- Coca-Cola announced a couple of developments in its Venturing and Emerging Brands platform this week. Honest Tea is making its sports drink category debut with the upcoming launch of Honest Sport, a line of organic sports drinks.
- Wednesday, Coca-Cola purchased a stake in L.A. Aloe, which produces the plant-based Aloe Gloe brand.
- Both products are intended to appeal to consumers who are concerned about sugar and higher calories.
Coca-Cola already has one of the leading sports drink brands on the market with Powerade. But the Honest Sport line under Honest Tea, which Coca-Cola purchased in 2011, fills a different market need: organic sports drinks. It also allows Coca-Cola more cache is this trending catagory.
Sports drinks, energy shots and chews, protein snacks, and a slew of other products and categories targeted at athletes have become a battleground for major manufacturers and startups. Mintel named sports nutrition foods as one of the key food and beverage industry trends of 2016.
So far this year, PepsiCo confirmed a 2017 launch of an organic Gatorade line, which the company initially teased at the end of last year. In March, Gatorade also hinted at possible diversification in the future, including yogurt and "nitrate boosts." Dr Pepper Snapple acquired a minority stake in sports drink startup BodyArmor, which is led by the cofounder of Vitaminwater and has had several professional athletes as investors.
With PepsiCo launching an organic Gatorade line, Powerade could (and eventually may) do the same. But instead of having to reformulate Powerade and pivot its positioning for health-conscious consumers and athletes, Honest Tea has the resources and expertise to bring that product to life from scratch. Coca-Cola still reaps the benefits of the new line without the reformulation investment.
In addition to its flagship RTD tea, Honest Tea also makes a line of children's juice drinks and a zero-calorie soda line. With sports drinks among the fastest-growing categories last year, according to IRI, the category seems like a clear expansion strategy for the organic beverage maker to pursue next.