“The reason Recess is working is because we’re not marketing the ingredient, we’re building a brand,” says Benjamin Witte, who launched his sparkling water infused with hemp extract and adaptogens about 12 months ago and is now selling it online and in around 3,000 stores in New York, Southern California, and Miami - with Chicago, Nashville and Austin to follow.
“I look at CBD as the caffeine of the 21st century, but they don’t call it the caffeine category, they call it the energy category,” Witte told FoodNavigator-USA. “Red Bull isn’t a caffeine drink, it’s an energy drink, they’re marketing the feeling: it gives you wings.”
How big is the addressable market?
Recess – straplines: not tired, not wired… calm, cool, collected… an antidote to modern times… - is about “taking moments out of your day to reset and rebalance to be your most productive and creative self,” he says, and is tapping into a market opportunity that could be every bit as big as the energy category.
“It’s a universal value proposition just like energy and we're seeing extremely strong velocities in every channel we're in.
"Not everyone needs collagen protein, but every single person needs to take a recess, they are looking for solutions to feel in control and reduce anxiety, whether it’s mindfulness, yoga or medications. They want to feel balanced and calm. It’s not about making you sleepy before bed. I see it as a productivity enhancer, something instead of a mid-afternoon coffee, but there are multiple usage occasions.
“We don’t market the CBD and we don’t really market the adaptogens either,” adds Witte, who has a background in digial advertising and was still operating Recess out of his apartment until January and went from 2-30 staff in 11 months.
“Consumers don’t want to hear 50 facts about hemp. Our marketing, our Instagram, is brand-forward, not ingredient-forward.”
We don’t make any claims
While few would dispute that there appears to be a market for products that are calming, but don’t make you drowsy, how do we know that 10mg of hemp extract (Witte says the 10mg on the label actually refers to the amount of CBD in the product, although it doesn’t say this on pack) actually delivers the said effect?
And do consumers need to ‘feel’ a discernible effect in order to make repeat purchases (at just under $5 a can, Recess is not cheap), or are they are just buying Recess as a general wellness beverage because it delivers on multiple fronts?
“There definitely needs to be more research [see below] on CBD and we don’t make any health claims about our products," says Witte, "but I can tell you from all the feedback we get about our product is that it changes people’s lives.”
Does CBD make you feel 'calm, cool and collected'?
Most of the clinical studies on CBD focus on specific medical conditions such as certain forms of epilepsy in children, or pain management, and typically use significantly larger doses of CBD than are found in products such as Recess.
A frequently-quoted study on CBD and social anxiety (click HERE) whereby subjects ingesting CBD prior to a public speaking test had significantly reduced anxiety, involved just 24 subjects, 12 of which were given 600mg of CBD isolate.
Another oft-cited study on CBD and social anxiety disorder administered doses of 400mg of CBD isolate.
A not-yet published study using CV Sciences’ PlusCBD Oil found that daily consumption of 15 mg of hemp-derived CBD for six weeks led to significant decreases in appetite, along with improvements in sleep quality and duration, and enhancements in ‘quality of life’ scores, so there is some emerging data on smaller doses, but it’s early days, acknowledged Witte.
"We're not making any over the top marketing claims." [editor's note: The side of the Recess can says 'hemp extract: calms the mind, centers the body']
'We’re talking to every major retailer about our products’
So how are retailers feeling about the category?
Larger accounts are waiting for clarity from the FDA over the regulatory status of CBD*, says Witte, whose co-packer in New York is also a strategic partner and investor in the business, which has also raised cash from Patrick Finnegan (founding partner at TGZ Capital) and Torch Capital.
“The game hasn’t even started yet, and it won’t until the FDA clarifies its position, that’s when the Walmarts, Whole Foods, Targets and Krogers of the world get in. Right now I'm spending about 30% of my time navigating regulatory issues, which makes everything harder. We could be significantly larger than we are right now if this was clarified.
“But we’re talking to every national retailer about our products. For accounts we are in, Recess is one of the fastest launches our distributors have seen. It works everywhere. Everyone recognises that this is the next large category and we want to be the default first choice for any distributor and retailer building this category."
'Most people are full of s**t... you have to verify everything'
While the hemp-derived CBD supply chain has become far more sophisticated over the past couple of years, there are still a lot of bad actors in the space, or simply people that don't know what they are doing, he claimed, necessitating a 'trust, but verify' approach to everything, from getting (the right) third party lab to validate everything you see on a certificate of analysis (contaminants, CBD levels, THC levels, pesticide residues, heavy metals), to knowing exactly where your hemp was grown.
"It's still a bit like the Wild West out there. My default assumption is that most people are full of sh*t. You have to verify everything."
*The FDA says it is unlawful to introduce foods or supplements containing added CBD into interstate commerce, but has also said enforcement action is focusing on brands making "egregious" claims, providing some comfort to firms that have already jumped into the space, but failing to provide the clarity larger players need before taking the plunge.
In an April 2 statement, the FDA expressed concerns about companies making “egregious medical claims” about CBD’s alleged curative powers, but also noted that its review of the marketing application for Epidiolex (an approved drug containing isolated CBD) had “identified certain safety risks, including the potential for liver injury.”
It also referred to “unresolved questions regarding the cumulative exposure to CBD if people access it across a broad range of consumer products,” and questioned “whether some threshold level of CBD could be allowed in foods without undermining the drug approval process or diminishing commercial incentives for further clinical study of the relevant drug substance.”