Deals

Tata Activates Cash for Rising Beverage Co. International beverage conglomerate Tata Global Beveragestook a step into the U.S. market today by taking the lead role in a $21 million investment in Activate drinks, a fast-growing line of functional waters known for its in-cap vitamin mixture.

The investment – the company’s first involving outside investors — took the form of $6 million in cash and another $15 million in financing, put Activate’s ownership into a variety of hands, including Tata, investor James Berkeley – like the Tata family a former vitaminwater investor — and a syndicate of beverage distributors. It also resulted in a larger stake for the Eisner family of Walt Disney Co. fame, who once again put in cash.

Distributors, some of whom currently distribute the brand but others, from the East Coast, where there is no current distribution, put in about 20 percent of the cash, or $1.2 million. Tata, as the lead investor in the deal, will get a board seat, according to Dan Holland, the president of Activate.

In addition to helping widen the distribution and marketing capabilities of the company domestically – Activate’s goal is to be in every state west of Colorado by the end of the year, according to Holland — the Tata investment may have international implications as well.

“Everybody’s aware of the joint venture they’ve got with Pepsi to try to bring water to the world, and our delivery system is one they’re definitely interested in,” Holland said.”It was a good mix for us, a good mix for them, and if they choose to use the cap internationally, it’s definitely something to look at.”

The cap system through which Activate drops a dry mix of functional ingredients into a bottle of water is just one of the innovations that Tata has looked at in recent years as it attempts to invest in nutrition and food, according to Henry “Bob” Hidell, who heads the bottled water consulting firm Hidell-Eyster International.

“We’re looking for leading edge, state of the art technology for delivering healthful products,” said Hidell, who is a consultant to Tata for technology and product development. “We’re not restricting ourselves to caps such as this – we’re looking at nanotechnology as well – but we’ve got a broad view and we’re seeking products that deliver health and nutrition as well.”

Lifeway Grabs First Juice. Lifeway Foods, a supplier of Kefir beverages picked up a kids product to go with its growing ProBugs line when it bought the assets of First Juice, a New Jersey-based creator of organic fruit and vegetable juice beverages for children, for $220,000.

Lifeway said that this transaction, which is the company’s third acquisition in four years, comes on the heels of its foray into the children’s market via ProBugs, a line of children’s organic kefir that are available in flavors such as orange creamy crawler, goo berry pie, strawnana split and sublime slime lime in no-spill pouches.

The acquisition created new distribution channels for the existing Lifeway products – First Juice has been sold in Babies R Us and Toys R Us stores – and also began a strategic diversification into non-dairy-based health beverages for Lifeway.

“Adding First Juice to our product portfolio strengthens our offerings in this increasingly important market space, provides cross-marketing and channel expansion opportunities, and gives us a strong new platform for building revenues,” said Julie Smolyansky, the CEO of Lifeway.