Californian company VIRUN began life in the pharmaceutical field, investigating drug delivery technologies, a background that serves it well (given its patented technologies to deliver bioactives such as Omega3s), as US consumers demand drinks offering benefits beyond simple hydration.
“We are seeing the supplement industry, the food and beverage industry and the pharmaceutical industry all starting to bridge together,” VIRUN CEO Bromley tells Ben Bouckley. “A lot of the drug firms are not investing as much in R&D for new drugs anymore, because everything that’s a drug has been invented."
Pfizer, GSK, Charlie & the Chocolate Factory...
“So they’re boosting R&D and proliferating their consumer products divisions. Pfizer, GSK, Bristol Myers-Squibb, they’re all concentrating heavily on consumer products.”
“It’s only a matter of time before we see products, colas for example, reinvented that used to be bad for you but are now not only better, but have value-added health benefits,” Bromley adds. “Think of Charlie and the Chocolate Factory when you just pop a pill and get roast beef, mashed potatoes, and dessert.
“Hopefully we won’t turn into Oompa Loompas – but that’s the direction that we’re going in long term. To take something that gives you everything and is yet better than food. That's the Holy Grail.”
Bromley says that top health claims trending in US beverages were (1) no claim at all – simply the presence of DHA and EPA Omega-3s, then (2) heart health claims, energy, joint health, cognition/brain health and well-being claims, with industry was looking beyond gaba (gamma-aminobutyric acid) and melatonin in this last category.
Future beverage health claims
And looking to the future? “Joint health will be big in the future, and glycemic, though no-one wants to touch that now, in terms of making any therapeutic claim towards lowering glucose, having a better glycemic value, or diabetes,” Bromley adds.
“Look at resveratrol – there’s a shift from its anti-ageing to glycemic impact, reductions in blood glucose – while weight management ingredients are starting to surface, curcumin (which has glycemic health claims) and other new ingredients now in supplements.
“These provide added-value claims for beverage that will spur the next generation of products towards heart health and diabetes, tapping a huge demographic due to the proliferation of that disease.”
Big pharma’s move to meet new consumer demands also dovetailed with the business of founding a successful beverage startup that redefined mature and fiercely competitive beverage categories, Bromley says.
“No-one’s going to invest millions to put a new conventional brand on the shelf, because they’ll simply get killed by the likes of PepsiCo and Coke. It’s an evolutionary struggle where the fittest survive,” he adds.
“Take Coke's Vitamin Water. It owns the market. But a new product that makes people think: ‘I could have vitamin water with extra added-value ingredients’. That restores the competitive dimension.”
Functionality means differentiation
Smaller brands typically targeted a buyout within a three to five-year period, Bromley explains. “So if you get enough shelf space and take away enough of the market, then your bigger rival will likely buy you out, since the latter more often buy than develop brands nowadays.”
“Such drinks may reach a smaller market, but because a brand owns that market, and there’s no competition, they can create a larger margin. Then you build a following. That’s when someone like Zico Coconut Water gets bought out.”
Along these lines, Bromley says VIRUN helped develop CocoFit, an Omega-3 and vitamin D fortified product that also couples the natural benefits of coconut water, with Omega-3s shown to increase osmolality, the rate at which water diffuses through cells, thus helping with hydration.
Differentiation demands brought added pressure, Bromley adds, since Omega-3s (a big strand of VIRUN’s functional beverage business) were formulated in many other products the firm works on, which created the need for a further differentiation and added value to entice client and customer.
“It’s tough, but through this process, we’re finding all these new ingredients: oils, non-polar compounds with great health claims and are used in supplements, soft gels,” he says. “For instance, someone came to us and said: ‘I want to put Boswellic Acid into water’.
“That’s a great idea, since it has these joint health claims, and also acts as an antioxidant towards Omega-3.”