Pepper Snapple Group (DPS)
  • Supercuts, a subsidiary of Regis Corporation (RGS)
  • and Mitel Networks (MITL)

Fan Marino: All 30 teams in MLB were scheduled to play today, Opening Day (the earliest start date ever), for the first time since 1968; but, “impending inclement weather” in Cincinnati is going to prevent that from happening. The Reds/Nationals game (Bailey vs. Scherzer) scheduled for 4:10p, has been postponed until tomorrow (Friday 3.30). The rainout is particularly notable as Cincinnati hosted the “opener of Openers” every year (except 2, see below) between 1876-1989.

Fun Fact: Only 3x in Reds history has the team not opened at home. In 1877 and 1966 due to rain and in 1990 when a lockout forced the team to open in Houston.

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SPONSORED TAILGATES COMING TO A CITY NEAR YOU

CFB season is underway and with that, the opportunity to BBQ in parking lots across America. Corporate sponsors are once again eager to participate in the tailgate fun, and we here at JWS wanted to bring your attention to some of those campaigns, as they make their way to a city near you.

Dr. Pepper (DPS) vendor Larry Culpepper and his new vendor dream-team, which will be unveiled throughout the new brand campaign, will host tailgates at the following games:

  • Atlanta, Georgia on December 1st and 2nd, 2017 for the SEC Championship Game
  • New Orleans, Louisiana on January 1st, 2018 for the Allstate Sugar Bowl
  • Atlanta, Georgia on January 8th, 2018 for the National Championship Game

Hyundai (KRX: 005380) will be providing a fun place to hang-out prior to the kickoff of 11 highly anticipated games. The Hyundai Fan Base is going to offer interactive elements (i.e. football toss contests) and provide fans with the opportunity to meet legends from the host school for photos & autographs. The game schedule includes:

  • 9/16 – Florida State vs. Miami
  • 9/23 – Georgia vs. Mississippi State
  • 9/30 – UCLA vs. Colorado
  • 10/7 – Florida vs. LSU
  • 10/14 – Tennessee vs. South Carolina
  • 10/21 – Texas vs. Oklahoma State
  • 10/28 – Arizona State vs. USC
  • 11/4 – Alabama vs. LSU
  • 11/11 – Ohio State vs. Michigan State
  • 11/18 – Penn State vs. Nebraska
  • 11/25 – Michigan vs. Ohio State

Wendy’s (WEN) will be hosting tailgates in 11 cities, with their food truck in tow. The home of the Official Hamburger of the NCAA will be serving cheeseburgers and offering fans a chance to compete in games of corn hole on the following college campuses:

  • 9/9 – Ohio State vs. Oklahoma
  • 9/22 – Arizona vs. Utah
  • 9/30 – Virginia Tech vs. Clemson
  • 10/7 – Syracuse vs. Pittsburgh
  • 10/14 – Nebraska vs. Ohio State
  • 10/21 – Ole Miss vs. LSU
  • 10/28 – Baylor vs. Texas
  • 11/4 – Air Force vs. Army
  • 11/11 – South Carolina vs. Florida
  • 11/18 – Arkansas vs. Mississippi State
  • 11/25 – Michigan vs. Ohio State

Howie Long-Short: College football tailgates are an intriguing place for brands to advertise. The average tailgater is a 25-44 year-old college educated male, spending 3-4 hours pre-gaming. Plenty of time to get your message across.

Fan Marino: There is nothing I enjoy more than eating and drinking in a parking lot prior to the start of a college football game. If the food, beer and entertainment are free, it becomes that much more enjoyable. Big fan of these promotions.