Dive Brief:
- Keurig Dr Pepper will sell and distribute Electrolit, a premium hydration beverage, as part of a long-term sales and distribution agreement with Grupo PiSA. The partnership expands Keurig Dr Pepper’s portfolio into sports hydration, which it called “a key white space category for the company.”
- The businesses said Electrolit ”has a long runway for growth among a broad multi-cultural consumer base” that it can tap into using Keurig Dr Pepper’s distribution network. Electrolit already has a strong following among the Hispanic demographic and in certain regions.
- While Keurig Dr Pepper is best known for the coffee and soda brands within its corporate name, it has been rapidly growing its reach into trendier categories, largely by entering into distribution deals like with Electrolit, or by taking a minority stake in a brand.
Dive Insight:
Rapid hydration is no stranger to U.S. consumers, with PepsiCo’s Gatorade and Coca-Cola’s BodyArmor and Powerade the dominant brands in the multi-billion dollar category.
Keurig Dr Pepper once owned a stake in BodyArmor, but the beverage is now fully owned by Coca-Cola. The move to reenter rapid hydration fits with a broader strategy at Keurig Dr Pepper to move beyond its core beverage offerings.
In the last few years, Keurig Dr Pepper participated in a funding round for energy drink A Shoc. It expanded its presence in non-alcoholic beer by purchasing a minority stake in Athletic Brewing through a $50 million investment in November. A month later, the Texas-based company acquired a 30% stake in Nutrabolt, the maker of energy drinks such as C4 Energy and Xtend Energy, for $863 million.
And this past July, it entered into a strategic partnership with La Colombe that included a sales and distribution agreement for its drinks and a licensing, manufacturing and distribution deal for its coffee pods. Keurig Dr Pepper also spent $300 million to buy a 33% stake in La Colombe.
Electrolit entered the U.S. market in 2014. Since then, the brand has grown to become a top 5 trademark in the $11 billion sports hydration category at U.S. retail, the companies said. Electrolit is growing at a strong double-digit rate in the U.S. The beverage generates more than $400 million in retail sales, which have increased more than ten-fold during the past five years.
“We are thrilled to enter the sports hydration category with Electrolit, broadening our portfolio to address this important beverage occasion for our consumers,” said Andrew Archambault, president of commercial and beverage concentrates at Keurig Dr Pepper. “Electrolit is a differentiated brand with tremendous consumer appeal, and KDP’s proven sales and distribution capabilities are poised to unlock its significant growth potential.”
While most rapid hydration products target fitness, Electrolit manufactures what it calls “a scientifically formulated premium hydration beverage” that goes beyond just athletes to also target party goes. This should give it an even broader appeal among consumers.
Keurig Dr Pepper and Electrolit noted that the rapid hydration brand already has a strong following in certain areas.
Keurig Dr Pepper will bring to the partnership its wide distribution network in stores and multiple channels to grow the brand’s presence and further accelerate sales across a wider swatch of consumers— likely tapping into the same playbook the CPG giant has used to boost sales with other beverages it has worked with.
The transition of Electrolit distribution to Keurig Dr Pepper will occur in early 2024. Other terms of the deal were not disclosed.
