When founders Anders Eisner and Burke Eiteljorg were sitting in Denver airport four years ago, they were trying to pour a popular powdered, cold-fighting supplement into their bottled water, and making a mess. There had to be a better way, they decided. Research had shown that vitamins lose their potency when sitting in water, and the best way to get the most benefits from vitamin powders was to mix them with water just before consumption. So they worked with a design agency to create cap that featured a moisture-resistant compartment inside where ingredients could be stored and released before drinking.

Now that they had unique bottle design and a great tasting, low-calorie,
stevia-sweetened, vitamin enhanced water, all they needed to do was get it into distribution. Easy right? But they quickly discovered that navigating the supply
chain and distribution network was much trickier than they had anticipated.
They found that they had created a great brand, but lacked the industry access to expand into new markets and  grow the business to the next level.

In June 2009, Activate turned to the First Beverage Group for growth capital and advisory services to help them profitably grow the brand.  First Beverage quickly identified the need for strong beverage industry leadership at Activate, and recommended Dan Holland step in as President. Dan is an experienced beverage distribution executive, former Vice-President and General Manager of Haralambos Beverage Co. and a member of the First Beverage Advisory Council. Joth Ricci, COO of First Beverage Group and former CEO of Jones Soda, was also chosen to advise on operations and supply chain issues within Activate.

Activate quickly increased distribution, leaning on the close distributor relationships of Dan and Joth. Several operational changes helped to optimize margin and cash flow.  Sales dramatically increased from $400 thousand to $4 million by opening new geographies and gaining authorizations from several influential retailers. Over the sixteen months of the Activate and First Beverage partnership, the brand gained interest from various larger financial partners. First Beverage used its financial expertise to prepare materials and lead a successful capital raise for the brand. In December of 2010, India's Tata Group invested $6 million in Activate, symbolizing a strong confidence in the brand's direction to gain national, profitable distribution.

Activate continues to grow and gain mass appeal from consumers, retailers and distributors. Asked about the importance of the roll that First Beverage played in their continued success, co-founder Burke Eiteljorg commented "The investment signified a vote of confidence from a very well-respected firm dedicated to the beverage industry. That endorsement, combined with Dan's beverage industry expertise, was very helpful as we built relationships with distributors and retailers."

The full suite of capabilities and services offered by First Beverage Group enabled Activate to realize its vision for successful national distribution and a profitable outlook for the future. First Beverage was there to invest growth capital into the brand, contribute c-level leadership with unmatched beverage experience, and provide its knowledge and access to the industry that proved critical in making Activate a breakout success. 

Beverage Business INSIGHTS - October 26, 2010

Done Deal: Tata leads group putting a planned $21 million into Activate Brand signalling commitment of the Indian conglomerate to RTD sector in North America.

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 their key overseas focus. Now the shoe has finally dropped in the US. Tata Global Beverages Ltd is leading a group that's putting $6 million into the cap-activated Activate enhanced-water brand, with equity commitments for $15 million more down the line, as per an announcement this morning that confirmed a recent rumor of Tata's interest (BBI, Oct 15). This investment supports Tata's interest in North America while lending further credibility to the rollout of a brand that's been coveted by lots of distributors. In fact, about 20% of the newest money is coming from the distributor side, a sure sign they see potential in this latest generation of enhanced water.

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

Dan Holland told BBI that talks started about 2 months ago as Tata looked for an appropriate vehicle for a strategic push into the US. Tata liked the Activate brand and what it had accomplished in 14 months, as well as their management team and the First Beverage Group people. Tata had had dealings with Michael Eisner in the past, and Dan himself was a familiar figure to them from his earlier role on a Glaceau distributor council, in which, at the time Tata held a big stake. "It (the investment) was relationship-driven and they enjoy our model," Dan said.

Tata made their biggest splash on the RTD side with an investment in Glaceau, which it announced as a long-term deal but quickly flipped to Coca-Cola when the soft drink giant offered $4 billion for the company. Although Tata Global Beverages operates such familiar beverage brands as Tetley Tea and Eight O'Clock Coffee, it has since stayed on the sidelines in the RTD market, with execs in India offering varying statements to the Indian media over the past year on where the North American market ranks as a priority for them. The Activate deal suggests Tata is in fact determined to be significant player here.

In a 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." Their beverage unit claims to be #2 tea supplier and has annual sales of roughly $1.5 billion.

Beverage Business INSIGHTS - August 4, 2009

Holland Building DSD Net for Activate with long time distributor's Perspective; Calif, Ariz and Hawaii are initial targets

Activate Beverage president Dan Holland figures he's uniquely positioned to foster an effective working relationship with demanding DSD distributors: after all, for more than 30 years, he was of that breed himself. As reported, Dan recently left role as vp/gm of Haralambos Beverage Co in LA to run the brand launched by youthful entrepreneurs Anders Eisner and Burke Eiteljorg, in the process reuniting with Bill Anderson, core Activate investor via his First Beverage Group Ventures for whose family's beer distributorships Holland had worked in the previous 27 yrs (BBI, Jul 1). So what does that perspective mean in practical terms? Holland says prospective distributors can count on Activate maintaining 3 principles: the best agreement in the business regarding buyouts, adequate feet on street to support brand, and equity opportunity for distributor partners. "It's my 1st shot on this side of the table, but hopefully my distributor experience will help," he said. Note that similar experience is unfolding on East Coast where former Big Geyser CEO Harold Baron has jumped to CEO spot pitching Beverage Innovation's Venga functional infusions to distributors (BBI, Jul 1). Activate, of course, is among a flock of functional lines coming to market that drop active ingredients into liquid at time of use, for greater efficacy; interesting product proposition and substantial kitty have generated considerable buzz in trade.

In his initial months on the job Holland has been scrambling to assemble a comprehensive DSD network for Calif, Ariz and Hawaii by Labor Day, with Midwest markets like Ind and Ill likely next and then East Coast. In launch market, four counties of LA metro served by Haralambos Beverage, he's brought on one regional manager and is seeking two more, each of whom will hire three-five area sales reps. The brand has entered upscale retailers like Bristol Farms, Gelson's and Henry's Market, and is being presented to major grocery chains. He's confident of bringing Paradise Beverage aboard in Hawaii shortly, and is readying presentations to distributors in northern Calif and Ariz. Recruited as sales director is former Cadbury executive Joe McCoy, who'll be managing a sales force that is planned to grow to 50+ by May, not counting the East Coast. Production currently is at Chameleon Beverage in City of Commerce.

Dan readily acknowledges that 55 is a somewhat advanced age to hang out his shingle as entrepreneur for 1st time, but says he's relishing the hurly-burly. As for the split with Haralambos Beverage owner Tony Haralambos, that was amicable, coming at a time that the distributor has had to sharply downsize after losing brands like Vitaminwater, Honest Tea, Muscle Milk and several beer brands during the brands' transitions to new owners. Holland said he made the case that he wasn't as crucial to the operation right now as key sales executives. Besides, he joked, "Tony's a big investor (in Activate) - so I'm watching his money."

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