Buzz Or Business

If the world of beverages turned on sales numbers alone, it’s likely that little attention would be paid to the relaxation drink category. In fact, many of the incarnations of this functional product are billed as being so potent that the consumption of more than one will put their consumers face down in the onion dip – not exactly the best way to create multiple use occasions. It is also a class of functional products whose purpose is fulfilled, for many consumers, through a myriad of alcoholic products, pharmaceutical remedies, and even illicit solutions.

But sometimes, it takes more than sales to truly build momentum. Particularly when launching a new category, it’s important to get people talking – particularly when the product can make a tacit promise that it will fulfill a much-needed function. That promise certainly being discussed right now with regard to relaxation drinks.

Barely out of the gate, with a sales leader that produced just $5 million in revenue in the past year, relaxation drinks are nevertheless gathering something besides sales: buzz. Increased media and blog coverage, alerts by trend spotters and thought leaders, and an-ever growing mass of companies making and marketing relaxation drinks to the trade and to the general public are all contributing to the growing din.

The buzz is coming from the press: The Los Angeles Times. ABC News. The New York Times Magazine. The Washington Post. Time. These national publications, along with a collection of outlets that stretch from AM radio to major internet sites like Salon, Maxim.com and the Onion, have all taken the measure of relaxation drinks, touting them as either the next great drink sensation or else using them for basic lifestyle stories. In either case, the attention has, in the past year, ratcheted up these products’ exposure in the blogosphere, as well.

The buzz is coming from suppliers and marketers: In the last year, relaxation drinks have moved from a few early companies like Blue Cow, Dreamerz, R & R into a fast-growing category with dozens of new brands. And that has created a “gold rush” to supply dozens of brands with the cans, shot vials, bottles to package them, as well as the nutritional raw materials like valerian root, melatonin, kava-kava, and various and sundry herbs and extracts that can supposedly either induce feelings of mellow relaxation – or just plain send you to bed.

And in the past year, distributors and retailers are hearing – and adding to – the buzz themselves. Of course, they’re coming from a different place – many of them have become attuned to buzz from, perhaps, being stung before, when they didn’t know when to listen for it. For even more than the media wants to make sure it doesn’t miss a story, no distributor or retailer wants to miss out on a potential buzz bonanza. The laments are legendary: the buyer who chased SoBe out of his store, the Coke sales rep. who turned down the Red Bull franchise, the wholesaler who passed up the early chance to buy shares of a struggling glaceau.

Peter Bianchi is hoping those stings still smart.

“This is a brand new category, and everyone is looking for the magic bullet,” says Bianchi, the founder of DRANK, the category leader. “We’re seeing [the energy drink phenomenon] all over again. People are so desperate to try to be the next big thing, they’re all jumping on it.”

And, indeed, Bianchi is sending out roughly a press release a week touting his cross-country prowess as he wins over distribution houses one-by-one. While he has fast established DRANK as the category leader, other brands are attempting to define themselves in a variety of ways –either by offering the pure functionality of sleep inducement, or else, like DRANK, as beverages that attempt to combine a need for relaxation with some of the daring of an illicit association – in some cases, a hip-hop style associated with a mixture of Sprite and codeine-based cough syrup, in others, a riff on the drug marijuana.

Nevertheless, despite the gathering buzz – and the increasing number of distributors willing to give these brands a tryout based upon that buzz – relaxation drinks haven’t yet become a major sales phenomenon, topping out at less than $10 million for the category last year.

“It might be the right trend. But is it the right trend at the wrong time? That’s the hard thing to know,” says trend spotter Jane Buckingham, the founder of TrendEra and the coolhunting bible The Cassandra Report.

Because of her awareness of the increasingly overstressed, fast-paced American way of living – as well as because some of her elite “trendsetter” contacts have pointed the drinks out to her — Buckingham recently touted Relaxation Drinks as a trend to watch this year. But even while she has enjoyed forcing Good Morning America anchors to down drinks like Mary Jane’s Relaxing Soda on-air, she makes it clear that getting people to pay for buzzed-about drinks – and not just know about them — can be another task entirely.

“We’re hitting a time in the economy when it’s hard to get people to pay for something like that,” she said. “The reality is, I don’t know if sales will match what, say, the energy drink phenomenon was.”

Right now, the largest beverage companies – although used to creating their own buzz – nevertheless aren’t yet sold on relaxation beverages – or they are at least waiting to make their move: Coke’s Venturing and Emerging Brands unit, for example, has made it clear that it might be interested in relaxation – or, more likely, a “focus”-oriented product – but in its present form, the big companies have begged off from investment.

That doesn’t bother Bianchi – or an ever-growing cadre of competitors (see this month’s brand news for a description of about 20 of them, with more emerging monthly) – who believe that they are the first wave of the phenomenon. All they need now, they say, are the consumers who are willing to ride it.

