Slow And Steady

Relaxation drinks are trying to capture a piece of the market, but not all c-stores are quick to add them

It is a basic tenet of life: everything has a counterpart. For every action, there is an equal and opposite reaction. What comes up must come down. And so, continuing with that theory, relaxation drinks are the natural follow-up to energy drinks. But when it comes to consumer demand, can relaxation drinks pack the same punch as the alternative beverage leader?

Harry Balzer, chief industry analyst and vice president of The NPD Group, believes there could be a place for relaxation drinks in the national marketplace, but he does not see a lot of Americans consuming them at this point. “Energy drinks are a small part of the beverage story and relaxation drinks are even smaller,” he explained. “But both are part of a much bigger story.”

Balzer, author of The NPD Group's annual report “Eating Patterns in America,” said even though carbonated soft drinks are still king, consumers are looking for other options. “For now, relaxation drinks are not part of the national drinking habit, but the country is looking for an alternative to carbonated soft drinks so it is not surprising you are seeing energy drinks and relaxation drinks right now.”

He may be on to something. Bebida Beverage Co. (BeBevCo) has been making great strides this year getting its product Koma Unwind into the retail distribution channel. In mid-July, it inked a deal with Ultimart convenience stores to put the relaxation drink in its coolers across Wisconsin. Just days earlier, BeBevCo's signed a distribution agreement with Boomtown Distributing of Reno, Nev., to deliver Koma Unwind to convenience stores, travel centers and service centers throughout Nevada.

Customers at Dennis Lane's 7-Eleven store in Boston continually express interest in relaxation drinks. Lane, who is president of the New England 7-Eleven Owners Association and past chairman of the National Coalition of Associations of 7-Eleven Franchisees, added the relaxation shot iChill to his product lineup more than two years ago. “I was intrigued with the concept,” he said. “Selling products in shot-sized bottles has been successful for energy drinks.”

Relaxation drinks have not just piqued his interest; his customers express the same wonderment, he said. “I am very surprised how many new customers are intrigued by relaxation drinks,” Lane said, adding that they always pick them up at the counter and ask if they work.

After successfully adding iChill to the mix, Lane began stocking another relaxation drink, Dream Water. “I liked the concept of having an almost anti-energy drink. Now you have a product at the end of the day you can use to relax,” he explained.

“I also liked that it is a new category,” Lane added. “In the convenience store channel, one way of reinventing ourselves and remaining relevant to our customers is by trying new things.”

But as with any new product or category, Lane did his homework before bringing relaxation drinks into his store, which he has owned for 37 years. He met with the senior management team of iChill and Dream Water when the products were introduced, he said, noting that c-store operators have a responsibility to educate their staff so they can educate the customers.

Lane also believes relaxation drinks, though seemingly off to a slow start, should not be ignored. “I think relaxation drinks are here to stay,” he said. “The category continues to grow, and I recommend convenience stores get into the business.”

Not all convenience store operators, though, are getting on board just yet. Several retailers, such as Cenex Zip Trip and United Refining Co. of Pennsylvania, told Convenience Store News that there has not been much buzz around relaxation drinks from their customers or vendors.

However, Kevin Hall, manager-store merchandise for United Refining, which owns Kwik Fill/ Red Apple and Country Fair stores, said the company may revisit its decision not to carry relaxation drinks in 2012.

Despite the seemingly slow adoption in the c-store channel, manufacturers of relaxation drinks are going full speed ahead. Leading the pack is “drank,” a product of Innovative Beverage Group and the creation of its CEO Peter Bianchi, which landed in store coolers in 2007. “Prior to this, nothing like it existed on the market,” Bianchi said. “That was during the big surge in energy drinks when their popularity was growing. I thought what goes up must come down.”

Bianchi began formulating his idea for a relaxation drink after watching consumers stop by convenience stores in Texas after work and buy single bottles of beer. “I saw that in Texas convenience stores, a good 30 to 35 percent of their floor plan had tubs of ice and single-serve beers,” he said. “It was like people were going to convenience stores for happy hour and I thought there had to be a better way for people to check in rather than check out at the end of the day.”

As opposed to energy drinks that aim to help consumers function with stimulants, relaxation drinks aim to do the same, minus the stimulants. For example, drank — which took three years to develop — contains melatonin, valerian root, rose hips and lavender. “I created a beverage thinking that America would embrace it when they understood what it was, similar to how they accepted energy drinks,” Bianchi said. “I balanced the product as a beverage that can take the edge off and allow you to still function.”

And some consumers are embracing them. According to Bianchi, there are now more than 350 products in the relaxation category. “Relaxation drinks are designed to de-stress you throughout the day. There is really no product out in the marketplace that really helps you deal with your day.”

Even with increasing competition, drank counts itself among the leaders in the category. “Our product is doing very well,” Bianchi said. “We have moved 18 million units in four years and we are still growing. We have 70 percent of the market share.”

Another relaxation drink found in c-store cold vaults is Simmer Relaxation Drink, which BYB Brands introduced last November. “Simmer continues to grow and reactions are enthusiastic,” said Rebecka Nelli, director of brand development at BYB Brands. “The category is fitting an important need that many of us have, and Simmer is positioned to appeal to that broad audience. Sales reflect that as consumers discover Simmer.”

Currently Simmer is available in convenience stores in many areas of the Carolinas and the company is looking for additional opportunities. “Our goal is controlled growth so that we can best help our retail partners position themselves to get the most out of this growth category,” she said.

Nelli added that convenience stores and relaxation drinks are a perfect fit. “Many relaxation consumers are also energy drinkers, a significant shopper at convenience stores,” she explained. “Simmer offers a quick way to wind down during a quick stop on the way home from a busy day or an evening out. And shoppers are accustomed to finding new and trendy beverages at their favorite convenience store.”

Simmer also contains valerian root as a key ingredient, as well as L-Theanine (an amino acid found in green tea leaves). “In today's world, most of us feel over-busy, overworked, and over-connected,” she said. “Many drink energy drinks to keep up. Even when we take the opportunity to relax, we may need help to unwind.”

That may be the driving force behind the segment's staying power. According to Nelli, research indicates the relaxation category totals more than $5 million annually and Zenith research predicts it will grow more than 30 percent this year. “Certainly that growth trajectory mimics other new product introductions. While the energy drink segment has hit its peak, the relaxation category appears to be the next opportunity,” she said.

Bianchi is of a similar mindset, but is unsure if relaxation drinks can catch up with energy drinks. “This category will never be as big as energy drinks. Like coffee, people consume several energy drinks a day to sustain energy. Our goal is to have a consumer drink one, maximum two, a day,” he said.

“As total saturation goes, if we do 50 percent of what energy drinks do and do it within 12 years, than our category will be successful,” he added.