Kobe Bryant's Sports Drink Enters Octagon in UFC Deal

(Bloomberg) -- When Pepsi announced Wednesday that beverage sales had slowed due to weaker demand for Gatorade, Kobe Bryant took to Twitter to plug his own drink brand, BodyArmor. 

“But [BodyArmor] had a HOT summer! Up over 110%+ in convenience stores,” he wrote, adding a fire emoji and the hashtag #ObsessionisNatural, a company catchphrase he came up with near the end of his 20-year NBA career. 

Bryant is the third-biggest shareholder in BodyArmor, which was founded in 2011 with the aim of upending the market long dominated by Gatorade and Coca-Cola's Powerade. The next chapter in that fight is the drink's biggest sponsorship deal yet: a partnership with mixed-martial arts juggernaut UFC.

BodyArmor co-founder Mike Repole, who helped found vitaminwater and SmartWater, said he sees parallels between the drink and the sport, both relative newcomers facing entrenched industry incumbents. “UFC is to boxing what BodyArmor is to Gatorade,” Repole said. “People are looking for newer and better.”

The UFC sponsorship, the largest marketing deal in BodyArmor's short history, is part of a larger push to get consumers familiar with the drink. During the NBA playoffs this year, the company ran its first-ever national TV ad, written, directed and narrated by Bryant.

Some UFC partners prefer to avoid the violent nature of the live events. Not BodyArmor. The brand will feature on the UFC website and social media channels as the presenting sponsor of some weigh-in events and have its logo in the octagon during fights. “They want to be authentic, and part of the actual sport,” UFC COO Lawrence Epstein said.

BodyArmor will also have two hydration stations at the UFC's new $14 million Performance Institute in Las Vegas, a popular training facility for top fighters. Conor McGregor used it as his camp leading up to the boxing megafight with Floyd Mayweather.

Bryant has been an investor in the company since 2013. Then an All-Star with the Los Angeles Lakers, Bryant had recently set up Kobe Inc. in preparation for life after basketball. Bryant's plan was to make a number of investments; he ended up making just one. (Bryant has since joined entrepreneur Jeff Stibel in a $100 million venture fund.)

Bryant said the BodyArmor deal became the template for all his investments. He asks himself, in order: Is the company leader qualified and passionate? What is the brand's position in the market and what are the barriers to entry? And lastly, is it something that I can help? BodyArmor, and Repole, satisfied all those queries.

“I always go through those checkpoints,” Bryant said. “There are a million different terms and conditions, and those come later in the deal. But it always starts with those four or five points.”

BodyArmor did $1 million in sales in its first year and expects over $200 million this year, Repole said. Still, it's a long way toward challenging the industry incumbents. Gatorade and Powerade control over 90 percent of the U.S. sports drink market, according to Euromonitor International, with Gatorade selling $6 billion at retail in 2016, and Powerade selling $1.4 billion.

--With assistance from Jennifer Kaplan

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net.

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Lena Lee