Eat Beyond CEO flags hemp and adaptogens’ potential for functional beverages
25 May 2021 --- Mindful consumption has led to “tremendous” opportunity within functional beverages for the health and wellness category. This is according to Patrick Morris, CEO of Eat Beyond Global, who speaks with NutritionInsight following the company’s investment in Daydream Drinks. The Canada-based company specializes in sparkling water with hemp extracts and adaptogens.
“Mindful consumption might have been accelerated by the pandemic, which has sparked a general increase in awareness of general health and the need for stress reduction, as well as a desire for products that are cleaner and that contain less sugar,” explains Morris.
Indeed, Innova Market Insights crowned “Mood: The Next Occasion” as one of its Top Ten Trends for 2021. According to a survey carried out in 2020, 44 percent of global consumers have taken action to improve their mental and emotional well-being. Closely related to this is spiritual time, with nearly a third of consumers prioritizing this as well.
Acknowledging the potential of this arena, Morris points to data suggesting that functional beverages will grow to be as large of a category as regular bottled water in the coming years.
Other recent launches in this space include PepsiCo’s Soulboost sparkling functional waters and The Naked Collective’s Mude drinks, which recently landed a US$12 million investment.
Daydream Drinks are positioned as an alternative to coffee and conventional energy drinks.
Supporting growth
Reflecting on the importance of the investment, Morris explains that Daydream Drinks will now be able to scale to meet its growing demand across Canada, accelerate product manufacturing and conduct R&D to develop new products, concentrates and formulas. It will also support retail and trade marketing, as well as other growth initiatives.
In addition to the monetary investment, Eat Beyond’s deal also led to an advisory seat at Daydream Drinks, represented by Alan Linder, who is a core member of Eat Beyond’s Investment Committee.
“We approach each investment differently on a case-by-case basis. With that said, we want to cover as many categories across the full spectrum of the future of food. Eat Beyond is focused on creating a balanced portfolio of innovative companies, which are ready to disrupt the conventional food supply chain,” shares Morris.
Diverse investments
This portfolio spans agricultural practices, transportation, food processing and packaging. When asked specifically about investing in food and beverages with psychoactive components such as THC, Morris says: “We are open to exploring all types of nutrition that are good for people and the planet.”
When choosing which companies to invest in, Eat Beyond looks for good fundamentals, people, innovation and a corporate culture that supports the movement toward a sustainable future in the food industry globally.
Eat Beyond’s current portfolio includes three publicly traded companies and eight private companies. Last June, Eat Beyond Global Holdings’ investment in The Very Good Food Company (VGF) ballooned more than 800 percent following VGF’s stock market launch.
Eat Beyond also has invested in Singaporean plant-based and lab-grown protein disruptors SingCell and TurtleTree Labs.
Word-of-mouth growth is critical for hemp F&B in Canada due to marketing restrictions.
Hemp’s potential
While Daydream Drinks feature hemp, they contain below 0.03 percent CBD and zero THC, making them a non-cannabis product.
Morris emphasizes the impact of hemp beyond these well-known cannabinoids. “Hemp extracts are rich in nutrients, omega 3, omega 6, and help with brain and heart health. They also include more than 120 biologically active terpenes, which boost the body’s natural immune system.”
However, the inclusion of hemp has meant that word-of-mouth growth has been critical for the product in Canada. This is primarily because, unlike topical hemp, ingestible hemp cannot be advertised on Facebook advertisements or via other traditional channels.
“Ingestible hemp gets categorized as CBD even though it is not. This means that Daydream drinks had to build more grassroots, genuine partnerships and real influencer relationships based on the product’s shareability. Basically, hemp cannot have a transactional relationship with the consumer via regular ads,” says Morris.
In a bid to help support the spread of knowledge, the American Herbal Products Association recently published a Hemp Lexicon.
This space is heating up around the world, with a Welsh university recently embarking on a £1.1 million (US$1.5 million) partnership with TTS Pharma to explore F&B applications.
NPD is also proliferating, with offerings ranging from gummies to Mother’s Day packages.
By Katherine Durrell, with additional reporting by Missy Green
