A View Into Bai’s Online Success and $1.7B Acquisition

Today it is being reported that Dr. Pepper Snapple is acquiring Bai Brands for $1.7B.  This is yet another example of a CPG brand “diving in” online and using the digital channel to rapidly grow market share and drive sales. 

A year ago, a $1.7B acquisition of Bai sounded as likely as Sean Payton and Tom Brady inviting Roger Goodell over for Thanksgiving.

In less than 1 year, Bai has become the dominant brand in the Sweetened Beverages space online, and it is easy to identify exactly when they took over this market.  Chart 1 shows trended share of sales among the 3 largest brands in this space, Sparkling Ice, Bai, and Glaceau Vitaminwater: 

In December 2015, Bai became the #1 brand online in the Sweetened Beverage category, and they have not looked back. Today, for every dollar being spent on sweetened beverages online, Bai is getting 45 cents, while the other 40+ brands all fight over the remaining 55.

So what, exactly, was Bai’s online strategy?  It has been a very simple one: Double down on Amazon.com. Unlike other categories, Amazon has shown no signs of entering the beverage market. This allows for Bai to use Amazon strictly as a means to provide reach and distribution of their product.

Bai’s products can be rapidly consumed, are shelf-stable, and easy to ship.  This is the perfect combination for a subscription service, and Bai knew it.  Chart 2 shows a distribution of Bai’s online channel mix:

Congratulations to Ben Weiss and the crew from Bai Brands for identifying the perfect market, developing a great product, and being aggressive with your distribution strategy.  Hopefully Bai can act as an inspiration for the other CPG brands who are still dipping their toes in to the online channel.