Natural product brands and manufacturers from across the country met at the annual Natural Products Expo East trade show held Sept. 12-15 at the Baltimore Convention Center. In the show’s final run in Maryland before it relocates to Philadelphia next year, BevNET’s editorial team saw established brands tackle new innovations and new strategies, including a continuing migration towards can packaging for kombucha, a growing presence for sleep aids, and portfolio consolidation at Novamax.
Sleep Drinks Break Out
Vital Proteins, a maker of functional beverages and powders containing collagen, had an outsized presence at Expo East 2019. The brand exhibited in several booths to promote a robust portfolio expansion which included additions its Performance line, among several other new products. Alongside new Performance pre-workout and recovery drinks, the company launched a Sleep powder, which it said is intended to create an end-of-day addition for the line’s recommended morning-to-night regimen.
The powder, however, is not Vital Protein’s first foray into sleep beverages — a small but emerging trend in the natural products space. At Expo West 2019 in March, the brand debuted a line of 2 oz. collagen shots, which included a blueberry and lavender flavored Sleep SKU. In addition to collagen, the shot contains functional ingredients such as the neurotransmitter GABA, hyaluronic acid, and 1 g of melatonin.
Speaking with BevNET at the show, Vital Proteins VP of innovation sales Katie Clizbe said the sleep shot has swiftly become one of the brand’s top selling products in retail, with a footprint that includes Sprouts and Whole Foods, as well as 1,200 Target locations. The company has also begun expanding into the travel channel, focusing on East Coast airports where the shot is positioned as a grab-and-go product at checkout. Clizbe added that Vital Proteins is planning to expand the sleep shot’s retail footprint through DSD partnerships with HiTouch Distribution in Southern California and Norman Distribution in the Chicago area.
“I think you need to look at the lifestyle and the pace at which everyone is going; there’s the craze of travel, the need to be on at all times and people are working longer hours,” Clizbe said. “Consumers are ready to incorporate more holistic solutions into their life. So [Vital Protein’s sleep products] are a purposeful endcap at the end of the day. You can decompress and get the most bang for your buck in the time your body is in that sleep state.”
Powdered hydration brand Nuun released its own Rest line earlier this year, with the fitness-focused company noting that sleep is a significant part of a healthy lifestyle and exercise regimen. The line, which debuted in the spring, was the company’s latest innovation on display at Expo East.
Last year several new sleep beverage startups launched into the natural channel. SOM Sleep and Snoooze released ready-to-drink formats with different approaches to formulation; SOM uses a proprietary blend of L-Theanine, GABA, and melatonin to induce rest while Snoooze uses an herbal blend including extract of lemon balm, valerian root, passionflower, and linden flower.
Snoooze founder and CEO Rick Ross started the brand as a side project of his core business, Galerie Candy. Investing more than $500,000 of his own money, Ross told BevNET that Snoooze launched in 4 natural channel accounts last year, but has now expanded to more than 140 locations including Rainbow Acres and Lassens. The brand, he said, is on track to expand to more than 1,000 locations next year.
Ross said he believes consumers are taking to sleep drinks as an alternative to supplements and medications that can have lasting side effects, including common ingredients such as melatonin which could potentially impact mood. Beverages, he said, are also a more pleasurable and easy use occasion for consumers, which helps drive trial among consumers wary of pills and other product formats.
SOM, which launched in January 2018, is now available in more than 3,500 locations including Walmart, The Fresh Market and Albertsons/Safeway. Co-founder Abdul Khan told BevNET the drink has also found a loyal audience online — 57% of sales on Amazon are repeat purchases.
“Realistically, sleep drinks are kind of like what Red Bull was in its early days,” Khan said. “For us, it’s about staying focused around sleep and making it easier for people to sleep.”
According to Clizbe, the buzz around sleep drinks could signal a potentially long runway as consumers seek solutions to more hectic lifestyles.
“I think from a trend standpoint you will continue to see consumers focus on rejuvenation and how to slow the pace of this crazy world that we live in,” she said. “This is just another offering that we have that absolutely fits that need. So far it’s exceeded our expectations.”
Kombucha Looking Beyond Natural
As far as beverage categories go, kombucha is a dependable annual source of news and innovation during Natural Products Expo East. However, the incremental changes seen at this year’s show suggest that the category, at least amongst the top brands, is beginning to push the limits of growth within natural grocers.
