One of the newest beverage segments appeals to those who want the opposite effect of energy drinks
People are working harder, worrying more and sleeping less. This has left millions feeling tired, anxious, stressed out and searching for something to help them relax.
Many are finding the answer in a relatively new beverage segment: so-called relaxation drinks.
The Food Cellar, an upscale single-unit operator in the Long Island City neighborhood of New York City, sells plenty of energy drinks to cater to those who want a boost. But it's always wanted to offer something that produced the opposite effect.
“I wanted to bring in something to relieve stress and relax you,” Burak Can, a Food Cellar partner, told SN.
The retailer found what it was looking for in Mini Chill, a drink that contains herbs and aminos to combat stress and anxiety.
“We didn't have anything like it,” said Can, whose 22,000-square-foot store opened two years ago.
Food Cellar started merchandising Mini Chill six months ago at the checkout for $2.99 per 2-ounce bottle. It's remained there since with positive results.
Food Cellar operates similarly to a Whole Foods in that 80% of the offerings are all-natural and organic. The retailer liked the fact that Mini Chill fits in with its business strategy. The herbs and aminos in Mini Chill are all-natural. While it does contain preservatives, Mini Chill plans to launch a 100% all-natural blend in late fall.
“I liked the fact that it has natural ingredients,” said Can.
Plenty of other retailers are also embracing relaxation drinks, so much so that the industry could generate $500 million in sales revenue this year, up from $22 million in 2008, according to research firm IbisWorld, Santa Monica, Calif.
The industry is anticipated to grow at an average annual rate of 26.1% over the next five years.
Relaxation drinks will comprise about 2% of the soft drink industry this year, and grow to 3.5% of industry revenue by 2015, according to IbisWorld.
About 350 different types of products are currently available. Along with Mini Chill, they include Mary Jane Soda; Dream Water; Drank; Vacation in a Bottle, or ViB (pronounced Vibe); Koma Unwind; Blue Cow; Tranquila; Xin; and ExChill.
Relaxation drinks made their debut around 2005, and started experiencing heavy growth last year. More than 100 new items already hit the market so far this year.
Part of the burgeoning vendor interest is a result of big companies getting involved. PepsiCo's Gatorade, for instance, launched Gatorade Tiger Focus in 2008. Though PepsiCo has since discontinued the brand, the launch strongly impacted the segment.
“When the big players start rolling out lines, it creates significant growth,” said IbisWorld beverage analyst Agata Kaczanowska.
Also helping is the fact that the drinks appeal to multiple demographic groups, from twentysomethings to multitasking moms to overworked businesspeople.
“Everyone wants to relax and focus,” Kaczanowska noted.
Still, the segment has also come under scrutiny because certain brands contain melatonin, valerian root and other ingredients that some fear could have negative side effects.
Because of the sleep-inducing ingredients in certain brands, some even carry warning labels, such as not to drive or operate machinery after taking the product.
More and more brands, however, contain L-theanine, an amino acid found in green tea and known for its calming effect.
Food Cellar opted for Mini Chill because it liked the fact that it contained L-theanine and was co-developed by a biochemist, Benjamin Weeks.
Along with L-theanine, Mini Chill is made with a combination of other herbs and aminos, including valerian root, GABA (gamma-aminobutyric acid) to help one relax and 5-HTP (tryptophan) to help improve the quality of sleep.
“Mini Chill helps overwhelmed people calm down,” said owner and founder Steve Panzella, who has a background in finance and personal fitness training.
When asked to comment on controversy surrounding relaxation drinks, Panzella said he specifically avoided melatonin.
“This is not for sleep; it's for relaxation,” he said.
Along with Food Cellar, Mini Chill is sold at A&P and other food stores.
While the initial target was 18- to 24-year-olds, Panzella is finding success among the supermarket channel's female demographic.
“Woman are stressed out with work and kids. This helps them get relief,” he said.
Other brands are also getting supermarket distribution. C&K Market, Brookings, Ore., for instance, had a meeting with the Vacation in a Bottle sales team this month, according to Mike Wion, direct-store-delivery grocery director. The result of that meeting was not known at press time.
ViB can be found in other supermarkets, including Reasor's, Albertsons and Fred Meyer, along with 7-Eleven and other convenience store chains, according to Travis Hollman, founder and chief executive officer.
Hollman launched ViB after seeing a growing backlash against the energy drink market. Like Mini Chill, ViB's main ingredient is L-theanine. It's marketed as a low-sugar, no-caffeine, lightly carbonated beverage that relaxes, while increasing focus and concentration.
Hollman estimates that about half the products on the market contain melatonin. He specifically didn't include melatonin in his recipe because he wanted a beverage that anyone could drink, even kids. Its purpose is to calm you down, but not make you sleepy.
“ViB is very safe because it's made from an amino acid of green tea,” Hollman told SN.
The brand has backing of celebrities like Jessica Simpson, and investors including Cincinnati Bengals' Roy Williams and Green Bay Packer Marco Rivera.
At a time when many of the top prescription medicines are geared to those with anxiety and stress issues, ViB provides a natural way to relax, said Hollman.
“Many people don't want to be on prescription medicine; they want something that naturally calms them down,” he said. “This does that.”
While popular among the 21- to 35-year-old set, it appeals to plenty of other demographic groups, Hollman said.
“There's a growing amount of stress in America in everyone from kids to moms,” he said.
Retailers merchandise ViB near energy drinks, or adjacent to Fuze vitamin-enriched beverages, according to Hollman.
But not all relaxation products are merchandised in the beverage aisle. Such is the case for Dream Water, which, unlike ViB, is marketed as a liquid dietary supplement.
Dream Water is calorie-free and contains GABA to help one relax, melatonin and 5-HTP.
“In the sleep aid set, everything comes in a pill form,” said CEO David Lekach. “This is the first liquid.”
It, therefore, is merchandised in the over-the-counter medicine aisle, near sleep aids, not the beverage section, according to Lekach.
“We are approaching the market in a responsible way,” he said.
Dream Water was drug store chain Duane Reade's “Item of the Week” last week, selling for $2.99 per 2.5-ounce “shot.”
Duane Reade sells the shot size in two flavors: “Lullaby Lemon w/hints of tea” and “Snoozeberry,” a combination of blueberry and pomegranate. Duane Reade also carries an 8-ounce bottle for $2.49 in two flavors: “Lullaby Lemon w/hints of tea” and “I Dream of Kiwi…and Plum.”
Duane Reade introduced Dream Water in December with a one-week promotion offering one free shot with the purchase of any of Duane Reade's private-label DeLish food products. The promotion was titled “This Holiday Season, Have a Good Night's Sleep on Us.”
The retailer merchandises Dream Water at the checkout and/or near sleep aids.
At a time when research shows that 70 million Americans have sleep issues, Dream Water fills a strong consumer need, added Adam Platzner, Dream Water's chief marketing officer.
“Sleep doesn't discriminate,” he said.