The return of Anders Eisner to the leadership structure of Activate signals a capitulation of sorts by the twist-cap brand’s majority owner, the Tata Group.
Eisner, the son of former Disney CEO Michael Eisner, co-created the brand with Burke Eiteljorg as the Rising Beverage Co., Inc. in 2005. He announced Friday that he was buying the company back from its current investors and that he would be taking over the position of President. Craig Berger was taking on a dual COO/CFO role while current president Reza Mirza was departing.
The company has been seeking new investment after a heavy push into the New York and Northeast market failed to gain the brand more traction, despite heavy discounting. According to sales data compiled by A.C. Nielsen, in June, Activate’s per-unit price dropped significantly, from $1.66 per unit on average to $1.54 while the brand failed to gain new points of distribution – and in fact withdrew from regions like the South. (While Nielsen numbers are representative of only a portion of sales for an up-and-down-the-street brand like Activate, the results are still indicative of the brand’s struggles.) The drop in cost and availability took place despite a push in New York in June that encouraged consumers to “Stop Vitamin Cruelty.”
Meanwhile, the brand’s chief competitor in the mix-to-drink space, Karma, saw its share more than double by July, up to nearly $1 million in sales in the U.S. food channel with its pricing holding steady at a little more than $2 per bottle. Over the same period Activate had increased by about 13 percent, up to about $1.5 million – and the brand was just beginning its downward trajectory.
In recent weeks, according to several sources, Tata had refused to re-invest in Activate, leaving exiting president Mirza to seek financial support from other capital sources – a round that did not appear. Meanwhile, Mirza had been looking to Tata for nutrition and functional innovation to help attract more attention and consumers to the line – something that the Indian conglomerate never integrated into the brand.
Mirza announced he was adding a set of children’s beverages to the Activate line in the early fall, but the brand had already begun to cut its marketing outlay, failing to produce a booth at either Natural Products Expo East or the NACS (National Association of Convenience Stores) Show.
The overall state of the cap category remains in flux, with other competitors 989 On Demand and VBlast still very small and Gizmo Beverages’ Tea of a Kind pressurized cap still new to the market. In the past year Karma has made significant gains and was recently named to a test program in Target as part of a new functional hydration set.
Meanwhile, Activate has become something of a cautionary tale, with tens of millions of dollars and top talent like Mirza, Marketing Chief Jesse Merrill and former CEO Dan Holland able to excite distributors briefly but not the consumer base they thought would be attracted to the product line.