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Züm XR farms out beverage brand, expands R&D for extended release caffeine ingredients

By Hank Schultz

14-Nov-2016
Last updated on 14-Nov-2016 at 17:08 GMT2016-11-14T17:08:08Z

Züm XR has expanded its extended-release, encapsulation R&D capability fourfold, according to the company.  Züm XR photo.
Züm XR has expanded its extended-release, encapsulation R&D capability fourfold, according to the company. Züm XR photo.

High demand for caffeine fortification in energy beverages has driven an expansion at Denver-based Züm XR, which has developed an encapsulation technology.

The company is based on a technology that founder Robert Niichel brought over from a previous career in the pharmaceutical industry.  It’s a beadlet encapsulate caffeine that is released over a period of hours rather than the steep delivery curve typical of other caffeinated beverages such as energy beverages or coffee. The delivery curve rises slowly and peaks at a relatively low level, Niichel said, so the peak caffeine level in the blood is much lower than with the same amount of caffeine delivered all at once. 

But that posed a problem, too, Niichel said.  More so than many other categories of foods and supplements, consumers have been conditioned to expect an instant, recognizable effect from an energy product.

“When you talk to marketers in this space, you find that energy products are about the experience.  The consumers want that jolt, they want to interact with the packaging.  You’ve got to deliver that,” Niichel said.

Since introduction of the technology back in 2013, the company has grown strongly based on both its expanding IP portfolio and demand within the beverage industry.  The company obtained three additional US patents on the technology in early October.

Emblematic of that demand is the new deal Züm has signed with Avitae, a marketer of caffeinated waters, which has taken over Züm’s original, proof-of-concept beverage line.  The line, now called 'ZÜM XR by Avitae,' was unveiled at the National Association of Convenience Stores (NACS) Show, Oct. 18-21, in Atlanta. 

Innovation in caffeine

“We’re excited to bring true innovation to the energy drink category and provide consumers with a longer, sustained energy boost eliminating the crash associated with most energy drinks,” said Norman Snyder, president and chief executive officer of Avitae. 

“If we step back to where we started, we wanted to bring this technology from the pharmaceutical space into the consumer space. I never wanted to found a beverage company. The significance of this deal is that we have now found a home for our original product, and it’s with someone who is very powerful in the industry.  Norm Snyder is the former COO of SoBe Beverage,” Niichel said.

“It’s a another revenue stream, and helps lessen the risk,” he said.

Züm has signed a distribution deal with high-profile branded ingredient supplier PLT Health to represent the company’s ingredient technology, which Niichel said now extends to encapsulated vitamins and amino acids.

“We have also launched two different types of caffeine that can go into stick packs, or into the tub products,” Niichel said.

To accommodate that growth the company moved from its original space in a suburban light industrial park to larger quarters in south Denver. 

“Our new facility is about four times as large as the facility in Centennial,” Niichel said. “We have expanded our research and development capability significantly and we’ve added state-of-the-art encapsulation machinery."

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