International beverage conglomerate Tata Global Beverages took 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.”