Liquid Asset: Inside Mark Wahlberg, Diddy and Ron Burkle's Aquahydrate Investment

Mark Wahlberg was training for his role as a boxer in The Fighter when a friend gave him a strange blue bottle, babbling something about reverse osmosis, electrolytes and alkalinity. So Wahlberg, who’d been consuming over a gallon of water per day anyway, figured he’d give Aquahydrate a shot.

“The only thing I changed was the water I was drinking,” says Wahlberg. “ I started to really feel the difference in my recovery time … I thought, ‘Well, the only thing it could be is the water.’ ”

The story may sound like pure Hollywood, but the next plot twist is the one with the makings of a blockbuster. Recognizing that Aquahydrate’s business was in “rough shape,” Wahlberg plowed some of his own cash into the company and recruited Sean “Diddy” Combs, who then convinced billionaire Ron Bukle to join as an investor.

“Mark was the person who found the product, and we kind of fell in behind Mark and his passionate belief in the product,” says Diddy. “And it was contagious.”

Together with Burkle’s Yucaipa Companies, Wahlberg and Diddy now collectively own the majority of Aquahydrate; the company has enjoyed triple-digit annual growth since 2012 and is the fastest growing water in the U.S. according to AC Nielsen. Wahlberg says each member of the trio boasts an identical double-digit percentage stake, while the original owners have been phased out of day-to-day operations and continue to hold a minority interest.

Thanks in part to the expertise of Burkle, a grocer’s son who built a billion-dollar fortune in the business and eventually diversified into the likes of Airbnb and Foursquare, Aquahydrate can now be found on physical shelves at Kroger, Safeway, GNC, Valero and the virtual shelves of Amazon.

“Ron’s involved in a lot of things,” says Wahlberg. “So obviously we were trying to get him to use every resource possible to get the water everywhere we could possibly get it, on every shelf.”

Celebrity owners aside, Aquahydrate’s claim to fame is being the leader in the nascent alkaline water space. The company touts a proprietary process by which its water is purified, infused with electrolytes and raised to a pH in excess of 9. Scientific data on the precise health benefits of alkaline water is scant at best, but method acting was evidence enough for Wahlberg.

“I’ve seen the benefits of it firsthand, so I try to encourage as many people as possible to use it,” he says. “There’s two kinds of people in the world, believers and naysayers.”

Fortunately for Wahlberg, Diddy and Burkle fall into the former camp. Diddy likes the idea of Aquahydrate as a cross between Gatorade without the sugar and Poland Spring with better flavor. And though the concept of alkaline water is a rather esoteric one for the mainstream consumer goods industry, Diddy sees it as fairly simple: If “you’re full of acid,” you need to “get your body leveled out.”

Achieving that goal, even in less-than-favorable circumstances, was one reason he decided to invest. The first time Diddy drank Aquahydrate was in Las Vegas—he ran into Wahlberg at a boxing match, and the actor gave him a couple of bottles to take back to his room.

“I went out that night and had a Vegas night, and I woke up and had a Vegas morning,” says Diddy. “I drank two of the bottles and it was like the best tasting water that I've tasted. And it really honestly helped me recover.”

He and Wahlberg almost had another celebrity partner: Tom Brady. According to Wahlberg, the Super Bowl MVP was a fan of Aquahydrate in the early going. But he decided to go a different direction when a lucrative endorsement deal with Smartwater came along.

“He was probably posed the option of either getting paid millions of dollars to endorse a brand or risking millions and millions of dollars to try and build a brand with no guarantees,” says Wahlberg.

Lately, he and Diddy have been focused on adding less famous folks to their team, most recently hiring 30-year Coca-Cola veteran Hal Kravitz to be Aquahydrate’s CEO.

“Our commitment to quality, taste, and performance coupled with marketing assets that are unsurpassed will make Aquahydrate a huge success with consumers in an already explosive category,” said Kravitz, who most recently led Coke’s Glaceau unit, in a statement.

The hiring of Kravitz may be Aquahydrate’s most telling move to date. Back in 2007, Coke bought Glaceau—which now includes Coke’s Smartwater, Powerade and Vitaminwater brands—for $4.1 billion. That deal netted 50 Cent $100 million for an equity stake he’d taken the company in lieu of a simple endorsement fee for his Formula 50 Vitaminwater flavor.

“ I'm a fan of what 50 Cent and Vitaminwater … have been able to do, but I didn't get into this to follow in their footsteps ,” says Diddy. “I want to go on whatever path we have for ourselves.”

Aquahydrate has raised over $10 million thus far, and Diddy says another round may be in the offing later this year. Similarly, Wahlberg seems to be in no rush.

“I’ve never thought about when I’m getting the money back, or how much money I can make,” he says. “I figure my primary business has always been the thing that’s taken care my bills. I’m going to build my nest egg and whatever little war chest I can have to then start to invest in things I really believe in.”

For more about the business of entertainment, check out my Jay Z book Empire State of Mind and biography Michael Jackson, Inc. You can follow me on Twitter, Facebook and by signing up for quarterly email updates.