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Done Deal: Tata Leads Group Puttin’ Planned $21 Mil Into Activate Brand; Signals Commitment Of Indian Conglomerate To RTD Sector In North America

Beverage Business INSIGHTS:

Especially after its brief involvement in Glaceau, India’s Tata Group has been on everyone’s short list of likely strategic investors in cutting-edge RTD brands. But the investments haven’t come, and at various times Tata execs have pointed to other markets, like Russia, as key overseas focus. Now shoe has finally dropped in US: Tata Global Beverages Ltd is leading group that’s puttin’ $6 mil into cap-activated Activate enhanced-water brand, with equity commitments for $15 mil more down the line, per announcement this morning that confirmed recent rumor of Tata’s interest (BBI, Oct 15). Investment supports Tata’s interest inN Amer while lending further credibility to rollout of brand that’s been coveted by lotsa distributors. In fact, about 20% of newest money is coming from distrib side, sure sign they see potential in latest generation of enhanced water.

In announcement, LA-based Activate said Tata-led financing also includes vet bev investor James Berkeley, Citigroup exec who was investor in Glaceau, several distributors and such existing investors as Tornante Co and its founders Eisner family. Activate plans to use new money to continue methodical buildout of brand, which launched in LA via Haralambos Bev and to date is in just 7 western states via 28 distributors. Prexy Dan Holland, former wholesaler exec himself, said plan is to have western US covered by end of year, with next region for expansion still be to determined. Recall that earlier capital raise in Mar led by First Beverage Group, Tornante and other investors brought in $6 mil in Mar (BBI, May 6). Activate line was created by Anders Eisner, son of former Disney chief Michael Eisner, principal in Tornante, and Burke Eiteljorg. Besides eponymous flagship line it has added deionized water that vies in Smartwater space.

Dan told BBI that talks started about 2 mos ago as Tata looked for appropriate vehicle for strategic push into US. Co liked brand and what it had accomplished in 14 mos, as well as management team and First Beverage people. It had had dealings with Michael Eisner in past, and Dan was familiar figure to them from his earlier role on Glaceau distributor council, at time Tata held big stake. “It was relationship-driven and they enjoy our model,” he said.

Tata made biggest splash on RTD side with investment in Glaceau, which it announced as long-term deal but quickly flipped to Coca-Cola when soft drink giant offered $4 bil for co. Tho Tata Global Beverages operates such familiar bev brands as Tetley Tea and Eight O’Clock Coffee, it has since stayed on sidelines on RTD side, with execs in India offering varying statements to Indian media over past year on where N Amer market ranks as priority. Activate deal suggests Tata is in fact determined to be significant player here.

In statement, Peter Unsworth, group ceo of Tata Global Beverages, said: “We have ambitious growth plans and a vision to become the leader in the ‘good for you’ beverage segment. This investment is the latest piece in our strategic journey to reach consumers in different ways and to help deliver sustainable hydration across the world.” Bevs unit claims to be #2 tea supplier and has annual sales of roughly $1.5 bil.