Dr Pepper Snapple Group Buys into Bai Brands

Extends partnership with "allied brand" to help grow sales

Steve Holtz, Editor in Chief, CSP Daily News

Dr Pepper Snapple Group and Bai Brands

PRINCETON, N.J. and PLANO, Texas -- Dr Pepper Snapple Group has taken a minority stake in Bai Brands, the makers of Bai 5, as it often does with its "allied brands," beverage brands that are part of DPSG's distribution system but remained independently owned.

Dr Pepper Snapple paid $15 million for a 3% stake in the company, according to numerous reports confirmed by Bai Brands.

The transaction comes 17 months after DPSG added Bai Brands as an allied brand, expanding distribution of the line of all-natural, 5-calorie, antioxidant-infused beverages nationwide.

"Every day we get phone calls and letters from consumers in cities where Bai is not yet on the shelf, asking for the product," Ben Weiss, founder and CEO Bai Brands, said in November 2013. "Our relationship with Dr Pepper Snapple Group will allow us to rapidly roll-out Bai to new markets and into the hands of those consumers."

Dr Pepper Snapple Group's bottled-water category grew 9% in the first quarter of 2015 "on strong growth in Fiji, Bai 5 and Vita Coco," president and CEO Larry Young said during an earnings conference call in April.

About the investment in Bai 5, Young said, "What you saw us do and buy is an extension of what we would do in other allied brand partnerships, and it was really to solidify our partnership.

"We, obviously, think they have some good things going on in their brands, and we like their innovation pipeline. And we're happy to be their largest distributor and really partner and be able to collaborate on things. And so we made a small investment, taking some equity, as we would like to have in all of these partnerships."

Bolstered by increased distribution, Weiss told Bevnet.com that Bai’s wholesale revenue in 2014 reached $50 million. Bai is forecasting $125 million in sales to its distributors in 2015.

Bai Brands LLC is a Princeton, N.J.-based company founded in August 2009. It's Bai 5-Calorie antioxidant infusions are only 5 calories, infused with coffeefruit and flavored with exotic fruit juices.

Dr Pepper Snapple Group, Plano, Texas, is a leading producer of flavored beverages in North America and the Caribbean. In addition to its flagship Dr Pepper and Snapple brands, its portfolio includes 7UP, A&W, Canada Dry, Clamato, Crush, Hawaiian Punch, Mott's, Mr & Mrs T mixers, Peñafiel, Rose's, Schweppes, Squirt and Sunkist soda.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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