According to market research group SPINS, dollar sales growth for kombucha has slowed in the natural channel; Though it remains second in terms of dollar share, the channel has been outpaced in terms of growth by MULO (+28% year-over-year through February 2019) and convenience (+55). Sales in natural grew by around 4.6% during that time, and velocity has dropped at a higher rate (14.1%) than in other channels. The fact that several category leaders who skipped Expo East — including GT’s Living Foods and Health-Ade — are exhibiting at the National Association of Convenience Stores (NACS) trade show in Atlanta next month further suggests that kombucha is already thinking beyond natural.
With that in mind, kombucha brands exhibiting at Expo East seemed to have an eye on innovations that could potentially work in other retail channels. After a soft launch last year, Bend, Oregon-based Humm Kombucha is launching its 12 oz can format nationally in five flavors: Blueberry Mint, Strawberry Lemonade, Mango Passionfruit, Coconut Lime, and Hopped Grapefruit. The company also appointed Matt Witherell, a former Red Bull and MillerCoors executive, as its new president last month.
Meanwhile, fellow Pacific Northwestern kombucha brand Brew Dr is also leaning into cans. In July 2018, the Portland, Oregon-born brand began selling 4-packs of 12 oz cans nationwide at Whole Foods, and now its focus appears to be on growing its c-store presence via channel-exclusive 16 oz cans which began rolling out in singles and 4-packs at the beginning of this year. However, the company’s showcase innovation for Expo East was Uplift, a new flavor made with Yerba mate and guayusa that is being positioned as a moderately caffeinated (130 mg per 14 oz bottle) natural energy play.
While Humm and Brew Dr are national brands, cans are an attractive option for smaller brewers as well; names like Rowdy Mermaid and Better Booch have made the jump, and they’ll soon be joined by North Carolina-based Buchi. The brand shared a look at its 8 oz cans, which are currently being tested for shelf-life and are set to launch next year. The shift towards cans wasn’t limited to just non-alcoholic brands, either. Elsewhere, Vermont’s Aqua ViTea showcased After Glow, its new three-SKU line of organic hard kombucha (5% ABV) in 12 oz cans. Wild Tonic is also set to launch the top four flavors in its 5.6% ABV line in 12 oz slim cans starting in January.
Outside of packaging, kombucha innovation at Expo East also took the form of new flavors. Baltimore-based Wild Kombucha showcased its first CBD-infused SKU, a blood orange brew that contains 25 mg of CBD per 12 oz glass bottle. Elsewhere, Tribucha had samples of its new Lemon, Ginger & Berries flavor, which is set to launch next month, and Mother Kombucha shared a taste of its new Goji Grape variety. Finally, Florida-based 221 B.C. Kombucha featured its new Acai Beet flavor, a Publix exclusive, as well as new 32 oz bottles.
Novamex Restructures Beverage Portfolio as Nova Naturals
In a move designed to streamline operations, Novamex has consolidated its beverage portfolio under a new division called Nova Naturals which will group together the Steaz, C2O Coconut Water, Tio Gazpacho, Waiakea, and Mineragua brands.
C20 Brand Manager Paul Heidecker told BevNET at the show that while the brands will continue to operate independently, Novamex sought to reduce operational costs by having the brands combine material resources.
Matt Merson, VP and general manager of drinkable soup brand Tio Gazpacho, said the Nova Naturals Banner has allowed brands to share research and development and distribution resources. The brands also aligned their individual brokers to service all Nova Naturals products.
Nova Naturals will also share marketing resources, including social media campaigns that promote all product lines.
“It’s very reasonable to think that the Steaz consumer is the C2O consumer and is the Tio consumer,” Merson said. “They’re all health and wellness brands, all in the natural space, and there’s a lot of opportunity to cross market to our consumer bases.”
Outside of the launch of Nova Naturals, Tio Gazpacho — which was acquired by Novamex in December — announced a rebrand intended to better communicate the product’s flavor profiles to consumers. While the formulations remain unchanged, the new packaging features vegetable imagery meant to convey a savory taste profile. Each SKU has also been renamed to reduce confusion.
“When most people see something on the shelf called Verde or Rosado, they don’t know what to expect,” Merson said.
For the rebrand, Clasico became Classic Gazpacho, De Sol was renamed Golden Carrot, Verde became Spicy Spinach Avocado, Rosado became Watermelon Cilantro, and Maiz is now Smoky Corn. According to Merson, the first production run for the rebranded products will begin in November and the new products are expected to be on the shelf by January.