2016 will serve as a milestone year in Bai Brands business timeline yet 2017 promises to be an even more defining moment. After their acquisition by Dr Pepper Snapple Group (DPS), the naturally sweetened low-calorie beverage manufacturer debuted an ad for Super Bowl LI with their celebrity investor and spokesperson, Justin Timberlake. DPS and Bai expects sales revenues to surpass $400 million, but what must be done in order for Bai to become a billion dollar brand? The company shared that the path to success is through distribution – which is undoubtedly the foundation – but what other opportunities exist?
Marketing plays a role and we’ve already witnessed this in Bai’s marketing efforts the past two years to advance brand awareness. Last year’s Horse Whisperer commercial surged Bai’s Super Bowl Sunday web traffic and this year’s commercial will surpass last year’s impact behind two celebrity endorsers. To accelerate Bai’s brand awareness, partnership efforts with music or sports properties may prove a necessary step. Consider Pom Wonderful with American Ninja Warrior, Glaceau Vitaminwater with various music festivals, or Gatorade with various national sports leagues. The hydration brands above were already recognized by the public at-large, and partnering with a cultural activity increased the brand’s relevancy beyond achieving greater exposure.
International expansion is another prime opportunity even as the core focus is to develop a national footprint in America. Bai is a desired product in other countries and international expansion must be within the scope of the brand’s future. The U.S. should be one of many key markets for the company, but not the only one. Bai must follow the path of similar brands put through an incubator process. Gold Peak (Coca-Cola) and O.N.E Coconut Water (PepsiCo) are but two examples of acquired brands undergoing their parent’s company incubation for national distribution and subsequent international availability. DPS operates subsidiaries in Canada and Latin America, and launching Bai to these geographies would be easier than launching into other geographies without DPS operations.
A robust innovation pipeline also plays an influential role for sustainable growth. Bai started out with one beverage line-up in 2009 and has extended the portfolio into tea, sparkling soda, and water. One only needs to look at Coca-Cola’s acquisition of Glaceau to understand the importance of portfolio breadth. Smartwater was an after thought when Coca-Cola coveted Vitaminwater, yet Smartwater is experiencing a spike in sales and popularity behind consumer trends. Glaceau’s acquisition gave Coca-Cola two new revenue sources, and Bai’s acquisition gives DPS four sources to leverage. Antiwater, Bai’s antioxidant-infused bottled water, could very well be the next Smartwater and DPS would now have an improved presence in this trend beverage category.
DPS is in an enviable position following the acquisition, having beat out numerous suitors for Bai. In an era where brands are bought and not homegrown, distribution is only one platform to build sucess. Bai affords DPS a potential billion dollar brand. The question is how soon. And the answer lies in how DPS employs marketing, international distribution, and innovation.