The first time Sean “Diddy” Combs took a sip of Aquahydrate alkaline water—given to him by pal Mark Wahlberg at a Las Vegas boxing match in the early 2010s—he found it to be an ideal antidote for evenings spent consuming adult beverages.



“I went out that night and had a Vegas night, and I woke up and had a Vegas morning,” Diddy told me in 2015. “I drank two of the [Aquahydrate] bottles and it was, like, the best tasting water that I&#8217;ve tasted. And it really, honestly helped me recover.”



Diddy became the face of the company alongside Wahlberg shortly thereafter, and the pair invested $20 million in Aquahydrate over the years while billionaire Ron Burkle’s Yucaipa added another $27 million. 



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They aren’t the only ones with lofty ambitions for the brand: last week the Alkaline Water Co., the publicly-traded purveyor of competitor Alkaline88, bought Aquahydrate in an all-stock deal that valued the latter at about $50 million.



For Diddy, who ranks No. 4 on our recently-released list of hip-hop’s top earners and boasts a net worth of $740 million, alkaline water holdings are just a drop in his financial bucket. His Diageo-backed Ciroc vodka—and its myriad flavors, from Red Berry to Summer Watermelon—is responsible for the lion’s share of his wealth. But it’s clear he thinks alkaline water, flavored variants included, could swell his portfolio. So do his new partners.



<figure class="wp-block-image"><img decoding="async" src="https://specials-images.forbesimg.com/imageserve/5d84f41522254b0008e0f81a/960x0.jpg?fit=scale" alt="Diddy"/><figcaption>CRAIG BARRITT AND ALEXANDER TAMARGO/GETTY IMAGES. DESIGN: NICK DESANTIS/FORBES</figcaption></figure>



“You put both these brands under one public company, it makes a ton of sense,” says Aaron Keay, Alkaline’s chairman, of the Aquahydrate deal. “We see synergies on distribution, we see cost-savings on cost of goods. On production, on logistics, on staffing. … And we don&#8217;t see both brands actually then competing for the same target market.”



In the past, flavored water has enriched investors including some of Diddy’s hip-hop world comrades. A little over a decade ago, 50 Cent famously took Vitaminwater equity in lieu of stock as payment for his endorsement—and walked away with some $100 million when Coca-Cola bought its parent company for $4.1 billion in 2007.



A ten-figure valuation for an alkaline water company seems an outlandish target even for the notoriously bombastic Diddy. But Keay notes Alkaline clocked $33 million in revenues over the past fiscal year and had been expecting $48 million in 2020; now, with Aquahydrate on board, he projects closer to $60-$65 million. That compares favorably to Core Water, which was doing some $80 million as of last year before getting acquired.



“For two or three years, Core Water was just another clear water,” says Keay. “Then they added about a half dozen flavors. Sales doubled. They got bought for $500 million. I mean, for us, $500 million would be a big number off of where our market cap is right now.”



Diddy appears to be an ideal ally in achieving that goal. With Ciroc, once a middling vodka in Diageo’s roster, he was able to articulate importance of the brand’s defining trait: it was made from grapes, not grains (never mind that this might technically disqualify it from being considered a vodka). His contention, according to Stephen Rust, Diageo’s president of new business and reserve brands, is that grapes are simply sexier than potatoes.



“One of his favorite things [to say] is, ‘If you can have a vodka that comes from a history of winemaking, why would you do that versus the history of coming from potatoes?’” Rust explained in an interview for my book, 3 Kings: Diddy, Dr. Dre, Jay-Z, And Hip-Hop’s Multibillion-Dollar Rise. “That’s Sean.”



With alkaline water, Diddy has demonstrated a similar knack for sizing up a product and extracting an elemental notion that passes muster with consumers (if not necessarily scientists). If “you’re full of acid,” Diddy once explained to me, you need to “get your body leveled out.”



Vodka and water, of course, are two very different products, and the same tactics won’t necessarily translate from one business to another. Flavored water itself seems to have been over-carbonated of late, as the recent struggles of brands like La Croix show; Alkaline’s shares have slumped this year as well.



Perhaps that’s why Alkaline is looking beyond its flagship bottled water business. Future plans call for a move towards cans in a nod to environmentally-conscious customers, as well as expansion into the nascent CBD-infused beverage space. Keay figures Diddy and Wahlberg, along with fellow celebrity investor Jillian Michaels, should provide a boost across the board.



“Once the FDA makes a ruling about how CBD is going to be distributed through those chains and channels, those guys are going to want trusted brands, brands that they know already have a consumer following,” says Keay. “And that was another big reason why it made sense to bring [Diddy, Wahlberg and Michaels] in, because it&#8217;s only going to help.”



