Breakreleased in 2018 with CBD-infused drinks,and says he stays”the clear leader in the CBD beverage category” with distribution in CBD-friendly states across the country.
However, founder and CEO Ben Witte has made it clear from the start that he is “build a brand, not market an ingredient,”and he says Recess Mood line without CBD – launched in 2020 – now represents 40% of the business and is on track to generate “more than 50% of sales” at the end of 2022.
“We see this as a broader relaxation category with multiple subcategories to play in‘
Speaking with FoodNavigator-USA after launching three new flavors of Recess Mood and beginning distribution in 1,000 Albertsons stores under multiple banners, including Safeway, Albertsons, Pavillions, Shaw’s and Kings, Witte said he’s also secured additional CVS listings and struck deals. with Fresh Thyme and the airport channel via OTG, with additional authorizations expected.
The new Mood flavors, which come with a reduced retail price of $3.49 (down from $3.99), will hit shelves in October, said Witte, who said the brand capitalizes on key trends from “mental wellness and alcohol moderation… we see this as a broader relaxation category with multiple sub-categories we can play around with.
“Instead of positioning ourselves as a CBD drink brand, we focused on establishing the ‘take a break’ usage occasion and developing a leading lifestyle brand focused on marketing a feeling: calm, cool, serene.”
Regarding the price reduction, he said: “We’ve done a lot of work on optimizing COGS (cost of goods sold) while maintaining quality, so we’ve moved to larger packers and we have economies of scale. Transport costs and toll rates have also stabilized a bit.”
“We are developing a leading lifestyle brand focused on marketing a feeling: calm, cool, serene”
He added: “When we talk to retailers, they see alcohol moderation as this mega trend, and they see the trend for consumers to prioritize their mental well-being, which will affect many parts of the store in many categories.
“We’re seeing speeds for Recess Mood on par with, if not stronger than, our CBD lineup, and it’s meeting the need for consumers from retailers who can’t carry CBD. There are also various ingredients here that we can use for mood and relaxation, whether it’s CBD, magnesium, adaptogens, nootropics, etc., and these functional ingredients will be combined in different ways.”
Recreational products are typically found in functional drink sets alongside kombucha and other gut health drinks, energy drinks and other better-for-you drinks, Witte said: “Kombucha is spaced out too far, so we’re seeing drinks like Recess, which offer a proposition around mental wellness, taking space away from kombucha, even though every retailer is different.”
Formulation: ‘Not tired, not connected…’
Based on flavor, the Recess Mood line contains combinations of magnesium-l-threonate* and botanicals like l-theanine, lemon balm and American ginseng, which are associated in consumers’ minds with calm and relaxation, Witte said. , who says that fans of the brand cite multiple occasions of use, from a morning drink to start the day on the right note, an afternoon calm moment, after work to relax or as an alternative to alcohol.
Recess, who is careful not to make any harsh claims about the package and uses rather confusing phrases like “to take you to the place where you want to be” Y “adaptogens to help maintain balance” – It doesn’t list the amounts of magnesium or botanicals in its Recess Mood line, but Witte insists it’s using significant amounts that provide a noticeable effect for most consumers.
“We’re not just spraying it on, as we think it’s so important that people can feel something when they drink our products and we have thousands of testimonials to back that up, even though people react to functional ingredients differently.”
CBD: ‘It is operating in a constrained addressable market with a patchwork of state regulations’
Recess’s original products, infused with a combination of botanicals and 10 mg of CBD from a broad-spectrum hemp extract, continue to perform well, though regulatory uncertainty at the federal level has kept many major retailers from entering the market, Witte said. .
“We see both product lines co-existing, and we see a lot of momentum on the CBD side of the business. We now have 24 states that have passed state regulations of some kind. [permitting the sale of CBD-infused foods or supplements] and that’s causing some major retailers like Sprouts and Wegmans to develop the category.
“Large spirits distributors like Southern Glazer’s, Breakthru Beverage Group and RNDC have gotten into the space over the past year, but it’s definitely an unusual business situation to navigate because you’re operating in a constrained addressable market with a patchwork of state regulations. And I think you’ll see that a lot of brands won’t be able to get to the other side, and I think we’re still a long way from Target or Whole Foods or Walmart carrying CBD beverages.”
When asked about the landscape of CBD drinks, he said: “It’s been pretty wild. Since we launched, there have probably been 100 CBD beverage brands launched, but not many have built a very geographically distributed footprint. If you look at just the measured channels, we’re 50% bigger than the number two brand, and that doesn’t take into account independent accounts like New York City wineries and liquor stores, where we have a really big business, as well as our e-commerce business.
‘We are not competing with LaCroix’
Asked about the challenges of selling premium beverages to consumers on limited budgets in a period of runaway inflation, drinks like Recess “They are not competing with LaCroixWitte pointed out.
“When people drink a can of Recess, they are drinking it instead of alcohol, cold brew, or kombucha, and interest in the proposition that CBD offers — helping people feel calm, balanced, and relaxed — is only accelerating. , in any case”.
“There was this kind of gold rush mentality and everyone became hemp growers and CBD extractors.”
So what is happening on the supply side?
When the 2018 Farm Bill Passed, which removed industrial hemp from Schedule I of the Controlled Substances Act, but did not suddenly legalize CBD and other cannabinoids in foods, beverages, and supplements, “There was this kind of gold rush mentality and everyone became hemp farmers and CBD extractors,” Witte says.
“And basically supply got ahead of the addressable retail market and prices went down.”
Looking ahead, he added: “We continue to see a lot of activity in Congress, which is fed up with the inaction of the FDA in creating a national regulatory framework as can be seen in a recent letterwritten to the FDA by the sponsors of the CBD Product Safety and Standardization Act. We still believe it’s a question of when, not if, the FDA acts.”
*Some animal studies show that magnesium threonate is more effective at increasing magnesium ions in the brain and improving cognitive function than magnesium sulfate.
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