Last week, Bai Brands formally announced a new national distribution agreement with Dr Pepper Snapple Group (DPSG), to bring its Bai 5 brand of coffee fruit-infused drinks into the soda giant’s vast DSD network.
The deal represents the culmination of a relationship that began in early 2012 when Bai first partnered with DPSG for distribution in metro New York, followed by subsequent agreements in Northern California, Texas, and, most recently, Chicago. According to Bai Brands founder Ben Weiss, the brand, given its existing footprint and expected expansion, will be represented at retail in 90 percent of the U.S. by the end of the first quarter of 2014.
Weiss, who has long spoken of constructing a national DSD network for Bai, explained that the deal will vault Bai onto the national stage, particularly with a partner like DPSG, which he said “has a real seat at the table” and “puts a lot more wind in your sails as you look to bring on national chains and satisfy that national footprint.”
“We know together as a team what we’re getting into and how the brand performs at retail and what we need to do collectively to make this the next big breakthrough iconic beverage,” Weiss said. “If I were to do it otherwise, you’re talking about a process that takes a long time. This is not the industry where you have the luxury of really crawling or walking. At some point, you’ve got to sprint.”
Weiss declined to say whether DPSG received an equity stake in the company as part of the deal, saying only that “this a distribution deal with Dr Pepper Snapple Group.”
While Bai’s planned leap from regional to national brand is expected to be quite rapid, Weiss said that the move was years in the making. He noted that Bai has been disciplined in building what he termed as “distribution equity” and understanding how the brand performed at retail, as opposed to a broad land grab as a way to build sales.
“That kind of discipline to DSD is important,” Weiss said. “When we signed our deal with Dr Pepper in New York, we saw the value of that system, and now [are] positioned with the opportunity to go national with retailers, you see the value of using one route to market. It just makes the whole process that much easier and efficient.”
Bai joins Vita Coco as the only other entrepreneurial beverage brand distributed nationally by DPSG, which also carries Neuro and Body Armor in regional markets.
“We have tested the Bai brand in select markets with great success over the last several quarters,” Jeff Conrad, Vice President of Market Development, DPSG, said in a statement. “There is no question that Bai fits exceedingly well with our portfolio of leading brands, and we expect this new choice to be very well received by consumers from coast to coast.”
Regarding Bai’s decision to terminate contracts with distributor partners in favor of a national deal with DPSG, Weiss said simply that “no one wants to lose the Bai.”
Weiss offered what he called “a big, fat ‘no comment,’” when asked how distributors like Haralambos Beverage, among others, took the news.
“I don’t sign deals to break them,” Weiss said. “I love to keep long-standing business relationships. Sometimes, it just doesn’t work out.”