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Dr Pepper Snapple Buys Bai In $1.7B Bid To Bolster 'Healthy' Brands

Posted On: 11/23/2016

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TAGS: vending, Dr Pepper Snapple Group Inc., PepsiCo, alternative drinks makers, Bai Brands, KeVita

Dr Pepper Snapple Group Inc. and PepsiCo both revealed plans to buy alternative drinks makers, continuing the trend to counter soda sales declines. Both beverage companies are branching into products perceived as healthier.

Dr Pepper Snapple, which makes flavored tea, juice drinks, 7UP and Schweppes sodas, is purchasing New Jersey-based Bai Brands, one of the fastest-growing flavored-water companies in the U.S., for $1.7 billion, Reuters reported this week. The deal could turn Bai into a major competitor to Coca-Cola and Pepsi, which have seen soda sales plunge over the past decade. While soda sales have tumbled, Bai's sales have soared.

PepsiCo said it will buy KeVita Inc., a probiotic drinks maker, for an undisclosed amount. Reuters reported that the soda giant is working on closing a deal, estimated at under $500 million, for Oxnard, CA-based KeVita.

Bai, which means "pure" in Mandarin Chinese, produces carbonated flavored water, coconut water and premium ready-to-drink teas. KeVita makes a fermented tea product called kombucha and other drinks that are certified organic, gluten-free and vegan.

Demand for carbonated soft drinks hit a 30-year low in the U.S. last year, according to Beverage Digest. Governments around the world are considering sugary drinks taxes to try to stem obesity and diabetes. Five U.S. regions approved such levies in November.

In related news, Pepsi announced in October that two-thirds of its drinks will have 100 calories or fewer, per 12-fl.oz. serving, from added sugar by 2025. Sugary beverages currently make up 40% of PepsiCo's drinks. | SEE STORY