Brain health: The next big trend in functional beverages?
"I think the future is from the neck up. To be dramatic, I think it’s the next step in human evolution, and we’re at the forefront of that," Miller told FoodNavigator-USA.
"I don’t think our brains have caught up from an evolutionary standpoint to keep up [with advances in technology], which is why you have guys like Elon Musk worried about brain function, and why he’s made huge investments in it."
Koios' beginnings, finding its audience
Before founder and CEO Chris Miller started Koios in 2015, he was doing what many other members of the workforce did to keep energy levels up throughout the day: drinking copious amounts of caffeine.
"As I became more entrenched in work, I did what everyone else does in this information age does to keep up, and I self-medicated with energy drinks and too much coffee," Miller said.
The company launched with a nootropic (referring to a group of substances linked to improved cognitive function) capsule, and after seeing strong success with its supplement line, Miller and his team decided to enter the beverage category.
"[We thought to ourselves] how do you have a better technology instead of just coffee? Because it can only get you so far," said Miller. "We thought if we could get this drink into Whole Foods, more people would be open to the idea. For us, it was how do we get this into more people’s hands?'."
Koios' line of carbonated canned beverages features nootropic ingredients including medium chain triglycerides from coconut oil, vitamins B6 and B12, ginseng, Lion's Mane mushroom, and caffeine from green tea.
The drinks are available in Whole Foods and at Walmart in the retailers' functional beverage set. With its clean and fresh branding, Koios drinks are doing especially well with active female consumers, said Miller.
"When we repackaged we wanted it to be feminine, we wanted it to be clean, we wanted it to be very ingredients focused. Like a sparkling water with a ton of benefit. Who we really saw traction with is 25- to 45-year-old females who are upwardly mobile and really care about their body. Kind of the same demo[graphic] as Lululemon would have," Miller said.
Nootropics, the next kombucha?
According to Grandview Research, the global market size of digestive health products is more than five times the size of the market for brain health products ($32.7bn vs. $6.2bn).
"I look at nootropics as sort of where kombucha was seven years ago," said Miller.
If the general consumer now understands to a certain degree what a probiotic is, then it's not too far of leap to develop a basic understanding of nootropics, noted Miller.
"I think you’re about to see this huge explosion [in brain health]. We saw the explosion in gut health, everyone understands probiotics and prebiotics now. I think in the next few years, everyone’s going to want a nootropic. I think if gut health can be that fancy so can brain health. I think it’s an even more attractive category."
Future of the functional beverage category: Direct-to-consumer and sweeping label changes
According to Miller, the hottest brands that have come out of the functional beverage space in recent years have all started online where they built a loyal following (e.g. Soylent, Bulletproof, Dirty Lemon).
The reason Koios was able to gain distribution with major retailers such as Walmart and Whole Foods, is because the brand built a strong online audience first, noted Miller.
"I personally think that people are more brand loyal than they’ve ever been. I think you’re going to see a lot of brands – like Bulletproof did – come in and sort of take over... brands that are really direct-to-consumer focus are going to win the battle," Miller said.
Miller also believes that the FDA's final guidance of Nutrition Facts labeling regulations will have a noticeable impact on food and beverage manufacturers.
"I do think there’s going to be some sweeping changes in how products are labeled. I think there will be even more accountability," he said.
'We can innovate as often and as quickly as we want'
Koios has the advantage of operating their own production facility, opposed to working through a copacker to produce its wares, which can delay production cycles, speed to market, and innovation, according to Miller.
The brand's latest innovation is Fit Soda, a more indulgent option for consumers looking to get their soda fix. Fit Soda contains BCAAs (branch chain amino acids) and zero sugar (it's sweetened with sucralose). "I think one of the things that holds CPG brands back is innovation, because most of us are dealing with co packers, third party faculties, and that almost killed us in the beginning," Miller said. "So what’s unique about us is we can innovate as often and as quickly as we want."
"We really wanted something that was non-caffeinated that was indulgent and still incredibly healthy. Kind of following the footsteps of Halo Top and Smart Sweets," Miller said.
"If everyone’s being honest, I really want to drink soda."
Interested in learning more about the future of the functional beverage category? Tune into our FREE-TO-ATTEND LIVE Beverage Trends webinar on Thursday, March 19th at 11:30 a.m. CST.
Check out our panel of beverage industry stakeholders and the topics that will be covered HERE.