Ask Bianchi, and he foresees a marketing campaign based around relaxation drinks being sold during “Happy Hour” at local convenience stores. He’ll also tell you that lots of beer and wine drinkers are relaxation drink consumers who hasn’t yet been turned on to the concept of a non-alcoholic alternative.

“It’s about educating your consumers and letting them know there’s a positive alternative out there,” he says. “Look at energy drinks – why didn’t everyone just stick to drinking coffee? We’re turning them around. We’re not trying to kick the beer industry’s ass, but we’re trying to find a market. With the beer drinker, it’s just turning them around about de-stressing after a long day of work. It’s changing a consumer’s habits.”

His competitors agree. Fellow Texas-based brand Purple Stuff had similar roots in its product style, again looking to the idea of the “Purple Drank” for inspiration for its brand.

“The gaps in the market are definitely due to the age of the category,” says Tim Lucas, Purple Stuff’s director of marketing. “How many years was Red Bull on the market before it captured market share? There’s another way to look at it: look at how young the category is, and how many places it’s in already.”

Just getting it into places might not be enough to keep it there, however. Purple Stuff itself failed to thrive even when it was in the hands of a veteran distributor with a large footprint. Bob Groux, the president of Coast Beverage Company, reported that he carried Purple Stuff for several months, but in the end, it didn’t move.

“We launched it, we placed it in 300 accounts in the first month or so, in the C-Store channel accounts they wanted,” Groux said. “They said, you’ve got to place it near schools – high schoolers are drinking it – and it still didn’t move. We had point of sale up and everything.”

Groux concedes that the concept might be ahead of its time – but that doesn’t help when addressing retailers.

“I’m aware of the buzz, but retailers really aren’t,” Groux said. “It’s not something where a retailer is saying, I’m really waiting for these relaxation drinks – for most of them, it’s really, like ‘What? What is this?’”

But the snowballing nature of hype can mean that a product might have been pulled mere days before the buzz hits. Whereas Groux carried Purple Stuff before his local paper, the LA Times, had discovered the category via Mary Jane’s, a Southern California product, Kyle Ludwig started carrying Drank at his Arkansas-based distribution company in June – and he says his retailers were expecting it.

“A lot of the retailers are aware of the product through trade shows, trade magazines,” says Ludwig. “When we walk in with it, they know what we’re talking about and they’re more receptive.”

So how does a retailer handle a brand or a category when it is receiving a growing amount of attention but the sales aren’t catching up? Give it time, says one major beverage retailer, which has indicated a desire to be a destination for the relaxation drink consumer.

“As more consumers are educated about this segment, more sales will follow,” says Fareed Siddiqui, the soft drink and nutritional drink category manager for 7-Eleven, which has a national program with Drank. “Manufacturers have marketing dollars to educate the consumer.”

And according to Bianchi, that will be the focus of the next year to 18 months – a hard core campaign to help retailers inform consumers of the potential functional benefits of a beverage that can chill them out.

“You know how long it took for Red Bull and Monster to get their message out,” he says. “You’ve got to remember, I’m just one year into a category, and we’re where energy drinks were after five or six years.”

Of course, one of the upsides to the energy drink phenomenon was the powerful lift that consumers received from them. And while having a drink that makes a consumer drowsy has one major application, according Groux, it doesn’t extend to a broad segment of day parts. Still, that might point to potential on the instant-sleep side of the category (think Tylenol P.M. instead of Valium), where products like RelaxZEN and Dreamwater tend to lie.

“I’ll tell you what, there’s a lot of people who just can’t sleep,” Groux says. “I don’t know how many people who want to relax in the middle of the day.”

Meanwhile, though, buzz only lasts so long before it needs sales to put substance behind the sound.

Clayton Distributors, in Clayton County, Ga., was one of the earliest distributors to pick up Drank, about a year ago. Co-owner Paul Redd called the success of energy drinks “a miracle” – and suggested that the buzz around relaxation drinks seemed to him to be something that might contain the same magic dust.

“It was supposed to be the greatest thing since sliced bread – and it took off for a little while, but then it sank,” he said. “I had my doubts about it when they talked about it. In a convenience store, when you’ve got soft drinks and stuff, kids are the primary buyers, and they’re not looking for something to put them to sleep – they’re looking for energy, energy, energy.”

And that mantra – energy, energy, energy – seems to be a tough one for relaxation drinks, even in terms of the pacing of the category’s growth.

Consultant James Tonkin, the founder of Healthy Brand Builders, takes a slightly more measured view of products like Drank and its peers. There may be buzz, there may not, but most buzz beverages eventually either fall off the shelf, turn into major phenomena, or else occupy a third place, one that, by Tonkin’s estimation, isn’t a bad one at all: the niche.

‘’If it’s an inch wide and a mile deep – niche can mean something – if you classify yourself as a niche beverage, own that niche – don’t worry about anything outside of it, or anything adjacent to it. If you have a niche that you can own, by all means go after it. We’re in a time in the beverage business that niche is going to continue to be prevalent. There are going to be places and venues and channels that can survive if consumers feel there’s a market for it.”