&#8211;Zack O&#8217;Malley Greenburg; Forbes

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Can Diddy’s Ciroc Recipe Work On Alkaline Water?

Sean “Diddy” Combs got his first job at age 12 delivering newspapers, nestling each delivery inside the screen door of every home instead of tossing it in the front yard. These days, he brings that same attention to detail with products like Ciroc vodka, DeLeon tequila and Aquahydrate water, involving himself in every aspect of the product down to the font of each logo.
“I’ve always understood that if I give the customers my best and service them differently, whether music, clothing or vodka, I’ll get a return on my hard work,” he recently <a href="https://www.forbes.com/100-greatest-business-minds/person/sean-combs" target="_blank" rel="noopener">explained</a> to Forbes. Earnings from those brands &#8211; plus proceeds from his Bad Boy Reunion Tour and selling a chunk of his Sean John clothing line for an estimated $70 million &#8211; puts Diddy atop the hip-hop heap once again with total pretax earnings of $130 million in the 12 months to June.
Drake, the world’s most-streamed artist over the past two years takes the No. 2 spot with $94 million. Despite his gaudy recorded music numbers, the Canadian emcee made the bulk of his bucks on the road during his wildly successful Boy Meets World Tour. He also earns millions for shilling Apple, Sprite and Nike. Jay-Z ranks third with earnings of $42 million, and there’s more on the way: this summer he signed a new pact with touring giant Live Nation that will pay him $200 million through the coming decade.
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Hip-hop’s top 20 acts earned a grand total of $619.5 million last year, up 38% from last year’s $448.5 million total. Even without Diddy’s $70 million windfall, overall earnings are up 22.5%, thanks in large part to hip-hop’s dominance in the burgeoning world of streaming: over the first half of 2017, it&#8217;s the most popular genre in terms of consumption, <a href="http://www.billboard.com/articles/columns/hip-hop/7964815/hip-hop-power-list-2017" target="_blank" rel="noopener">accounting</a> for a quarter of all digital spins.
Our list reflects this new reality, particularly though the presence of newcomers like Chance the Rapper (No. 5, $33 million) and Lil Yachty (No. 20, $11 million). Though 24-year-old Chance has never sold a physical album, instead distributing his music freely via streaming services, he smartly uses musical ubiquity to cash in on festival gigs and arena dates, as well as deals with brands like Apple and Kit Kat. The 20-year-old Yachty, meanwhile, rode gaudy streaming numbers and 100 live dates to his debut as a Cash King.
Other big names include Kendrick Lamar (No. 6, $30 million), whose new album Damn. came out in April and soared to the top of the charts; the critics&#8217; darling now grosses more than $1 million per tour stop. On the more pop-oriented end of the spectrum is DJ Khaled (No. 9, $24 million), boosted by six-figure DJ gigs and millions in earnings from deals with Champ Sports, Apple, Mentos and others.
“People probably thought I was crazy to just spend my last penny to invest in myself,” Khaled <a href="https://www.forbes.com/sites/zackomalleygreenburg/2017/09/27/how-dj-khaled-rolls-hip-hops-boldest-star-shows-off-his-major-keys/#2638b34732ee" target="_blank" rel="noopener">tells Forbes</a>. “Now it&#8217;s paying off … one thing I learned is some investments might take years to kick in, and they are kicking in.”
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Other notable names on the list include Cash Money Records founder Bryan “Birdman” Williams (No. 12, $20 million), who gets a boost from having three acts in the Top 20: the aforementioned Drake; Nicki Minaj (No. 16, $16 million), the only female rapper on the list; and Lil Wayne (No. 17, $15.5 million).
To create our list, we add up pretax income from touring, record sales, streaming, publishing, merchandise sales, endorsements and other business ventures. Fees for managers, agents and lawyers are not deducted. Earnings are calculated from June 2016 to June 2017 and based on data from Nielsen SoundScan, Pollstar, Songkick, Bandsintown and the RIAA, as well as interviews with inside sources and a handful of the artists themselves.
Meanwhile, the next generation of hip-hop stars &#8211; younger even than Lil Yachty &#8211; is already on the move. Khaled&#8217;s son, Asahd, turns one this fall but already has 1.5 million Instagram followers, closing in on his dad&#8217;s 7.7 million. Says Khaled: &#8220;My son got a Rolls-Royce already&#8230; a Rolls-Royce car seat.&#8221; &#8211; Written by <a href="https://www.forbes.com/sites/zackomalleygreenburg/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Zack O&#8217;Malley Greenburg</a>, FORBES STAFF

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Can Diddy’s Ciroc Recipe Work On Alkaline Water?

The World’s Highest-Paid Hip-Hop Artists 2017