As Recess gets closer to its goal of becoming a platform brand for relaxation and alcohol moderation, it’s also moving further away from CBD.

The New York-based startup was one of the earliest entrants into the CBD space in 2018 with its lineup of low-calorie, hemp extract-and-adaptogen-infused beverages in 12 oz. cans. But while those products continue to develop, their traction has been outpaced by the growth of its non-CBD Mood drinks, a 4-SKU line that promises a similar relaxation and calming benefits and features magnesium as its star ingredient.

With major chain retailers still cautious about CBD — which remains unregulated and federally illegal to include in food and beverage products, in case you forgot — Recess founder Ben Witte said Mood has helped the brand unlock those accounts and will represent more than 50% of all product sales by the end of this year. Against that backdrop, the company is introducing three new SKUs to the line — Raspberry Lemon, Grapefruit Tangerine, and Lime Citrus — while reducing the suggested retail price to $3.49 per 12 oz. can. The new flavors will not be integrated into Mood’s single-use powder sticks, available online via Amazon and the Recess site.

“From the beginning, I’ve never thought of Recess as a CBD company, or even the category as the CBD category,” said Witte.

The idea behind Recess, he says, was always built around multiple products and ingredients that tap into mental wellbeing and relaxation benefits. But as Mood carves out its place within that mix, Witte is aiming to give the line a more distinct identity by phasing out three flavors that also exist within the CBD lineup — Peach Ginger, Blood Orange and Black Cherry — in favor of the new varieties, which aim to capture space at conventional retailers with flavors that echo popular options from existing the zero-calorie sparkling water set. Strawberry Rose, the brand’s overall top-selling SKU across both lines, will remain.

Elsewhere, creating distinctive use occasions for the two lines, which both promise relaxation benefits, has been a more subtle exercise. The updated packaging and reduced pricing will further differentiate the two, but Witte ultimately expects them to sit on the shelf next to each other.

“We think of CBD as having a slightly more kind of relaxing and unwinding effect or occasion, versus Mood which is slightly more uplifting,” he said. “I think there’s a lot of similarities between consumption occasions; one is in the afternoon as a substitute for your coffee as an afternoon reset, to rebalance your afternoon boosts so to speak. In the evening, instead of a glass of wine, I’d say both CBD and Mood, as an alternative to alcohol, have really accelerated.”

In terms of distribution, Mood has hastened Recess’ move into nationwide chain accounts, introducing it for the first time to consumers who may not be aware of the brand’s CBD drinks, or possibly hemp altogether. With national distribution via Breakthru Beverage Group, next month Mood is set to begin rolling out to over 1,000 doors across the Albertsons network (including Safeway, Pavillions, Albertsons and Shaw’s), plus CVS, Sprouts, Giant Eagle, HEB, 7-Eleven and Fresh Thyme Market. Total retail door count is projected to double from 4,000 to 8,000 by the end of 2022, according to the company.

Elsewhere, Mood’s move into more specialized accounts — such as airport retailer OTG and Total Wine & More, plus various coffee shops, hotel mini bars and spas– puts the brand in different contexts that underscore its value. Alcohol moderation has also been a particularly strong touchpoint for Recess, Witte noted, with the product being positioned in certain markets as part of the zero-proof beverage program at bars and restaurants.

To fuel Mood’s expansion, Recess is aiming to ramp up its field marketing activity after taking a step away from in-person activations during the pandemic. Getting back to events and demos will be a major focus in 2023, Witte said, as will scaling its influencer marketing programs and celebrity partnerships and TikTok strategy.

The end result of all that is that Mood is increasingly becoming Recess’ lead product line, an evolution which also brings it into range with a raft of new competitors. Hemp-infused beverage makers like Weller, Cloud Water, Daytrip and CENTR, to name several, have all sought to grow their brands outside of CBD by launching different functional products; Los Angeles-based VYBES, another early CBD pioneer, also has a canned non-hemp extension called Mood that launched recently.

Witte emphasized that CBD will remain a core part of the business moving forward; he pointed to interest from Wegmans, Sprouts and Gopuff in carrying hemp-infused products in certain states as a positive sign. At the same time, the category’s limitations won’t stop Recess from continuing to lean on its “competitive advantage,” he added.

“I’ve always taken kind of a long term view here, which is I still strongly believe it’s a question of when and not if CBD, ultimately gets approved by the FDA as an ingredient in food beverages in supplements, and I actually kind of viewed this, our strategy as somewhat of a competitive advantage,” he said. “It allows us to establish the brand in all retailers, and ultimately I see [the two lines] kind of coexisting with each other. But in the short term, I do see the growth rate of Mood is going to be higher than CBD just because it’s unconstrained from an addressable market standpoint. So it’s obviously a very unique situation.”