Coca-Cola to Distribute Core Power Dairy Recovery Drink

Will hit 10,000 grocery, convenience, specialty stores by autumn

Core Power

FAIR OAKS, Ind. -- The Coca-Cola Co. is moving into dairy products in the United States through a distribution pact for a high-protein workout-recovery shake for athletes and fitness buffs called Core Power, reported The Wall Street Journal.

It will deliver the brand, owned by a cooperative of 87 family dairies, to stores in a handful of states on its trucks starting in July, said the report.

The move coincides with a heightened marketing push by Purchase, N.Y.-based PepsiCo Inc., which sells different versions of its industry-leading Gatorade sports drink for before, during and after workouts. PepsiCo also is launching a yogurt brand in the United States this summer with Theo Mueller Group, a German joint venture partner, as part of its expansion into dairy, the report said.

Atlanta-based Coca-Cola owns Powerade, the No. 2 U.S. sports-drink brand, but Powerade has far fewer product lines. Coca-Cola has skirted milk in the United States until now, said the report, focusing instead on soda, juice and water, although it sells dairy-based products in some other countries.

Core Power's milk-and-honey shake also competes against CytoSport Inc.'s Muscle Milk, Abbott Laboratories' EAS Myoplex and other high-protein shakes and soluble powders designed to help muscles recover and to rebuild strength after exercising.

The drink will be stocked in approximately 10,000 grocery, convenience and specialty stores by this autumn, up from about 600 currently, Stephen Jones, chief executive of Fair Oaks, Ind.-based Fair Oaks Farms Brands Inc., told the newspaper.

Originally marketed in 2009 as Athletes HoneyMilk in Texas and Colorado, the new Core Power line of products will be delivered initially in select markets via Coca-Cola Refreshments' distribution system.

Coca-Cola initially will expand distribution into Arizona, Indiana and Illinois, Steve Jones, CEO at Fair Oaks Farms Brands, who was chief marketing officer at Coca-Cola until leaving the company in 2003, told the Journal.

"This new brand is part of an exciting category for consumers and retailers that is still in the early stage of its growth potential," said Deryck van Rensburg, president of Coca-Cola North America Venturing & Emerging Brands (VEB), in a statement. He said that he views this an example of how the Coca-Cola system participates in the development of beverage brands.

Core Power will be available in 26g and 20g protein versions and comes in 11.5-ounce recyclable plastic bottles. It is aseptically packaged so can be distributed in a shelf-stable environment until chilled before consumption. Its taste profiles are enhanced through the addition of natural sweeteners and flavors. Core Power is available in honey (26g), chocolate (26g and 20g), vanilla (26g) and strawberry banana (20g). All five drinks are lactose free and gluten free. Bottles retail for about $3.

Milk is rich in protein but also contains lactose, a sugar that is difficult to digest. Fair Oaks Farms uses a patented filtration system that removes lactose but increases the level of protein. The company also sweetens the drink with monk fruit, hoping to capitalize on consumers' growing thirst for all-natural products.

Coca-Cola does not currently have an equity stake in Fair Oaks Farms and declined to comment to the Journal as to whether that might change. Coca-Cola acquired a majority stake in Zico, a coconut water brand, earlier this year as it searches for new revenue streams from small but fast-growing categories as many Americans cut back on soda, said the report.

Jones estimated the size of the U.S. market for muscle-recovery and strength-building protein aids is around $2 billion annually, including about $500 million for protein beverages. Fair Oaks Farms has sold about 4 million bottles of Core Power so far this year, he added.

Fair Oaks Farms has been outsourcing production, but it is building its own facility in Michigan.

The drink already has landed athlete endorsements, said the report, including Craig Alexander, who has won several international triathlons and Ironman competitions.