Kobe Bryant Wants to Sell You a Sports Drink

(Bloomberg) -- Kobe Bryant has a sales meeting.

Across the table is a middle-aged man in a blue suit who works at a large convenience store chain. He’s seated in the corner of a makeshift conference room in the Las Vegas Convention Center. Outside are hundreds of suppliers of beef jerky, cigarette lighters, hot dogs, motor oil, potato chips, vape pens, beer and everything else you might expect to find at the annual trade show for the National Association of Convenience Stores. Mom-and-pop vendors display nicotine toothpicks and pickle popsicles down the hall from where Coca-Cola, Conagra, MillerCoors and other mega-corporations have booths as big as houses, with stadium-style video boards and servers passing out free samples. Monster Energy has a dance floor. Hostess has someone in a Twinkie costume.

Bryant, in a quarter-zip gray fleece and dark jeans, is there to represent Bodyarmor, a sports-drink startup looking to grab shelf space inside the nation’s gas stations and corner stores. A few minutes earlier, he was standing in front of the Bodyarmor booth with Mike Repole, the company’s co-founder and chairman. Only bottlers and buyers who work with Bodyarmor were allowed behind the ropes to shake hands and pose for pictures. A crowd of gawkers gathered on the other side.

“I’d rather be in here,” Bryant says, now that he’s away from the smartphone-wielding mob waiting outside the windowless room. “But, you know, it’s all part.”

Kobe Bryant Wants to Sell You a Sports Drink

He’s been an investor in Bodyarmor since 2014, back when it was a three-year-old brand with stalled growth. Today, Bodyarmor is a distant but fast-rising third in the U.S. sports-drink market dominated by PepsiCo’s Gatorade and Coca-Cola’s Powerade. Bryant has no title at the company; he serves as an unofficial consigliere to Repole (rhymes with “Tripoli”). At this meeting, he appears to speak for the chairman, who isn’t there.

“We’ve got to get to that next level,” says the store executive in the blue suit, who did not want to be identified in the private meeting. His stores already carry Bodyarmor and are on the way to selling a million cases a year. Now he’s angling for preferential treatment with next year’s order. “The contract is one thing,” he says, “but we need over-the-top marketing.” 

“Sure, sure, sure,” says Bryant, tapping the lid of a bottle on the table. 

Meetings like this are happening all over the convention center—people deciding what you will see the next time you stop into the corner store—but only Bodyarmor has a world-famous former NBA player handling negotiations. One of two Bodyarmor managers sitting with Bryant, dressed in matching company polos, pulls up an illustration of a refrigerator case. What’s known in the retail word as a “planogram” shows where Bodyarmor wants its new branded waters stocked in store coolers: at eye level, running across most of a full row.

The way Bryant sees it, though, the planogram is too timid. He cuts in with a different idea: “We want the whole fucking door now.”

Bryant played his last pro game in April 2016. During his 20-year career he made $328 million in salary and a similar-sized bundle in endorsements. He does not need to be at a trade show haggling over cooler space for bottled drinks. He insists that he wants to be here. 

“I love it,” he says later. “I love our team. I love our brand. I love meeting the people that are working every single day.” His voice picks up heat as he talks, almost like this is a locker-room pep talk. Does this scratch the same competitive itch that playing did? “That’s assuming I have an itch to scratch,” Bryant says. “And I don’t. Not at all. But it’s the same mentality. You win one championship, you can go on vacation all summer long or be in the gym the next day working on winning the next one. That same mentality carries through to what we are doing today, to me being here now.”

Bryant was a couple weeks shy of 13 back in 1991, when Gatorade debuted its first “Be Like Mike” advertisement with Michael Jordan. Five years later, he had lived up to the tagline and was playing against Jordan. He had patterned his game so closely on Jordan’s—from the slashing drives and soaring fade-aways to the tongue-wagging and swagger—that their first meeting was a highly anticipated chance to see Jordan play against his young doppelgänger. With Bodyarmor, Bryant seems once again to be following and seeking to outdo Jordan. 

