Dr Pepper Snapple Group (DPSG) reported Q3 revenues of $1.68 billion in its quarterly financial results summary released Thursday morning, topping analysts’ projections with a 3.1 percent increase from the same period last year.
“We gained both dollar and volume share in our largest category, CSDs, in Nielsen measured markets, and our strategy of driving aligned communication and execution across our priority brands is driving positive results,” said DPSG President and CEO Larry Young. “Our allied brand partnerships are allowing us to compete in fast growing categories, and Rapid Continuous Improvement (RCI) continues to be the foundation on which the organization operates.”
Volume growth in DPSG’s non-carbonated beverages segment was flat, despite increasing 16 percent in the water category thanks to strong performance from the Bai brands, FIJI and Aguafiel. The company’s CSD segment saw a modest gain of 2 percent, along with a 1 percent increase in both fountain foodservice and bottle-can business.
For the year-to-date, DPSG has reported net sales increased 3 percent to $4.86 billion. Reported income from operations was $1.1 billion.
The earnings report and accompanying press release did not mention one of the most discussed issues of recent weeks: DPSG’s position relative to the future of one of its most successful allied brands, Bai. DPSG invested $15 million for a minority stake in the company in April, 2015, and has watched revenues from Bai’s still and sparkling lines of coffeefruit-infused “antioxidant infusion” drinks soar to nearly $120 million last year.
Reuters reported earlier this month that Bai was exploring a sale potentially worth in excess of $2 billion. The article suggested that at the time The Coca-Cola Company and PepsiCo were in a stronger position to purchase the Princeton, N.J.-based company, citing a 2015 conference call in which DPSG CFO Marty Ellen reportedly downplayed prospects for buying Bai outright due to its projected expense.
That may be changing: Reuters reported Wednesday that DPSG was already in talks with Bai regarding its acquisition. Citing sources familiar with the negotiations, the article states that DPSG is one of several parties speaking with Bai ahead of submitting official bids for the company. No exact figures were mentioned, though one source suggested that DPSG may be willing to bid in excess of $1.5 billion.
Representatives for Dr Pepper Snapple Group and Bai did not comment on the Reuters article.
The news follows last week’s announcement from Bai that actor and singer Justin Timberlake had joined the company as an investor and its first “Chief Flavor Officer.” Meanwhile, Bai unveiled a new brand extension called Bai Black at the recently held NACS 2016 show. Bai Black is a line of low-calorie sparkling drinks that come in classic soda flavors, including cola, cream soda and ginger ale.