Soft Drinks Get Softer: New Niche Aims to Quench Stress
Saturday, August 15, 2009
Every action must have an equal and opposite reaction, or so the laws of physics say. Push and pull. Proton and electron. Gravity and levity.
And now, Red Bull and Drank.
Drank falls in an emerging category of "relaxation beverages," concocted to soothe the overextended, overbooked and overworked masses that have been hopped up on energy drinks for the past decade. Drank's slogan? "Slow your roll."
"I wasn't the only person speaking 50 miles per hour," said Peter Bianchi, who invented Drank. "It was my personal quest to relax the world."
Drank and similar nonalcoholic beverages are hitting the market just as Americans are being beaten down by the longest recession since World War II, and industry marketers have seized on the drinks' purported calming properties as the antidote for a stressed-out society. Vacation in a Bottle calls itself "the happy relaxation drink." For Superliminal Purple Stuff Pro-Relaxation Formula, the name says it all. And iChill, a relaxation shot, urges users to "unwind from the grind."
"You guys in Washington can affect the relaxation-drink market when you get the economy back on track," said George Smart, founder of the company behind calming beverage Blue Cow.
Relaxation drinks are still only a drop in the bucket of what research firm Mintel estimates is a $50 billion market for nonalcoholic beverages. Soda remains the liquid staple of our diets, commanding about $13.1 billion in sales for 2008. Energy drinks are the fastest-growing sector by far, accounting for about $896 million in sales. But sales are starting to level off after years of triple-digit percentage growth earlier this decade. Consumers have been overwhelmed by the number of new brands -- more than 300 energy drinks appeared on store shelves between 2003 and 2008.
"There is room for so much diversification within the beverage market," said Harry Balzer, an analyst with consumer research firm NPD Group. "The one thing we do like as humans is new things."
That's what prompted Funktional Beverages, based near Houston, to heed this Business 101 lesson: go where they ain't.
The company, founded last year, contemplated launching with an energy drink called Red Stuff, said Tim Lucas, chief marketing officer. But they worried that the beverage would struggle to stand out in a crowded market. Instead, Funktional Beverages created Purple Stuff, packed with herbs and amino acids that supposedly calm the mind and body, and aimed it squarely at the urban 18- to 35-year-old males who once pledged their loyalty to amped-up energy drinks.
To win over this crowd, the company had to make relaxation seem edgy, less yoga studio and more skateboard park, which is exactly where Funktional Beverages handed out free bottles of Purple Stuff. For today's youths, Lucas explained, relaxation means surfing, water-skiing and cage fighting.
"We're about not being nervous as we jump out of a plane," Lucas clarified.
Controversy over the beverage is bubbling, because, along with Drank, the name Purple Stuff resembles slang for the dangerous cocktail of cough syrup and soda referenced in hip-hop music. The companies maintain that the resemblance is unintentional and that, if anything, their products are actually good for you.
Many of the relaxation beverages contain the amino acid L-theanine, which is found in green tea and thought to have calming properties, the companies say. (Drank does not include the ingredient.) Japanese researchers isolated theanine about 60 years ago, and a company called Taiyo Kagaku soon began manufacturing it commercially. Introduced to the United States in dietary supplements about a decade ago, theanine got the green light from the Food and Drug Administration for use in food and beverages in 2006.
A spokeswoman for the American Dietetic Association said that theanine's benefits remain unclear but that it certainly is not harmful. Taiyo Kagaku opened an office in the United States, contracting Connecticut firm NutriScience to market the ingredient, and thus the relaxation drink was born.
Perhaps it is only fitting that those who saw theanine's early potential led tumultuous lives. George Smart said he retired as an executive at food manufacturer Carnation to spend time with his kids in his multimillion-dollar home overlooking the ocean in California -- only to wind up living in a van after a messy divorce.
It was lonely then, and Smart had trouble relaxing. That sparked the idea for a new product, Blue Cow, launched in 2005. Packed with theanine, it is billed as the original relaxation beverage.
"They laughed. 'Nobody will ever buy a relaxation drink,' " Smart said of the initial reaction.
But maybe Blue Cow was just ahead of its time. Sales growth in the energy drink market was peaking in 2005 along with the economy. The young and the restless stayed up all night, fueled by Red Bulls, enjoying the riches that healthy bonuses and rising wages afforded them. One energy drink company sponsored a movie produced by entrepreneur Travis Hollman. Members of the film crew started drinking one or two energy drinks a day to get through long shoots. By the end, Hollman said, they were up to six or seven a day and fights started to break out among the strung-out staff.
"They were going crazy," he recalled. "And then we started talking and said, 'Why hasn't anyone done the opposite?' "
He launched Vacation in a Bottle -- or, simply, ViB -- last year. The company now has 26 employees and is on track to pull in about $8 million in annual sales. Hollman said he is unsure whether the recession has helped or hurt his product. He worries that people have less money to spend on such petty indulgences as relaxation.
On the other hand, he said, "if you can't take a vacation, go buy one at the local grocery store."