Bai’s rapid ascent
Since it was established seven years ago, Bai Brands has emerged as a fast-growing leader in the functional beverage market. In November, Dr Pepper Snapple Group announced plans to buy the beverage maker for $1.7 billion.
Established by husband and wife Ben and Danna Weiss, Bai launched a niche business producing low-calorie beverages made using coffeefruit, a source of antioxidants and sweetened with a blend of stevia and erythritol.
The business opened shop in August 2009 in Mr. Weiss’ hometown of Princeton, N.J., and grew rapidly in the five years that followed before the company signed a national distribution agreement with Dr Pepper Snapple.
The Bai brand name is something of a triple entendre — it is an acronym for “botanical antioxidant infusions,” is the Mandarin Chinese word for pure and also is a pun for its origins as a byproduct of coffee.
Mr. Weiss spent several years in the food industry before creating Bai, establishing the Godiva Theater Café concept for the Godiva business owned at the time by Campbell Soup Co.
The origins of the idea for Bai are before Mr. Weiss’ time at Campbell Soup, when he traveled to Indonesia learning about the coffee business at a time he was considering launching coffee shops. Investors ultimately weren’t interested, but his explorations helped give him the idea to produce a beverage using the antioxidant-rich red pulp from the coffeefruit that surrounds coffee beans. Antioxidants are associated with a range of potential health benefits.
The beverages contain five calories, one gram of sugar and no artificial sweeteners.
After selling the product door to door in Princeton, Mr. Weiss helped Bai sales gain critical mass through Costco Stores, an account landed in 2011.
Costco was Bai’s first national customer, and the club platform was responsible for the initial stage of Bai’s growth.
Bai’s flagship product, Bai Antioxidant Infusion, is available in 10 flavors with names like Kula Watermelon, Pana Peach and Brasilia Blueberry. Carbonated Bai Bubbles are also available in 10 flavors. Bai Black is a line of five soft drinks, including Kohala Kola and Rioja Root Beer. A line of four products made with coconut water are sold under the Cocofusion brand. The company also offers Antiwater, which contains the coffeefruit extract, and five varieties of Bai Antioxidant Supertea.
Despite its mom and pop roots, Bai’s history could not be characterized as “low profile.”
While Mr. Weiss continues to serve as chief executive officer, the company has beefed up its management ranks with a well-seasoned team. Emblematic of the roster is Ken Kurtz, the company’s president, who has more than 20 years of experience in the beverage market, including with brands such as Fiji water and Samuel Adams.
Investors in Bai include actor Ashton Kutcher and pop star Justin Timberlake. The company aired a 30-second spot during the 2016 Super Bowl, as part of a its “None of this Makes Sense” campaign, humorously addressing the question of how a healthy drink with only five calories can taste “so good.”The company has not escaped challenges either. A class action lawsuit filed in May 2014 in the U.S. District Court, Eastern District of New York, alleges that the company misled consumers by making claims about the antioxidant content and value of coffeefruit in its products. In 2015, a federal judge ruled that the lawsuit would be allowed to proceed.