Kobe Bryant Wants to Sell You a Sports Drink

The U.S. sports drink market, which is set to cross $8 billion in sales this year, according to Euromonitor, has been a duopoly for three decades. Gatorade, owned by PepsiCo, invented the category in 1965 and accounts for nearly 75 percent of U.S. sports-drink sales. Coca-Cola muscled into the market in 1988 with Powerade and now has about 18 percent of sales. The barrier for entry isn’t high—almost anyone can put together a formula of water, sugar, vitamins and minerals—but it remains all but impossible to match the distribution and marketing of the two behemoth brands. 

That hasn’t stopped Bryant and Bodyarmor from trying. He’s poured about $6 million into the company and owns roughly 10 percent. He got to know Repole through Glaceau Vitaminwater, where Bryant was once an endorser and Repole was president. Coca-Cola bought the brand for $4.1 billion in 2007, and now Bodyarmor appears to be headed the same way. In August, Coca-Cola announced that it was buying a minority stake and would give Bodyarmor access to its bottling and distribution network. The deal made Bryant the brand’s fourth-largest shareholder, behind Repole, Coke and Keurig Dr. Pepper. (At the price that Coke paid, Bryant’s stake is worth about $200 million, as first reported by ESPN and later confirmed by a source familiar with the deal.)

Kobe Bryant Wants to Sell You a Sports Drink

Bodyarmor had about $10 million in annual sales when Bryant first invested four years ago. Last year, according to Euromonitor, revenue hit $235 million and the startup won 3 percent of the U.S. market. Repole says the company is on pace for $400 million in sales this year. The goal, he says, is to reach $1 billion in sales in the next three years and become the No. 1 sports drink by 2025.

The landscape for athlete endorsements has changed since Gatorade agreed to pay Jordan $13.5 million over 10 years. The highest mark of success now is not to get paid millions by a blue-chip brand but to get in early on a billion-dollar start-up. Vitaminwater, as it happens, played a large part in this shift. In 2004, the company gave rapper Curtis Jackson, better known as 50 Cent, a chunk of equity as part of endorsement deal. Jackson netted somewhere from $60 to $100 million when Coca-Cola bought the brand three years later. After that, celebrities didn’t want to be mere pitchmen; they wanted to be owners and entrepreneurs.

As celebrity investors go, Bryant is particularly active. He came up with the concept for the Bodyarmor’s recent ad campaign with the cheeky tagline: “Thanks Gatorade, we’ll take it from here.” He also pitched the idea to the company’s stable of athlete endorsers, which includes Andrew Luck, James Harden, Mike Trout and Skylar Diggins-Smith, and showed up on set the day Harden shot his spot.  

Repole says he frequently seeks Bryant’s advice on difficult decisions. A few years ago, when Repole was considering adding a musician to Bodyarmor’s roster of endorsers, Bryant talked him out of it. For Bryant, the idea is to remain in the background. He is, after all, retired.

Bryant still has an endorsement deal with Nike, but his days as pitchman are mostly over. In 2003, he was accused of sexually assaulting a 19-year-old hotel employee in Colorado. Bryant said the encounter was consensual, and criminal charges were dropped when his accuser refused to testify. She later filed a civil suit against him. The two sides settled out of court, with Bryant issuing an apology but admitting no guilt.

Afterward, McDonald’s cut ties with Bryant; Nutella, another of his sponsors, let his contract expire. The episode seemed to recede from view over the next decade and a half. Last year, Bryant won an Academy Award for best animated short for “Dear Basketball,” based on a poem he wrote announcing his retirement. The #MeToo movement, however, has brought fresh scrutiny. He was dropped from the jury at a Los Angeles film festival after a petition circulated protesting his presence.

