Awarded "worlds best premium beverage" at WBIA
NOA Relaxation is a beverage with natural herbs that contributes to reduced stress and increased focus. Enjoying early success now were scaling up. Join us!
NOA Relaxation is an award-winning beverage with natural herbs that contributes to less stress and increased focus (Green tea extract with L-theanine, Lemon balm). The company was founded by Mr Noa Fridmark in late 2013 and the product was launched in Sweden and Norway in late 2014, using two different launch models to evaluate the best way to market. Since then NOA Relaxation has won a number of international awards: in November, 2014 ”best premium beverage” at WBIA – the largest beverage awards in the world, an international panel of industry experts deemed the complete branding concept and packaging to be the best in the world), in May 2015 NOA Potions AB won the title ”best company” in Business Challenge, a Swedish start-up competition and in September 2015 the company was awarded the prestigious Red-dot design excellence award. NOA Relaxation has attracted strong international media coverage with 80+ newspaper articles and more than 150 bloggers writing about the company and product.
Market results in Sweden and Norway are encouraging with strong sales and take-off in Q1 and Q2 2015. A test of two different launch models have shown that a combination of both models probably is the optimal way to market, using the celebrity/extremely selective distribution approach for the first 2-3 months after launch to build a buzz followed by a broader roll-out in the following months.
Q3 sales showed a significant slowdown, due partly to underperformance by the sales team and partly as the company needed to change production facilities due to quality- and capacity problems in the old plant. New, high capacity, high quality, production facilities in Germany made the first product run with batches passing all quality tests in August 2015. The new supplier enables a maximum production volume of 220 million bottles per year which will well cover projected volumes for the international roll-out of the brand in the coming two years. The product supply system with everything from suppliers of extracts and key ingredients to bottles, labels, transportation and logistics is now up and running with a high degree of quality and functionality. Now we only work with the largest and/or most established top quality suppliers.
The company experiences a pick-up in sales in Norway and Sweden as the listings in the largest coffee-chain, Espressohouse, starts to generate volumes during the fall. Listings with the largest convenience store chain Reitan (Pressbyrån, 7/11, Narvesen) is underway in both the Swedish and Norwegian market during late October. The largest hotel chains, gym chains, health store chains and smaller coffe chains are also in negotiations for listings as well. In Sweden the concept NOA at Work (supply to major offices) is currently being rolled out and will be marketed during October – December. Listings in larger chains will bring the consumer price down overall which will most likely impact the sales volumes positively. All launches are supported by strong trial offers and PR/marketing campaigns.
NOA Potions needs to ensure a high speed in roll-out as volume take off and awareness building is slower for a small company lacking the marketing funds and existing distribution networks of large, international beverage companies. At the same time care must be taken not to overstrain the team. The entry model is, hence, very pragmatic and involves contracting local distribution partners, giving them brand-building support and sharing best practices. NOA Potions AB has been approached by more than 400 distributors for sales in their respective local markets (among them Suntory from Japan). Status on the international roll-out is the following: Contracts are signed with our Irish distributor and we are in the final stage with UK negotiations. Selecting the right distributor(s) is key as we need to ensure a strong interest and passion for the product in combination with a good reach and professional staff.
To execute the roll-out NOA Potions AB has hired a top ranked international expansion manager with extensive experience in international consumer goods roll-outs (Carl Ivarsson) and an experienced marketing manager with many years of international beverage marketing experience (Nina Gillsvik). The board of directors are currently being complemented with a high profile FMCG executive and the new working chairwoman of the board, Boel Rydenå Swartling, has extensive fast moving consumer goods, media and management experience.
We feel confident that we have the product quality, the supply chain, the concept and the right team to secure a professional and swift roll-out. Key reasons for investing in NOA Potions AB at this point are:
- Very high performing and committed entrepreneurial founder and main owner
- Brand concept has received very strong acceptance in the industry, media and trade
- Production and supply chain is tested, high quality and well functioning
- Product has proven strong consumer acceptance and demand where launched (Sweden and Norway)
- Product has proven strong trade and distribution interest and support in Sweden and Norway and all other markets where NOA Relaxation has gained media exposure
- Very strong management team in charge of business and international roll-out
- Very strong trade/distribution interest in first roll-out markets (UK/Ireland/Benelux/US/Japan)
- Very strong interest from a large number of well established distributors from all over the world at trade fairs.
