With a new round of funding in hand, the company behind brain-boosting beverage Nawgan has launched a new brand of functional drinks intended broaden its reach to a wider range of consumers.
Launched today, ON Powered Refreshment is a line of energy/refreshment beverages that are formulated with a blend of tea leaf-sourced caffeine and ornithine, an amino acid said to have several health benefits including improving athletic performance and reducing ammonia in the body. Widely consumed and sold in Japan, often as a supplement, ornithine works “synergistically with caffeine to reduce fatigue and significantly increases stamina and concentration over caffeine alone,” according the company, which is now known as ON Beverages.
Amid the development of ON Powered Refreshment, Japanese conglomerate Kirin Holdings, which invested $3 million in the company in August 2011, recently added to its investment. Although ON Beverages CEO Dan Holland declined to give an exact figure for the new round of funding, he told BevNET that “it’s a substantial amount.”
Kirin’s initial investment was intended to build a sales and marketing staff and expand Nawgan’s distribution footprint beyond its home market of St. Louis, Mo., according to company founder Rob Paul. Yet while the brand has since gained some traction in U.S. colleges and universities and achieved some penetration on the West Coast, Blick said that the primary market for Nawgan remains St. Louis.
Nevertheless, Kirin, which, via its subsidiary Kirin Kyowa Hakko, is major supplier of ornithine as well as Cognizin, the key functional ingredient in Nawgan, believes in the continued development of Nawgan and potential for ON as a global brand, Holland said.
“From [company founder] Rob Paul’s perspective as well as our investor and board, we wanted to have a more broadly appealing brand, although we continue to work Nawgan in certain channels and with certain consumers,” said Corey Blick, Vice President of Marketing, ON Beverages. “Secondly, I think the nutritional technology that we had access to, and some of the research there sort of prompted that ‘Hey, we gotta go do this.’”
ON Beverages gained self-affirmed GRAS (Generally Recognized as Safe) certification for ornithine in October, allowing the company to use the ingredient in the new products. Sweetened with a blend of cane sugar, erythritol and stevia, ON Powered Refreshment drinks are made with a patent-pending formulation and come in five flavors: Blueberry Lemonade, Tropical Citrus, Dragonfruit Tangerine, Peach Mango and Raspberry Limeade. The beverages, which come with a suggested retail price of $1.99-2.49, are packaged in 16 oz. PET bottles and contain 30 calorie per 8 oz. serving.
“We wanted to keep the product naturally sweetened and low-calorie,” Blick said. “Those were the baselines of what we wanted to achieve. And then we also wanted to deliver a really good taste and the appropriate sweetness level that we think goes beyond an enhanced water.”
While the company will utilize web-based and social media promotion to educating consumers about ornithine, Blick said that the ingredient will not be the primary focus of brand marketing efforts.
“As a brand, we’re not leading with ornithine,” Blick said. “It’s certainly in there as part of the formulation. But I don’t think we are, at least from a consumer perspective, saying that ‘Hey, this product has ornithine in it. Let me tell you about that, and then tell you about the rest of the product.’”
Instead, marketing for ON Beverages will be centered on overall benefits of the drinks, including enhancing focus, and boosting endurance, and would be targeted to reach active, health-minded consumers, Blick said. A significant part of that strategy is based on the package for ON Powered Refreshment, which features the well-recognized symbol of a computer “on” button in its logo, which Blick views as a critical point of differentiation from competing products.
“We really invested the time and the research on the package, and it’s not an inexpensive product to make,” Blick said. “We could’ve come out in a can like everybody else, and then onus is on you to spend big dollars on media. We think the package being unique and pretty striking does a lot of the work for us.”
Launched on the West Coast, ON is carried by natural distributors UNFI and Nature’s Best and is shipping direct to some grocery retailers. Holland said that the company would continue to build a hybrid distribution model for ON in which it will utilize DSD “as it calls for.” Holland, a longtime beverage veteran and the former CEO of Activate Drinks, dryly noted that “a lot of distributors have done a good job transferring their costs to the supplier.”
Asked if ON will be positioned and sold alongside Nawgan, Blick indicated that there will be certain circumstances in which the company sells both brands, retail channel or geography. However, he said that “a lot of the cases, at least for the next year or two, you would see them in separate channels and geographies.”