But in Las Vegas, among his fellow convenience store professionals, he finds only adulation. Well-wishers beg him to pose for selfies. A hostess from Hershey’s presses Reese’s candy bars into his hand. Grown men who run bottling plants or own hundreds of food marts turn into beaming hero worshippers.

During one of their schmooze sessions in front of the Bodyarmor booth, Repole learns that people from Costco Business Center, the big-box chain’s office-supply offshoot, are nearby. Costco is one of the few big-box retailers that doesn’t carry Bodyarmor, and Repole smells an opportunity. “Can you get us in the other Costco?” he asks as he pulls the group over to pose for a picture with Bryant. “Take a picture, so you can send it to the buyer,” he says, suggesting a caption: “This is what happens when you take Bodyarmor in your stores.’”

Repole, a 49-year-old native New Yorker who still lives in Queens, has built a considerable fortune out of “better-for-you” soft drinks and snacks. Between Vitaminwater and Bodyarmor, he invested in Pirate’s Booty, where he was chairman when the brand sold to B&G Foods for $195 million in 2013, and he briefly took a stake in Kind Bars. In every case, the appeal to consumers is roughly the same: We know you want something bad for you (soda, Cheetos, candy bars) and probably won’t choose something good for you (water, fruit, vegetables), so here is something (at least, theoretically) in between. It’s the harm-reduction model for calories.

“It's about creating better-for-you,” says Repole, “which is a little different than healthy. Sometimes when you go the healthiest, you get spinach-kale-and-broccoli chips, and everyone thinks it's really cool and they buy a bag—and they tell people, and they never buy another bag.” 

Repole talks fast, like a salesman trying to get through his spiel before the door slams. His brow drips with sweat as he joins Bryant in the conference room, just after the two made a joint walk to the Coca-Cola booth for a photo op.

Bodyarmor’s better-for-you pitch is built primarily around the fact that it has less sodium and more potassium than Gatorade. For most people, most of the time, unless you are exercising vigorously for more than hour, you’re better off drinking water and avoiding the large amounts of sugar in Bodyarmor, Gatorade and Powerade alike. 

“It depends on your level of activity,” says Bryant. 

“Real athletes look at sugar differently than just somebody’s who’s looking to hydrate,” says Repole. “They look at sugar as fuel.” Since real athletes are a very niche market, Bodyarmor last year introduced a lower-calorie offering and a SportWater brand of high-alkaline, electrolyte-infused water.

“We’re focused on athletes, but, hey, I’m a business athlete,” says Repole. “These guys are making fun of me. I’m sweating like crazy today. I got a towel. I’m playing as hard as he did in Game Seven vs. the Celtics.”

“It’s the whole Nike model,” says Bryant. “If you have a body, you’re an athlete.” 

Kobe Bryant Wants to Sell You a Sports Drink

For the big food and beverage companies, who are seeing a generation of health-conscious consumers turn away from their mainline brands, better-for-you startups are attractive targets. Coca-Cola’s purchase of a stake in Bodyarmor comes with the prospect of full acquisition. “We are evolving ourselves into a total beverage company,” says Jim Dinkins, president of Coca-Cola North America. “We're trying to challenge the status quo and make sure we're offering a wide variety of beverages.”

Bodyarmor bottles started riding on Coke’s trucks in November, in boxes jostling beside Powerade. The idea, says Dinkins, is for Bodyarmor to be a premium offering while Powerade occupies the mainstream—the same way that Smartwater sits above Dasani and Honest Iced Tea above Gold Peak, all within the vast Coke portfolio. 

This vision varies from Bryant and Repole’s plan to topple the market leaders. But for Coke, with its path to full ownership, it doesn’t much matter whether Bodyarmor overtakes Powerade or ends up as a niche product. In the meantime, Coke is happy to have a retired basketball superstar jockeying for space in the cooler with the same sharp elbows he once brought to the court.  

“We’re not done,” says Bryant. “We said we wanted to be the No. 1 sports drink. Come hell or high water, we’re going to be. Period.”

©2018 Bloomberg L.P.