Concept and Brand
The concept and product of NOA Relaxation stems from the personal story of the founder, Mr Noa Fridmark, who chose to leave his successful career due to lack of belief in his company’s values and a hectic carreer lifestyle that left little time for a balanced life. He spent the following time in his summer-house in the Stockholm archipelago to try to sort how he should move forward. Feeling the strenght of inner trueness to his core values and the calm relaxation of the clean archipelago nature, Noa, who has a passion for beverages, set out to find a way to package his feelings and conviction in a beverage. This is his own story:
"Professionally, I was at the top of my career in a company that was about to go public. Despite an executive marketing title and a sizeable salary, I fealt empty. Most of all, I just couldn’t stand for the company’s core values. So, I did it. I quit. Everything.
It was the best decision I have ever made. My new home became an unihabited island in the outer wilds of the Stockholm archipelago. This giant leap off the carreer path and away from the city was life altering. Gazing out at the sea, serene and in the presence of the moment, an intense calmness washed over my soul.
It struck me that there must be other people who yearn to feel this way. How coulc I bring back the essence of my island to the cosmopolitan crowd in the city? A natural beverage became a way to share this feeling."
Vision and positioning
Thus, the brand vision is a world where people dare to go their own way and choose activities that give them happiness and meaning in their everyday life. A world where people choose their own path regardless of what others may think. This vision rests on a brand foundation of Scandinavian nature, whose purity inspires everything from the flavours and esthetics of the product to the values of a healthy lifestyle and doing good.
The brand benefits are emotional: ”Relax – Focus … on what’s important in life” and rational: ”A drink containing natural herbs that contributes to reduced stress and increased focus”.
The product exists in three flavours: Elderflower & Rhubarb, Blueberry & Birch and Wildapple & Gooseberry. The product flavours are very well liked both in consumer testing and IRL, with the Blueberry & Birch showing a slightly better offtake.
When definining our target group we use a value driven segmentation model combined with core demographics. From a value standpoint our consumer target group is so-called conscious materialists. They aspire to the lifestyle and values of the idealist while leading a materialistic life. They want to move out to the countryside but they are not willing to make the sacrifice to leave their career and urban lifestyle. However it’s important for them to make conscious decisions and to have a healthy lifestyle. They do not watch TV instead they make an active choice and watch TED.com, VICE, HBO etc. This positioning is well researched and we interviewed 100+ people to ensure full consumer understanding before formulating the value positioning.
In terms of demographics, to-go consumption soft drinks tend to have quite a young target group (15-30 years). Since NOA Relaxation has strong product benefits also for older professionals with a stressful and hectic lifestyle indications are that our target group stretches up to 50 years. This will be further reinforced by our NOA at Work sales program. Health beverages also tend to have more female buyers than male. We therefore include a female skew in our marketing efforts.
To sum up: Demographics: 60% women, 40% men, Age span 18-50. Mainly urban areas, Higher income and education than average. Values: Conscious materialists, i.e. people that have a materialist lifestyle but aspire to become idealists. They want to live a healthy, conscious and stress free life but are not willing to give up their carreers, their status and life-style to realize their aspirations.
NOA Relaxation is a still beverage with natural herbs that contributes to reduced stess and increased focus. It is free from preservatives, artificial flavours and artificial colours. It is low calorie and completely free from caffeine. The flavours are all natural and inspired by the Scandinavian wilderness.
The key active ingredients are Lemon Balm (Melissa Officinalis) and L-theanine from green tea extract. They are both clinically tested and scientifically proven in many publicized academic papers. The physiological and psychological effects on the body and mind are very similar to meditation.
L-theanine is an amino acid from green tea (Camellia sinensis). There are a number of studies showing that it has a significant calming and mood improving effects at the same time as it increases concentration and memory function. As it relaxes without causing drowsiness it is office friendly and ideal to consume both in situations demanding high mental performance or when stressed. Below are list of effects found in scientific research.
Physiological effects: - Stimulation of alpha brain waves, 8-13 Hz, that is associated with a relaxed but alert state of mind. - Increased focus - brain scans show a significant increase in alpha brain wave activity directly associated with the task the subject focuses on and decreased peripheral activity (translates to focus). - Anti stress - decreased blood pressure. - Anti stress - decreased pulse. - Improved memory function. - Improves the immune system - strong antioxidant.
