Logan Steele
In 2019, PepsiCo, the company that makes Gatorade, bought the sports nutrition company CytoSport, which manufactures the popular protein beverage brand Muscle Milk, from Hormel Foods for \$465 million. The acquisition was Pepsi's first under new CEO Ramon Laguarta and gave the company another legacy brand to add to its portfolio, allowing it to expand its product offerings in the health and wellness space.
| Characteristics | Values |
|---|---|
| Company that bought Muscle Milk | PepsiCo |
| Year of acquisition | 2019 |
| Month of acquisition | February |
| Date of acquisition | 20 |
| Company that sold Muscle Milk | Hormel Foods |
| Amount paid for acquisition | $465 million |
| Previous owner of Muscle Milk | CytoSport Holdings, Inc. |
| Year Hormel Foods acquired Muscle Milk | 2014 |
| Amount paid by Hormel Foods for Muscle Milk | $450 million |
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What You'll Learn
- PepsiCo acquired Muscle Milk from Hormel Foods for $465 million
- Muscle Milk's manufacturer is CytoSport Holdings, Inc
- Muscle Milk's products include ready-to-drink beverages and protein-based powders
- PepsiCo's experience in sports nutrition will help grow the Muscle Milk brand
- PepsiCo's acquisition of Muscle Milk will help it compete with Coca-Cola
PepsiCo acquired Muscle Milk from Hormel Foods for $465 million
PepsiCo, the maker of Gatorade, acquired the sports nutrition brand Muscle Milk from Hormel Foods for $465 million in 2019. This was Pepsi's first acquisition under new CEO Ramon Laguarta.
Hormel Foods initially acquired Muscle Milk's manufacturer, CytoSport Holdings, Inc., in 2014 for approximately $450 million. Muscle Milk's product line includes ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews. In 2017, CytoSport introduced Evolve, a plant-based and vegan protein line featuring shelf-stable protein shakes, powders, and bars.
The acquisition by PepsiCo was driven by the growing demand for protein-based products, particularly among Millennials, and the company's expertise in the sports nutrition category. As a long-standing distribution partner for CytoSport and the Muscle Milk brand, PepsiCo was already well-positioned to support the growth of the business.
With the purchase, PepsiCo aimed to expand its product offerings in the "healthier for you" segment and compete with rival Coca-Cola in the burgeoning market for protein beverages. The acquisition also included the Evolve brand, which offered plant-based options to cater to the increasing demand for plant-based products and the gut health movement.
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Muscle Milk's manufacturer is CytoSport Holdings, Inc
Muscle Milk is manufactured by CytoSport Holdings, Inc., a company founded in 1998 by the father-son duo of Greg and Mike Pickett. Based in Benicia, California, CytoSport is a manufacturer of sports-oriented nutritional products, primarily known for its line of Muscle Milk protein supplements. These supplements are available in the form of ready-to-drink beverages and powders.
In addition to Muscle Milk, CytoSport also produces other sports nutrition products, including the brands Evolve, Monster Milk, and CytoMax. Evolve, launched in 2017, is a plant-based and vegan protein line that includes shelf-stable protein shakes, powders, and bars made with pea protein.
The company has received endorsements from notable figures such as running back Adrian Peterson and college swimming coach Mike Bottom. CytoSport's products are widely recognised and distributed, with PepsiCo, the maker of Gatorade, acquiring the company in 2019 from Hormel Foods, which had purchased it for approximately $450 million in 2014.
CytoSport's manufacturing facility spans 150,000 square feet (14,000 square metres), and the company reportedly earned US$200 million in 2008. The company has also faced scrutiny over the years, with Nestle USA challenging its advertising claims and alleging that the marketing of Muscle Milk was misleading to consumers. Despite this, CytoSport has continued to grow and expand its product offerings, solidifying its position in the sports nutrition market.
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Muscle Milk's products include ready-to-drink beverages and protein-based powders
Muscle Milk offers a range of products designed to support muscle rebuilding, growth, and maintenance of muscle mass. These include ready-to-drink beverages and protein-based powders, as well as sports nutrition bars and energy chews. The ready-to-drink products include options such as Muscle Milk Pro Advanced Nutrition, which provides 40 grams of protein in a 14-ounce bottle, and the Zero line, which offers a range of flavours with zero sugar. The powders, such as the MUSCLE MILK® GENUINE Protein Powder, also provide 32 grams of high-quality protein and come in various flavours, including Banana Crème, Cake Batter, Chocolate, and Vanilla Crème.
