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Beer Innovator Anderson Enters Emerging-Bevs Space Via Stake In Activate; Vitamin-Enhanced Water Names Haralambos Vet Holland as Proxy As It Preps Expansion Beyond LA

Beverage Business INSIGHTS:

Bill Anderson, familiar beer-world figure who’s carved out rep as innovator on distributor-financing front, has just thrown his hat into emerging-bev ring via investment in Activate, vitamin-enhanced water co-launched by former Disney chief Michael Eisner’s son Anders Eisner. Financing round of $3 mil is being made by Anders Eisner along with First Beverage Ventures subsidiary of Anderson’s First Beverage Group, until now focused on warehouse sale-leaseback deals. Activate has brought in as prexy Dan Holland, former vp/gm at Haralambos Beverage and earlier a 27-yr vet of Mission Beverage distributorship owned by Anderson family. Investment “signifies a vote of confidence from a very well-respected firm in our industry,” said Eisner’s co-founder, Burke Eiteljorg. “That endorsement, combined with Dan’s expertise, will be very helpful for us as we build relationships with distributors and retailers” as part of planned expansion. So far brand has only tested in LA, via Haralambos Beverage, whose owner Tony Haralambos is major investor. For next round, co plans to solicit investments from distributors, Bill told BBI. Activate, in functional and hydration sublines, uses cap-dispensing technology to discharge vitamins in powder form at point of consumption to avoid degradation on shelf. Functionals include Vitamin, Immunity, Antioxidant and Energy sku’s, while Workout hydration line is offered in 4 flavors. Stevia-sweetened line contains just 5 calories per bottle. “It’s hid in the lid” is slogan.

Capital Shop with Beverage-Only Focus, Including Brands and Distributors Beyond implications for brand, investment signals emergence of what could prove to be significant capital source in NA bevs. In interview with BBI this morning, Bill noted First Beverage Ventures is planning investments across all bev segments, alcoholic and NA, and is currently in “active talks” with several on both sides. Just 3 wks ago it quietly made 1st investment on alc side, in mid six figures, in Altamar Brands, developer of hi-end spirits brands established by Brown Forman vet W.L. Lyons Brown whose stable now includes Tequila Ocho, Kubler Absinthe and Right Gin. “We started with a simple assumption, that there are not enough friendly, knowledgeable investment sources” for emerging bev brands and distributorships, Bill said. “People kept saying the real estate component is great, but there really is a need for good advice and additional capital.”

To date, Anderson’s First Beverage Group (firstbev.com) has focused mainly on warehouse sale-leaseback deals involving beer distributors, and has also offered fresh thinking on potential of real=2 0estate investment trust (REIT) concept to help solve capital crunch for distributors. Co broadened purview in May with establishment of First Beverage Financial Advisors, led by former GE Capital bev banker Sean McLaren, to offer advice and mezzanine financing to cos in all bev segments. With First Beverage Ventures, “we’re now a broader financial services firm dedicated to beverages and knowledgeable across financing, marketing and distribution,” Anderson said.

In contrast to most other players, “we do nothing but the beverage business . . . We’re not looking for distressed assets and not coming in as a controlling investor.” Key advisors include former Coors strategy chief Rob Klugman, soft drink M&A specialist Marion Glover, beer distribution broker Joe Thompson and Holland. Thru Topa Equities, Anderson’s family owns major beer houses Ace Beverage and Mission Beverage in Southern Calif and Paradise Beverage in Hawaii (tho Bill’s businesses are separate). Unusually among major multi-location distribution operators, Topa’s operations span Anheuser-Busch, Miller and Coors brands, plus wide range of imports and craft brews, allowing Bill to develop breadth of experience and “non-denominational” view of potential investments. He said Activate will discuss assignment of brand to Paradise but not to Ace or Mission, whose LA territories overlap Haralambos’. More details from co shortly on distribution plans, he promised.

Activate Investment Bill said First Ventures has been evaluating brand investments for past 9 mos with particular interest in functional waters that are healthy, low-cal and have clear point of differentiation. Co was “very intrigued” by Activate’s patent-protected cap-dispensing technology, while brand’s co-founders were seeking investor with expertise in distribution as they planned move beyond LA. He credited co-founders with doing “terrific job taking it this far.” Partners will take “very distributor-centric approach” to future growth, incl looking to distribs for next capital round. No details beyond $3 mil total round from both parties.