Dr Pepper just paid $1.7 billion for a little-known brand that's a threat to Coke and Pepsi (DPS)
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Dr Pepper Snapple Group is purchasing Bai Brands, one of the fastest-growing flavored-water companies in the US, for $1.7 billion, Reuters reports.
The deal could turn Bai into a huge threat to Coca-Cola and Pepsi, which have seen soda sales plunge over the last decade as people opt for healthier drinks.
While soda sales have plummeted, Bai's sales have soared.
Bai generated $120 million in sales in 2015, and this year it's on track to reach $300 million, the company says.
Bai could grow even faster next year with the help of its new spokesman, Justin Timberlake.
Timberlake is joining the Bai team as an investor and its first chief flavor officer, the company announced last month. He will also star as the face of the brand in a $100 million marketing campaign that Bai is launching next year, the company's founder and CEO, Ben Weiss, told Business Insider.
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It will be Bai's biggest marketing campaign since its founding in 2009.
As chief flavor officer, Timberlake will work with the executive team at Bai's headquarters near Trenton, New Jersey, Weiss said.
"He'll be involved in everything from flavor innovation and product launches to marketing and digital content," Weiss said. "We will see a lot of him. His fingerprints are going to be on this brand."
Bai Brands makes drinks called Bai, Bai Bubbles, and Antiwater. The first two drinks offer fruit flavors and antioxidants with no artificial sweeteners, five calories, and one gram of sugar per serving. Antiwater has "antioxidants in the form of a super-purified bottled water," the company says.
Bai's relationship with Timberlake was forged about six months ago, when a mutual friend put Weiss in contact with the the actor and musician. Weiss said he traveled to Los Angeles to meet with Timberlake, and they talked about the possibility of a partnership.
Timberlake was a huge fan of Bai and stockpiled the drink in a place where his wife, actress Jessica Biel, wouldn't find it, according to Weiss.
"He said he found himself drinking it and storing it away from his wife in a secret little refrigerator," Weiss said. "He was very passionate about it."
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