Nevertheless, Tonkin says, relaxation drinks are evolving in the opposite way: rather than an inch wide and a mile deep, they’re an inch deep and a mile wide. There’s another word for that: trendy. Which sounds great when you’re the talk of the town – but not so great if the numbers don’t match up.

“A good buyer wants to stay ahead of the curve, but they’re not going to do it just to be cool,” Tonkin says.

After all, while some people hear the buzz of the approaching swarm and think “honey,” others think something much more instinctual: “RUN!” This year, with regard to relaxation drinks, instinct and enterprise might very well fight it out – if they’re still awake to do it.

VIB HOLDINGS, LLC. In 2010, Vacation in a Bottle added chain authorizations including Albertson’s, Fred Myers, QFC, Circle K, AM/PM, 7-Eleven, Haggens, QuikTrip, RaceTrac, Savemart, Nugget Market, Jackson’s, and Gleason’s. In December, Vacation in a Bottle hosted a Mixology Cocktail Contest at on-premise accounts and bars with. Additionally, ViB kicked off New Year’s Day in front of millions of viewers with Hoda and Kathy Lee on NBC’s Today Show.

Funktional Beverages. In 2009 Funktional Beverages unveiled a new look for Superliminal Purple Stuff. The company also secured placement for the brand at every college campus and most high schools in Utah. It also recently signed a distribution deal with McLane.

RelaxCo, Inc. RelaxCo, Inc. announced that it reached an agreement with a financial partner and now intends to expand its distribution in and beyond Southern California. Blue Cow also intends to expand its product line by adding cans and shots.

Frontier Beverage Company. Frontier Beverage Company developed UnWind Ultimate Relaxation and began distribution in February. UnWind contains goji, acai, melatonin, rose hips, valerian root, and Passion Flower.

iChill. iChill announced its relaxation shot in late 2009. The 2 oz. shot blends melatonin, valerian root, rose hips and b-vitamins to ease anxiety and elevate the consumer’s mood. It is available across the U.S. at 7-Eleven locations.

Stevenson Products, LLC. Mini Chill recently reformulated. The new formula contains no ingredients that cause drowsiness or hinder focus. In November, Mini Chill became the first relaxation beverage to have a peer-reviewed medical research paper published confirming the efficacy of its formula.

Ex Drinks, LLC. Ex Chill will be available for purchase online in early 2010 when Ex Drinks launches their online store at www.ExDrinks.com.

Next Generation Beverage. Next Generation Beverage offered preview tastings of Serenity in November and officially launched in January through distribution in Gristedes Supermarkets in New York City as well as other stores in the Tri-State Area. Marketing efforts have included outreach to spas, beauty salons and doctors’ offices, as well as event partnerships.

Vitila Brands, LLC. Tranquila debuted in 2009 and is now sold at over 15,000 retail locations. Following a 30-day test at New York’s JFK airport, Tranquila is now featured at Hudson News airport locations. The brand also recently redesigned its website, launched online advertising and debuted new countertop POS displays.

AriZona Beverages. Since their recent launch, AriZona P.M. Relax FastShots have been sampled at New York Fashion’s Night Out, a Chris Evert tennis tournament in Boca Raton, and the SCOPE Art Show during Art Basel Miami as well as other events. Additionally AriZona P.M. Relax FastShots is slated to appear at gifting suites and film screenings during the Sundance Film Festival.

Innovative Beverage Group Holdings, Inc. In addition to expanding across the U.S. in the past year, Innovative Beverage Group Holdings, Inc. announced that it brought drank to Canada. The product rolled out to Canadian stores in January and appeared on shelves in time for the Winter Olympics.

BeBevCo. BeBevCo recently introduced three coffee flavors for its Koma Unwind relaxation beverage. It also announced an SKU that comes in a recyclable wine bottle.

Dewmar International BMC, Inc. Dewmar International introduced Lean Slow Motion Potion during the fourth quarter of 2009. The beverage is targeted for the hip-hop niche market. It is available in 3 flavors: Purp, Yella and Easta Pink.

MALAVA Beverages. MALAVA Beverages introduced NOVOCAINE in early 2009. The brand is currently in 37 states and 8 countries, covering grocery, 7-11,Circle K and health food stores. NOVOCAINE has been featured on CBS News, Fox News and the Today Show.

Mellow Beverage Co. Since its launch in September, Mellow is now in 3,300+ Southern California retailers.

Peaceful Remedies, LLC. RelaxZen appeared in gift bags for the International Emmy Awards and sponsored the 50th Annual Atlantic City Marathon. The brand also donated a percentage of its profits to provide aid for survivors of the earthquake in Haiti.

PurBlue Beverages, Inc. PurBlu Beverages’ Potion Herbal Remedy Detox shot is available through a growing number of convenience wholesalers including McLane, and has achieved placement at college campuses across the country.