Eat Beyond joins Global Edge Investments, a Toronto-based investment and management company, and other industry veterans including Jorn Socquet, a 14-year executive from AB InBev, as an early-stage investor in Daydream.
As the first beverage brand investment for Eat Beyond (the firm's portfolio includes several alternative protein companies such as Eat Just Inc., Above Food, Nabati Foods, among others).
Commenting on the investment, Eat Beyond CEO Patrick Morris said, "We like the idea that not only can people eat better but drink better too."
Awareness for adaptogens on the rise
Based in Canada, Daydream sparkling water contain 10 calories per can and a blend of 10 mg of hemp seed oil (the oil extracted from raw hemp seeds containing below 0.03% CBD), 50 mg of ginseng root powder, 50 mg of schisandra berry powder, and 30 mg of moringa, which together the company claims can help boost mood and mental clarity.
Founder and CEO of Daydream, Alex Simonelli, explained that the decision to create and launch Daydream was based on a clear gap he saw in the functional beverage space for something that wasn't a caffeine-based product (i.e. coffee or an energy drink).
"Basically when I started the beverage it was based on the fundamental belief that people would be reaching for calm vs. something that was jam packed with synthetic ingredients," Simonelli told FoodNavigator-USA.
"I think that before the pandemic everyone had somewhere to go or somewhere to get to, but I think now due to the pandemic, the need for calm and mindfulness has accelerated."
This shift in consumer behavior is giving rise to a newer segment of non-caffeine-based functional beverages featuring adaptogenic other botanicals associated calming and de-stressing benefits. Daydream aims to lead this emerging category beginning in its home market of Canada, said Simonelli.
"Adaptogens are rapidly increasing in awareness, and they’re optimized for times of stress," he said, noting that he believes functional beverages featuring these ingredients will outpace bottled water in CAGR in the next three to five years.
A new use case
"I think it has the most use cases than any other beverage product I’ve seen on the market. The use cases kind of blew me away," said Simonelli, who notes that consumers are consuming it morning to night as a focus replacement for coffee, mid-afternoon pick-me-up, and alcohol replacement in the evening.
"It’s a little bit more full-bodied than a sparkling water, and it’s more exciting to bring to a party or friend’s house," he said.
What do we know about adaptogens?
According to Daydream Drinks, the term 'adaptogen' refers to "plant-based herbs that help interact with the body's endocrine system to promote balance & clarity. In many cases, they're known to help the body adapt to stress faster, re-align mood, or even increase natural energy reserves."
According to David Winston, RH (AHG), founder of Herbalist & Alchemist and author of Adaptogens Herbs for Strength, Stamina and Stress Relief, told our sister publication NutraIngredients-USA that there are nine well-researched adaptogens (two of which are in Daydream's formulation): Asian Ginseng (Panax ginseng), American Ginseng (Panax quinqeufolius), Ashwagandha (Withania somnifera), Eleuthero (Eleutherococcus senticosus), Schisandra (Schisandra chinensis), Rhodiola (Rhodiola rosea), Shilajit (Asphaltum bitumen), Rhaponticum (Rhaponticum carthamoides), and Cordyceps (Cordyceps sinesis).
Research around moringa, the other key ingredient in Daydream, include evidence that the plant has protective benefits against insulin resistance, hypercholesterolemia, high blood pressure, cancer, and general inflammation, according to a 2017 review published in the journal Antioxidants.
The company also adds that the hemp extract it uses in Daydream contains over 120 biologically active terpenes (a large class of aroma-creating organic compounds produced by many plants including hemp associated with various mood-boosting and calming mental benefits), which interact with the body's immune system.
Since launching in late 2019, Daydream saw 550% year-over-year growth in 2020, and projections show the brand will register triple-digit growth again by the end of 2021.
By the end of 2021, Daydream will be sold in 1,000 retailers, representing a 2,300% growth in distribution. The products are also available online through Daydream's DTC website where consumers can purchase an 8-pack or 12-pack sampler of the brand's three flavors for CA$33.99 and CA$62.99, respectively.
"Daydream has shown impressive growth in its brief history and is well-positioned to capture even more of the beverage market in the years ahead. Its unique and strong branding has positioned it well in the industry for organic, word-of-mouth growth, which is critical for any product that contains hemp as an ingredient in Canada," said Morris.
When asked about plans to expand to new markets such as the US, Simonelli said that while he does believe Daydream has the potential to be a global beverage brand, his immediate focus is on saturating the Canadian market.
"We have penetrated the traditional grocery market [in Canada] and unlocked the appetite that these grocers have for this," said Simonelli.