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Castanea Partners Emerges as Lead Investor in Essentia Water’s New Round; First Beverage Also In

Beverage Business INSIGHTS:

Private equity shop Castanea Partners – not seen around bevs since its exit from Fuze Beverage nearly a decade ago – has surfaced as lead investor in private placement by Essentia Water, along with First Beverage Corp, as leading alkaline-water play gets ready to accelerate its transition from natural channel to groceries and even c-stores. Seattle-area co wouldn’t say how much it pulled in via round orchestrated by Silverwood Partners, tho it’s believed to be well north of $10 mil that co is believed to have sought in initial stages. (BBI had heard there might be role for Coke’s VEB incubation unit, but that didn’t prove to be case, not individually nor via VEB’s alliance with First Beverage, which is going in solo via First Beverage Ventures arm that numbers Purity Organic, Project Juice and Health-Ade Kombucha among its holdings.) As part of transaction, Castanea installs partner Troy Stanfield on Essentia board. Citing SPINS syndicated data, Essentia claims to hold 40 share of alkaline water segment populated by brands like Aquahydrate and Eternal Water, and is up 66% in sales so far this year.

Essentia founder/ceo Ken Uptain said both Castanea and First Beverage offer significant value beyond the checks they are writing, Castanea on social-media side (its holdings include cos in fast-moving fashion space) and back office capabilities, and First Bev via such bev vets as partner Tom First, who launched career as cofounder of Nantucket Nectars and has worked closely with investor’s portfolio cos. Essentia vp of strategy and brand development Neil Kimberley noted that Essentia preferred at this stage not to forge any strategic partnerships with big bev players out of fear that might restrict co’s ability to grow biz. Co will use proceeds to expand DSD footprint, broaden channel availability and intensify marketing under vp marketing & innovation Paul Curhan, who’s been working yoga, pilates and other self-actualization activities via field-marketing force of “hydration specialists.” NY-based Giannuzzi Group acted as Essentia’s legal counsel in deal. Note that it’s unusually active period for LA-based First Beverage lately, having managed sale of Xyience energy marketer to Big Red and other deals in works, possibly in craft beer.