Despite being one of the established veterans of the functional beverage set, Neuro is still looking for ways to expand its product range. Along with introducing powdered products, the California-based company is this month introducing its eighth SKU, Probucha, a shelf-stable probiotic drink intended to promote gut health.
According to Neuro founder and CEO Diana Jenkins, the drink targets consumers who want the digestive benefits of kombucha, but who — like herself — dislike the acidic, vinegary taste of the fermented tea. Available in a single Meyer Lemon Ginger flavor, Probucha contains apple cider vinegar and tea, but is not fermented, and includes 15 calories and 4 grams of sugar per 12 oz. bottle.
The drink launched this month in Walmart and online on Amazon with a suggested retail price of $1.98 per unit. Neuro general manager Erik Toops said the company will aim to take advantage of Probucha’s shelf stability to scale in the grocery, mass, drug and convenience channels. While Toops noted that the COVID-19 pandemic may make it more difficult to add new accounts during the year, the Walmart launch is not affected as the drink is already in distribution and resets have been completed. The company will focus on social media and digital marketing to support the launch.
Though Neuro’s current products are primarily aimed at addressing cognitive need states, Jenkins emphasized the connection between physical and mental health — something all of the brand’s products focus on — and said digestion fits into its goal of giving consumers an overall wellness boost. While Probucha will not technically place Neuro in the kombucha category — a trending sector expected to reach $7 billion by 2027 — she said it does present an opportunity to bring new consumers to the brand who “can’t or won’t drink kombucha.”
“We’re not trying to compete directly with any kombucha brand,” Toops said. “For people who are kombucha drinkers, well Neuro is not a kombucha so they’re going to stick with a kombucha. This is for the people who want the functional benefits but can’t stomach the taste.”
The new SKU debuts during a strong growth period for Neuro, Toops said, which has benefited from increased consumer demand for functional beverages amid the emergence of ingredient trends such as nootropics, L-theanine, CBD and sleep drinks — all of which address need states that Neuro has serviced for years.
Probucha is the eighth addition to Neuro’s portfolio, which also includes Sleep, Immune, Sonic (energy), Bliss (stress relief), Aqua (hydration), Trim (appetite control), and Gasm (sexual performance) varieties.
When Neuro launched in 2009, Jenkins said it could sometimes take “hours” to explain to people her vision for a portfolio brand servicing multiple niche functions with an emphasis on mental clarity. Even after her lengthy pitches, she would still be met with “blank stares” from buyers who wholly associated functionality with energy. At the time, the company promoted the brand as an around-the-clock regimine where consumers could drink each SKU at different times of the day.
Today, however, “the three hour conversation has been reduced to a minute,” she said, as the market for functional drinks has grown significantly and both consumers and buyers are more educated on ingredients and use occasions.
“I honestly want to connect it to the legalization of medical cannabis,” Jenkins said, of the demand for functional drinks. “People take medical cannabis for sleeping or for relaxation, and while we are not in that industry whatsoever, I think it opened people’s minds to the alternatives [for relaxation]. I think the language of the culture has changed.”
Over the past decade, Neuro has refined its strategy around the top-selling SKUs, Toops said; however, Toops suggested that Neuro’s diversity gives it an advantage over competitors that only focus on a single functional benefit.
The brand’s best seller, Sleep, has an 86% repeat rate among consumers, Jenkins said, but has only recently seen emerging competition in the sleep drink category through startups such as SOM Sleep and Snoooze. Likewise the growth of CBD has created a demand for relaxation beverages, a function that Neuro fills with its Bliss product (which does not contain cannabinoids but instead uses chamomile, L-theanine and Alpha-GPC).
Although Toops argued Neuro is unique in offering products for multiple functional need states, others have begun to take a similar approach. LifeAID — which makes a line of drinks for niche functionalities, including some that Neuro offers, such as immunity, relaxation and mental clarity — raised $7.7 million last year to support a nationwide retail expansion. However, Neuro’s 70,000 store footprint is still much larger. According to Jenkins, Neuro has continued to thrive by establishing itself as a trusted brand that offers a “premium product at a reasonable price.”
As the company has grown, it has also faced questions over its messaging and claims, including a lawsuit with the City of Santa Monica, California that was settled in 2016. As part of the settlement, Neuro was required to redefine some SKUs as dietary supplements and conduct additional scientific research to back up its functional claims. The company did not admit wrongdoing and Jenkins called the case a “labeling dispute.”
Through its distribution partnership with Keurig Dr Pepper (KDP) — a relationship that has carried over from the pre-merger Dr Pepper Snapple Group allied brands portfolio — Neuro is mostly available in the mass, grocery, convenience and drug channels. Jenkins said she now sees a long runway for growth in on-premise accounts.
Toops said Neuro has tested in airports, but faced some difficulties with brokers in the channel. Jenkins said she hopes, once the novel coronavirus pandemic passes, to make inroads in the hospitality channel with a goal of placing Neuro’s Sleep in hotel rooms.
“It’s always been my dream to be a part of turndown service at every hotel in the world,” Jenkins said. “To be next to those chocolates that they place by the bed.”
The company has also increased its focus on sustainability, Jenkins said. Last year, the brand redesigned its packaging, moving to 100% rPET bottles. The change has forced the company to replace its distinctive “hat” cap, she said, but it was a necessary “sacrifice” in order to meet environmental goals.
Neuro is now planning to launch powdered versions of its portfolio, starting with the Sleep and Immune varieties with added elderberry extract, Jenkins said. The company had initially targeted a spring roll out for the powdered line — which will feature multipacks of single serve sticks — but the line has been delayed due to the ongoing pandemic.
“We already did a sample round [in December] where we sent it to our best customers,” Jenkins said. “We had 100% greenlight; nobody has come back to us and didn’t like it.”