Business Lessons from the Former President of Red Bull

Jim Bailey used to run Red Bull Canada. Now he's in the CBD business and he sees nothing but green.
Business Lessons from the Former President of Red Bull
Image credit: Courtesy of Phivida

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Entrepreneur Staff
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6 min read

Jim Bailey didn’t have much experience with cannabis until a bad bike injury opened his eyes to its medicinal benefits. A marketing veteran, Baily was President of Red Bull Canada up until 2013 and held executive positions at Adidas and Reebok. But it wasn’t until fairly recently that he jumped to the green side as CEO of Phivida Organics, a food and beverage company that infuses organic active hemp extract into iced tea, water, and various clinical products.

Bailey sees many parallels between the energy drink and CBD-drink business. Energy drinks such as Red Bull were not yet even approved for sale in Canada when he moved to head operations there.

"I have been in business for a while, but I haven't seen the energy behind a category like I have seen with cannabis since energy drinks at the market in 1998," he says.

We talked to him to find out why he’s so excited about cannabis.

You had a bad bike accident a while back. Explain how that experienced opened your eyes to the world of cannabis.

I was cycling from Oakville to Toronto, got hit by a car and was sort of left by the side of the road. The guy didn't stop. I was so in shock that I actually got up and haled a cab home.  When I got to my house, I lay on the floor for three hours until my wife walked through the front door and said, "What in the hell is wrong with you?” I said, “I can't move I need help getting up the stairs.” I was insistent a warm bath would have fixed things up, but my wife was like, "You need more than a warm bath. I went to the hospital and learned I had a broken hip.

Related: He Broke His Neck Surfing. Now He Runs a CBD Company.

Our Health Care system in Canada is jammed right now, so I lay in the hallway of the hospital for three and a half days before they could even operate on me.

I was on a morphine drip and taking pills, and I was just delirious. As I was lying in bed, I started researching stuff because I didn't want to feel the way I was on opiates. I read about medical marijuana and CBD. I'd never been a cannabis user, but once you do that research and get beyond the scare tactics around it, it's an eye-opener.

Is that when you decided you wanted to get in the business?

I was asked by JD Belfontaine, the founder of Phivida, to sit on their Advisory Board because he'd never been in the beverage business, and I was more than happy to help a young entrepreneur out.

What were some of the learnings from Red Bull that you brought with you?

The one thing that Red Bull did very well was understand the consumer. We tapped into consumers almost quarterly to understand their sentiment around the brand. You start almost from ground zero, and you plead ignorance wanting to know: What's the consumer think about this category? How are they engaging in this category? What's the sentiment towards CBD or medical marijuana? And the research really uncovered a lot of interesting facts for us. I always tell people: The best creative and best creative platforms are driven by great research and consumer insights.

Related: Here's What the Average Cannabis Consumer in Canada Looks Like

What were some of the surprising consumer insights you learned?

One of the shocking statistics was 59 percent of CBD users are actually women. I think this is because women are more detail oriented. They research, they read, and they're looking for alternatives -- especially the younger consumer that is a little disillusioned with Western medicine.

Other interesting takeaways were the reasons people were using cannabis. The top two usage occasions were anxiety and insomnia. That really helped drive a lot of insights around the connection between mind and body. If you have a healthy mind, you have a healthy body and vice versa.

There have been a lot of negative news stories about packaging on CBD labels being incorrect or downright lies. What are you doing about this in your own company?

We made a firm stance that all the raw materials that come in are tested. We’ve had to do this because in the past we asked suppliers their potency then tested it to find out that there was less than half of the CBD they were claiming. I welcome the FDA's oversight in this category because there are some bad actors out there and those few bad actors can have a ripple effect throughout the industry,

Red Bull is famous for its masterful marketing. How are you applying that to Phivida?

One of the things I learned from Dietrich Mateschitz, the founder, was his profound vision. When you talked to him, he wasn't talking six months out or a year out; he was talking five years out. In 2008, when the world was in the worst recession ever, Dietrich actually upped the marketing spend. His philosophy was if you stick with the consumer during the tough times, they'll be even more loyal when things turn around.

Related: How to Finesse FDA Regulations and Successfully Market Your CBD Business

Let’s say an entrepreneur doesn’t have the money to do research, what would you recommend?

It comes down to prioritizing what you're going to spend your money on. Many people don't necessarily see that value in that consumer research, but they also don't understand that your brand positioning, your creative platform, is all hinged to that consumer research and insights

What are your predictions for the future of CBD?

Hopefully, the floodgates will be completely open up for traditional retail, and I think it's going to be the hottest category to hit retail. I look at CBD  the health and wellness benefits of the product, and I think that's sustainable over time. It's just going to keep growing and growing especially with this younger demographic who are challenging traditional ways of thinking about medicine.




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