With war and inflation dominating headlines, consumers are looking for ways to unwind however they can, and New York-based beverage startup Leilo, maker of a line of kava-based relaxation beverages, is hoping to be the solution.
Leilo (pronounced Lay-Low) was founded in 2019 by CEO Sol Broady while an undergrad at Columbia University, and launched in select retail accounts and online in April 2021. After 11 months on the market, the brand is unveiling a reformulated product with enhanced flavor profiles this week at Natural Products Expo West 2022, along with a packaging update that features halal and gluten-free certifications.
Leilo’s origins date to a 2018 trip to Fiji where Broady discovered kava drinks, which is a cultural tradition in the South Pacific for its euphoric effects. However, the ingredient’s polarizing flavor profile – described as extremely earthy and bitter – has held it back from mainstream adoption in the U.S. beverage space, where some brands, like Kalm with Kava and Taki Mai, have built specialty businesses around it. Other emerging brands like Psychedelic Water have also recently embraced the ingredient.
Speaking with BevNET this week, VP of Business Development Brenden Silverman said Leilo now believes it has found a way to bring kava to the market through a proprietary formulation process to remove “all of the negative taste profile.” Using kava root extract as its base, the sparkling drinks feature accessible flavors including Lemon Ginger, Tango Berry, Raspberry Hibiscus and Blackberry Orange, along with a low calorie offering, Leilo Lite. The drinks are available online for $27.99 per 6-pack.
The reformulated products aim to further mute kava’s bitter notes by using organic cane sugar in the core line and monk fruit for Lite. In addition to 750 mg of kava root extract per 12 oz. can, Leilo also contains functional ingredients already familiar to many consumers, including L-theanine and Vitamins B6 and B12.
“We really believe in our product, that’s our strongest suit here,” Silverman said. “We spent years trying to figure out the way to make kava taste good and work with a functional effect in a ready-to-drink version. So that’s what we present to the market – an all natural relaxation that actually works.”
Nailing the flavor experience is particularly important as Leilo’s reformulation expansion arrives at a time when consumers have an ever-expanding number of non-alcoholic options for relaxation, but are finding themselves with an increasing variety of brands and ingredients, featuring ingredients like CBD, ashwagandha, functional mushrooms and melatonin. Aside from CBD’s tenuous legal standing, Silverman said he believes Leilo can sell consumers on kava’s superiority through its immediate physical effects.
“Not only can you actually feel it internally, once you start drinking it and that sense of calm, but there are actual physical effects that you feel with our drinks that you don’t feel and others,” Silverman said, noting a ‘tongue tingling’ sensation that occurs immediately on consumption. As well, many CBD drinks on the market don’t provide an efficacious dose for consumers to get the full effects, he added. “Providing the consumer with something that they can actually physically feel and recognize a difference with is really where we differentiate specifically, in the sense that it actually works.”
Since launching last spring, the company has grown rapidly, bringing on Silverman, a recent Pace University graduate, in January 2021 and former Anheuser-Busch regional marketing director Katherine Dwyer as Chief Revenue Officer last month. The company is also working with food and beverage consultant Rob Leichman to help craft strategy.
Having been primarily funded to date through bootstrapping and friends and family, Leilo is currently finalizing a seed extension round with a target of $2.5 million. Silverman said the company is specifically seeking to raise funds from CPG-focused investors.
In terms of distribution, most of the around 650 stores in which Leilo is currently sold are independent accounts that are serviced directly by the company. Its presence has expanded recently though, launching into Erewhon and expanding into the travel and hospitality channel through JFK and LaGuardia airports and Moynihan Train Hall in New York.
Leilo also works with regional distributors including Gold Coast Beverage in New York and Beauchamp Distributing Company in California, and in February added UNFI as a national distribution partner.
The brand has also partnered with the NFL to have a tailgate presence at games for six teams; the New Orleans Saints, Cleveland Browns, Indianapolis Colts, Arizona Cardinals, Denver Broncos and Detroit Lions. Last month, Leilo was a secondary sponsor at Super Bowl LVI in Los Angeles with an activation station at tailgating events before the game.
Looking ahead, Leilo is now aiming to continue its retail and ecommerce expansion this year, as well as introducing new product formats. In Q2, the company plans to debut its own “night time relaxation” drink, Leilo Luna, in a smaller can size. According to Silverman, the company believes the brand has the ability to play across a number of spaces and use occasions, all tailored around its relaxation north star.
“Just like Red Bull is synonymous with energy, Leilo’s goal is to be synonymous with relaxation throughout different categories,” he said.