Psychological effects: - Reduced stress - Reduced anxiety - Increased positive mood - Increased focus
Melissa Officinalis has a calming effect and contributes to mental well-being. In a study called ”Attenuation of laboratory-induced stress in humans after acute administration of Melissa Officinalis” the researchers Kennedy, Little & Scholey made a double-blind, placebo-controlled, randomized, balanced crossover experiment which shows that Melissa Officinalis improves your cognitive function and make your mind work faster. In the appendix there is a list of the scientific papers supporting the statements above.
To ensure a high quality feeling to the product NOA Relaxation has a proprietary, custom designed 3,14 (pi) dl pet-bottle with a glass bottle look and feel to it. It is fully recyclable and has been a key factor behind the design awards the product has won.
Market and competition
The global market for relaxation beverages was estimated to USD 153 million in 2014, growing at a rate of 23-25 % per year. The general industry estimate is that the relaxation beverage category will continue to have a similar development as the energy drink category thats been defined by Red Bull, launched in the US in 1997 when the category exploded, reaching a global turnover of USD 50 billion in 2014, according to Beverage Daily.com. The relaxation beverage category has been listed as one of the top industries with the biggest projected growth over the coming five years, by Inc. Magazine and a similar analysis has been made by Bloomberg that forecast the relaxation beverage category as the next billion dollar category within beverages.
An interesting comparison is the growth of the energy drink category since launch. This growth has mainly been driven by one brand: Reb Bull, currently representing 43 % of the global market sales. Looking at a smaller, yet very fast growing functional water segment, coconut water, can also serve as a much more narrow and conservative comparison on category segment growth.
Marketing and PR
As the relaxation beverage category is not very well established our efforts needs to focus on explaining the product (towards the consumer) and the category (towards trade). Current expericence is that PR and person to person introduction of the product and category is the most effecient sales method. For consumer explanation there is also a range of POS material with category and product focus to help explaining the concept and the product benefits.
NOA Relaxation was launched in Sweden in October 2014 and in Norway in November 2014 using two different launch models in order to evaluate key elements of success in the roll-out plan. Norway used a very selective, celebrity endorsement building-buzz-strategy whereas Sweden focused on broad reach and a broader distribution build-up, primarily via bloggers, social media and PR. Key indication is that a mix of these two strategies, with different timing, may be the most successful way forward.
Distribution and Sales
The distribution model is to sell via quality distributors that express a passion and a strong interest in the product and have the right contacts to build product buzz with key influencers. In some cases it might therefore be better to enter a market with a smaller but more passionate and well connected distributor than to go with a broader partner that risks to fail with the marketing. In all markets except Sweden (to ensure market and consumer contact) we will not employ any local sales staff but only work via the chosen distributors. We supply full brand platform support (brandbook, Noa speeches, key learnings seminars) and all POS material templates. In Sweden the sales staff consists of one key account manager (managing chains) and two sales peope, one in charge of NOA at Work and one general sales rep.
Both Sweden and Norway are in launch stage two with listings in Swedens largest coffee chain Espresso House and underway (in negotiations) in Norway. In Sweden listing in Reitan convenience stores (7/11 and Pressbyrån) is completed (to be rolled out in week 49) and the Norwegian distributor is in negotiations with Reitan as well. This will add 500+ outlets in Sweden. The largest healthstore chain Life with 220 stores will carry our product from week 45. NOA at Work is being rolled out during the same period with early feedback from key employers being very positive, Universal is one of our first customers.
A key challenge is to educate store staff about the category and the product. The phase 2 roll-out are therefore supported by new POS material directly on the bottle explaining the product and category in a short and clear way. We will also run heavy trial offers in all chains to secure consumer offtake and trial. A second wave marketing plan is launched in October with AAA-celebrity endorsement, PR and events.
