PepsiCo-backed German start-up brand air up is seeking the sweet smell of success as it launches its “scent-flavored hydration system” products online in the U.S. this summer.
Founded in 2019, air up produces a line of refillable water bottles and scented “flavor” pods that enhance plain water by tricking the brain into perceiving taste through smells – a concept the company refers to as “retronasal smell.”
Air up’s bottles are BPA-free and starter sets, which include one flavor pack, sell for $39.99. Flavor pods are available in 10 varieties – Apple, Basil-Lemon, Blueberry, Cherry, Cucumber, Lemon, Mango-Passion Fruit, Orangeade, Peach and Watermelon – and retail for $7.99 per 3-pack. According to the company, flavor pods last for around one gallon of water – typically three to four days of use.
The company has raised €60 million (around $61.2 million) to date with investors such as PepsiCo, actor and venture capitalist Ashton Kutcher and music manager Guy Oseary, as well as institutional firms Five Seasons Ventures, Ippen Media, Oyster Bay Venture Capital and Freigeist Capital.
Responding to questions via email, air up co-founder and Chief Evangelist Lena Jüngst said the company is focused on building its ecommerce business in the U.S. with an emphasis on direct-to-consumer and did not offer a timeline for a potential retail launch.
“Our priority is to establish the brand through word-of-mouth and grow our profile in the States to help reinvent the way Americans consume,” she wrote. “Having a DTC first approach as our primary sales channel has many advantages and, most importantly, allows us to connect with our consumers on an ongoing basis. We love having a direct line to our community and will continue to evaluate the best ways to sell and distribute air up as we grow and expand in the U.S.”
A former design student, Jüngst co-founded air up with business partner Tim Jäger while studying at the University of Schwäbisch Gmünd in Germany as part of a bachelor’s thesis project. The brand then brought on additional co-founders in Fabian Schlang, Jannis Koppitz and Simon Nüesch. In an interview this month with Business Leader, Jüngst said the company now has around 240 employees and operates on a “remote-first” structure.
Though air up claims to be the first drinking system crafted around the retronasal concept, it is not the only beverage product to play to consumers’ senses. Ready-to-drink brand SZENT launched in 2018 with a line of unflavored bottled waters that featured scented rings around the bottle cap in order to produce a similar retronasal effect. SZENT raised $2.2 million in seed funding in 2019. An air up spokesman noted that SZENT utilizes orthonasal olfaction which occurs during sniffing, versus retronasal which occurs while eating and drinking.
Jüngst did not mention SZENT when asked about past innovations in the market, but said air up has “proven product market buy-in” through net growth of over 300% between 2020 and 2021. The brand is now sold online in 10 countries – including Germany, Austria, France, Belgium, Italy, the Netherlands, Sweden, Switzerland and the U.K. – and has over 2 million customers worldwide.
“Our mission is to inspire change with revolutionary and exciting scent-flavored hydration, which takes into account both the health and environmental aspects,” Jüngst wrote. “It’s no secret that hydration is essential for supporting our overall health and well-being. Today, ~75% of Americans remain chronically dehydrated. In that sense, I think providing an option like air up is long overdue.”
Air up also brings another competitor to the accessory-based beverage system space, which has seen several large investments over the past several years. In August 2021, Florida-based Cirkul raised $30 million for its brand of proprietary water bottles that add concentrated flavor packs into water as the consumer sips. “Microdrink” maker Waterdrop, which produces a variety of refillable bottles including tech-enabled Smart Caps compatible with its flavor packs, announced it had raised $70 million in February.
But other beverage system plays, including PepsiCo’s own Drinkfinity, have struggled in the U.S. Drinkfinity, which offered a customizable experience via a proprietary bottle and reloadable liquid flavor pods – launched in the U.S. in 2018 after a pilot run in Brazil. The brand was relaunched a year later with a new bottle, but according to online reports it appeared to be discontinued in 2020. However, Drinkfinity bottles are still available for sale online exclusively through Bed, Bath & Beyond’s website.
According to Jüngst, PepsiCo is playing a significant role in air up’s international expansion, noting the conglomerate was “intrigued by the unique design and engineering” of the product.
“First and foremost, PepsiCo is an investor who believes in our products and supports our purpose, vision, and mission,” she said. “We have a positive, mutually beneficial relationship with PepsiCo characterized by shared trust, as is the case in all of our investor relationships. The U.S. is a big step for us as a company that is still relatively young. Accordingly, we also enjoy the opportunity to exchange ideas and benefit from one another’s experience in the market.”
Looking ahead, Jüngst said the company has a strong innovation pipeline and that the hydration system “is just the beginning” of its planned product development.
“Our mission is to inspire change with revolutionary and exciting scent-flavored hydration. air up makes drinking plain water the most exciting choice possible—by adding flavor through scent alone,” she said. “In terms of differentiation, we didn’t just launch another bottle or flavored water product or even a customizable beverage; we introduced an entirely new category.”