Keurig Dr Pepper (KDP) this morning announced a long-term partnership with Mexican beverage company Grupo PiSA to distribute fast-rising sports drink Electrolit across the U.S., filling a major hole that KDP’s portfolio that’s been there since BodyArmor fled for the Coca-Cola distribution network back in 2019. In a press release tied to the release of the company’s Q3 earnings report, KDP announced that, starting in 2024, it will sell and distribute Electrolit in the “vast majority” of its DSD territories and across all channels of trade. After decades on the market in Mexico, Electrolit entered the U.S. in 2014 and has spent the last decade carving out a foothold in the category for its rapid-hydration drinks in square 21 ounce PET bottles. The company’s RTDs generated over $394 million in dollar sales (MULO plus-c store) in the 52-week period ended August 31. Why go after Electrolit? The move fits a familiar pattern for KDP since it splashed the cash on Bai and CORE Hydration in the late 2010s. The company has since focused on finding and aligning with high-growth-potential brands at the right stage of their development rather than outright M&A. And lately that's served them well: roughly a year after investing $863 million for a 30% ownership stake in C4 Energy parent brand Nutrabolt, along with distribution rights, dollar sales for C4 are up 72.6% year-over-year in the 52 weeks ended August 31. That was followed by similar deals with Polar in 2020, Athletic Brewing, and most recently this July when KDP took a $300 million stake (33%) in Philadelphia-based coffee roaster La Colombe and picked up licensing, manufacturing and distribution of its cold brew RTDs. But, similar to the evolution seen in energy, the sports drinks category is changing in response to a new set of consumers and need states. As seen at NACS last month, both Pepsi (Gatorade) and Coca-Cola (BodyArmor/Powerade) have used their root brands to launch sub-platforms that push further into different formats and product types (water, energy, rapid hydration, protein, powders), while names like PRIME -- already the fourth-largest category brand with well over $450 million in dollar sales this year -- and GHOST are only getting started. Don't forget there's notable upstarts like Barcode, Local Weather and Lance Collins' Recover Organic Hydration 180 vying for dollars here, too. KDP's timing on the deal is also key: Electrolit's gains -- growing 18% and now sitting as the fifth-largest brand with an over 3.6 share of the category, according to Circana data -- have come as Coke's sports drink portfolio has been in decline. Read the full story on BevNET | 
