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veryone loves a good David and Goliath story,
especially when David wins. In the US market
for functional beverages,which market research
firm Mintel now values at US89.B billion, big multinational companies like Coke and Pepsi have jumped into
the functional game, yet one could argue that the category started with a few enterprising Davids-Gatorade
and Red Bull could be called the first truly functional
liquids. With the success of the functional category, the
big soft drink companies are now active players in the
enhanced water market and Coke continues to buy once upstart innovators like glac6au vitaminwater andFuze. With consumers now demanding beverages with real, specific iunctional
health benefits and competition increasing, it can be challeng,ing for the Davids, which often have fewer resources and
smaller budgets, to stay in the game. How can smaller beverage companies continue to stay innovative and formulate a
functional beverage that slays consumers' growing thirst for
something more than just satisfyinS recommended daily doses
of vitamins? Betserape World posed the question to a panel of
industry insiders, some of them Davids in their own right.
Go With What You Know: Function Drinks founder Alex
Hughes got his formal education in medicine, and he continues to do rounds at the UCLA Medical Center. Function's line
of elixirs-including
Night Life, a new offering designed to profrom his curiosity about how to
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"We [Function Drinks] are constantly evaluating the mainstream scientific literature," Hu$hes says.
The Function Drinks line started with Urban Detox, which
contains N-acetyl-L-cysteine (NAC) and prickly pear fruit
extract to rid lun!,s and sinuses of the harmful effects of airborne pollution, and the line has been expanded to now
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Ardea Beverage Co. founder Joe
Heron also levera!,ed experience in healthcare to create his
functional beverage line, Nutrisoda. Prior to startin$ Ardea, Heron
held an executive position with Novartis Medical Nutrition.
"He really knew his nutrients and vitamins and minerals
and herbs and amino acids," says Maile Buker, vice president
of marketing and strate!,y for Ardea. "So when he started mixin!, this stuff up, literally in his basement, he was really on to
something."
Nutrisoda has established itself in the functional market as a
brand willing to experiment with new and innovative in$redients to offer meaningful health benefits. For instance, Calm
was formulated with Essentra, an ingredient derived from
Ashwagandha root extract, an Indian herb regarded for thousands of years as a natural tonic that produces a calminS
effect. Nutrisoda Renew was the first carbonated drink to offer
a full gram of dietary fiber. Pepsi Americas, Inc. acquired
Ardea back in2006.
Go Fast Energy Drink founder Troy Widgery also leaned on
expertise from outside the bevera!,e industry to launch his
beverage company. Before starting Go Fast, he competed as a
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heatth (Vision),digestiveheatth
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"I never thought of
anythin$ other than
doing an energy
drink," says Widgery,
who worked with a
team of specialists to
create the perf'ect
blend of ingredients,
taste and pertormance.
MakeSurethe DrinkWorks:For
a drink to succeed, it has to taste $ood-obviously. But when
formulating a functional bevera$e, taste is not the first consideration. The first thing that has to be talked about is who's
your target market and what sort of tar$et functionality are
you looking for, according to Chet Rao, food scientist turned
sales and marketing manager for I{ormel Specialty Products,
which markets Eterna omega-3 fish oils, a patented form of
omega-3 that's tasteless and odorless for inclusion in food
and beverages.
"If your ultimate consumer is drinkin$ it, and it's not
doing anything for them, what $ood is it?" Rao asks. "It's
kind of going in the opposite way of traditionally how thin$s
are done, because when you're makin$ a nutriceutical claill":',
that's the focal point. You're then taking all these in$redients
and developing a product around it."
So, start with functionality. Task your product developwhat amountsment team to identify which nutrients-at
actually deliver the functionality. Then it's a process of trial
and error with the nutrients to develop a taste profile,
appearance and mouth feel that sustain a meanin$ful level of
the functionality. In the fall, Ardea will launch a product
focused on eye health called Vision. The core functionality
of the product will come from the plant extract lutein.
"A lot of research shows this certain level per day has an
association with reduced eye health issues," says Kate Ratliff
of the product development and in$redient supply company,
Pro-Liquitech International, which works with Ardea on its
product development. "So we make sure we have a significant amount versus just a splash of lutein. It's actually an
amount that carl add up over the day and $ive you the
health benefits that you're looking for."
Echoes Go Fast's Widgery, "A lot of bevera$es are developed where companies just pixie dust. Every in$redient we
put in for a reason, and a quantity that makes an impact."
Marry Development and Mark€tlng: Ratliff says her company's collaboration with Ardea $oes beyond what one mi$ht
consider typical for an ingredient supplier.
"We don't work in isolation," she says. "Ardea really leans
on us to be their fuIl R&D partner, and in that we serve as
sort of a department in their company ftom a mentality
standpoint."
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understanding of clinically proven science, physiology and
health and wellness evolves, so will our products," Hu$hes says.
As an example, he points to recent updates to Function's
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"The marketing person will know what
they can market, and product development
product sourcing costs.
Never Stop lnnovating: trvery bottle in the Function Drinks
line includes a small icon: created by physicians. Hughes says
he constantly reads medical journals not only to keep up with
his specialty, but also to guide innovation.
"We make a promise to our customers that as our prof'essional
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Hormel's Rao suE*lests such collaboration
between product development and marketing can be vital for smaller companies trying
will know what they can effectively make or not," he says. Rao
also su6[i,estssmaller companies should consider opportunities
to co-brand with ingredient suppliers. "The advantage for me
is I'm getting more visibility for my brand," Rao says. "The
advantage for the small company is the abilitl' to levera$e our
scientific expertise." Not to mention the potential to lower
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"We worked in the lab for a year
to perfect a highly functional yet
improved EGCG (epigallocatechin $allate) tincture and g1'mnema extract," Hu$hes says. "It was a lot of hard work, but our
customers appreciate it."
Go Fast's Widgery says his team also continues to tinker. For
example, two years after launchin!, Go Fast, they added ribose
to the formula to help sustain the ener$y boost. A year later,
they introduced Go Fast Light, which has 100 fewer calories.
"We're never satisfied with sayin$, 'That's $ood enou$h,"'
Widgery says. "Ninety-nine percent of the people don't have
the persistence." lBwl
flavorntan.com (Pro-Liquitech)
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