The brand was acquired by Hormel Foods, specifically the manufacturer CytoSport Holdings, Inc., in 2014 for approximately $450 million. CytoSport debuted a second brand, Evolve, in 2017, which offers plant-based and vegan protein options. These include shelf-stable protein shakes, powders, and bars made with pea protein.
In 2019, PepsiCo, the maker of Gatorade, announced it would be acquiring CytoSport and the Muscle Milk brand from Hormel. This move was seen as a strategic decision by PepsiCo to expand its presence in the sports nutrition category, where it already had a strong distribution partnership with CytoSport. The financial details of the acquisition were not disclosed to the public.
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PepsiCo's experience in sports nutrition will help grow the Muscle Milk brand
PepsiCo, the maker of Gatorade, acquired the Muscle Milk brand from Hormel Foods in 2019. This acquisition aligns with PepsiCo's focus on sports nutrition and its strategy to gain a stronger foothold in this market.
PepsiCo has demonstrated its commitment to sports nutrition through its Gatorade brand, which offers a range of products designed to support athletes' needs before, during, and after their workouts. The G Series by Gatorade, developed with input from the Gatorade Sports Science Institute, showcases the company's expertise in this area. The series includes Prime, a pre-performance drink; Perform, an electrolyte-rich sports drink for hydration; and Recover, a beverage to aid in post-workout recovery. This holistic approach to sports nutrition and hydration has been a successful strategy for the company.
The acquisition of Muscle Milk further bolsters PepsiCo's sports nutrition portfolio. Muscle Milk offers a range of ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews. With PepsiCo's distribution network and experience in the sports nutrition category, they are well-positioned to grow the Muscle Milk brand.
Additionally, PepsiCo's commitment to innovation and staying at the forefront of sports science is evident in their job postings for Senior Scientist positions in Sports Science. These roles emphasize the importance of staying up-to-date with the latest trends and advancements in sports nutrition and applying that knowledge to product development. PepsiCo's dedication to research and innovation ensures that they remain a leader in the sports nutrition market and can effectively grow the Muscle Milk brand.
The combination of PepsiCo's distribution capabilities, experience in sports nutrition, and commitment to innovation positions them well to successfully expand the reach and impact of the Muscle Milk brand within the sports nutrition category.
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PepsiCo's acquisition of Muscle Milk will help it compete with Coca-Cola
PepsiCo's acquisition of Muscle Milk from Hormel Foods in 2019 for an undisclosed sum will help it compete with Coca-Cola in the sports nutrition and protein beverage categories. Muscle Milk, manufactured by CytoSport Holdings, Inc., offers a range of ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews. This acquisition adds another legacy brand to PepsiCo's portfolio, allowing the company to expand its product offerings in the health and wellness space.
Prior to the acquisition, Muscle Milk's brand growth had stagnated under Hormel's control. Hormel reported declining sales and recorded a non-cash impairment associated with the CytoSport business. However, PepsiCo's expertise and experience in sports nutrition, along with its strong distribution network, position it well to revitalize and grow the Muscle Milk brand.
Additionally, PepsiCo's acquisition of Muscle Milk aligns with its diversification strategy. While Coca-Cola has primarily focused on beverages, PepsiCo has been exploring growth opportunities in snacks and functional food offerings. This includes the acquisition of brands like SodaStream, Kevita, and Health Warrior, which expand PepsiCo's presence in the health and wellness category.
The addition of Muscle Milk to PepsiCo's portfolio strengthens its position in the growing protein beverage market, where it competes directly with Coca-Cola. Muscle Milk's range of protein-based products complements PepsiCo's existing sports nutrition brand, Gatorade, which has also diversified into protein beverages and bars. By leveraging its synergies with athlete sponsorships and marketing capabilities, PepsiCo can enhance the Muscle Milk brand and effectively compete with Coca-Cola in this space.
Overall, PepsiCo's acquisition of Muscle Milk demonstrates its commitment to expanding its health and wellness offerings and provides a strong platform to compete with Coca-Cola in the highly competitive sports nutrition and protein beverage market.
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Frequently asked questions
No, Gatorade did not buy Muscle Milk. However, Gatorade and Muscle Milk are now sister brands as they are both owned by PepsiCo.
PepsiCo bought Muscle Milk.
PepsiCo bought Muscle Milk on February 20, 2019.
PepsiCo bought Muscle Milk for \$465 million.
PepsiCo's acquisition of Muscle Milk was likely a strategic move to compete with Coca-Cola in the growing protein beverage category.