The pricing strategy is to be premium priced but in a way so that price do not become a barrier to trial. The aim is to position NOA Relaxation in the upper span of easy decision-making. We aim to be priced equally to the other products in our targets groups consideration set. Convenience stores will have a considerably different sales price than an upscale café in an exclusive area. For Sweden, for example, a purchasing decision for a beverage in a larger café chain would be easy and quite automatic in the price range of 29 – 35 sek. The desired NOA Relaxation price point in this case would be 35 sek. From 35 sek and on the consumer needs to analyse the product and the decision more and this, of course, decreases offtake in the wide target groups. The desired target pricing for the convenience chains is 29 sek.
Production and logistics
The product compound and recipe of NOA Relaxation is made by the worlds largest compound supplier, giving the company an excellent base and flexibility in adding new flavours or adapting extisting ones. There is also no limitation in raw material supply.
The product is currently sourced from a leading beverage plant (also supplying Pepsi Co etc) with an aseptic filling technology and packaging technology that allows for 12 months shelf life in ambient temperature without any preservatives added. Maximum theoretical yearly production is 220 million bottles.
With the international expansion team in place (2 full time employees) and new, high capacity production facilities tested, the roll-out in new markets have just started. Of the more than 400 distributors that have contacted the company, there is an ongoing dialogue with ca 30 distributors, representing the same number of markets. However, the roll-out will follow a scheduled launch model as far as possible in order to minimize production, logistics and consumer acceptance problems. An evaluation model including market maturity, relaxation beverage category acceptance, distance from production plant, availability and contacts with suitable distributors, population/gdp and influence factor has been used to select the priority of the markets.
Given that the company has limited marketing funding and rely on bulding buzz, social media and PR the launches in new markets will be relatively slow compared to product launches with heavy advertising and media budgets. Hence, the international expansion plan is fairly quick in terms of roll-out, signing up distribution partners, and getting them started. We estimate that it will take some time before volumes start building up and that the lag will shorter or longer in different markets depending on market characteristics and how well the distributor manages the launch. An evaluation model of distribution partners is being used in order to select and hand-pick the optimal partners for the international expansion. The model includes industry expertise, distribution network, track-record of building new brands in beverage, overall company profile and resources/dedication to the NOA brand and product.
The first week in September 2015 NOA Relaxation was featured at the leading UK fine food fair in London and interest was greater than anticipated. 10 different distributors has been evaluated for the UK market and final negotiations with 2-3 key potential partners will take place in London in week 39. Both Harrods and Selfridges want to list the product exclusively prior to national roll-out.
The company has just signed with an Irish distributor who already secured 250 healt oriented sales points and then another 250 to follow shortly. The european head offices for Facebook and Airbnb have both signed up for NOA@work giving their staff free NOA Relaxation. Facebook alone are expected to generate larger volumes than Espresso House.
Additionally, preparations for a market entry into the US is on-going. Due to the size of the US market and that certain regions rank higher in influence, a launch will take place in NYC and California before entering other regions within the country such as Florida and Texas. Additionally, a pre-launch with a leading department store in NY will be evaluated.
In October we participated at the Anuga fair that was very successful, in total we received more than 200 leads from 40+ markets whereof 80 are of substantial interest.
The expansion in Asia during Q1 and Q2 2016 (Japan, China, India and Korea) will require a lot of focus. To facilitate this process the company has entered into cooperation with 3 business partners that will facilitate the search and introduction of the right distribution partners. However, as a result of the strong international interest in NOA Relaxation following the World Beverage Innovation Awards discussions with some Asian distribution partners are already initiated. The planned launch in Japan in February 2016 will coincide with the leading Food expo Fair in Asia. In conjunction with presenting NOA widely both to trade, consumers and other Asian distributors, we count on finding a good quality and quantity of contacts and discussions not only for Japan but also for China, Korea and India as well as other neighbouring markets.
The plan is to keep the organization lean and cost efficient, with a minimum of overhead costs. Most of the POS- and marketing material for the launch has been developed and the templates are ready. Launching a fast moving consumer beverage requires a lot of experience in processes and execution (in the end – retail is detail) thus the organization has added an experienced marketing director, Nina Gillsvik, with a strong background in beverage marketing and sales in international markets as globally responisble for the Absolut Vodka brand. To execute the international expansion the company has hired a skilled negotiator and sales executive with international experience in rolling out consumer brands, Carl Ivarsson.
Boel Rydenå-Swartling, working chairwoman Boel started her career with Procter & Gamble moving on to business development and has since been marketing manager at Microsoft Nordic and the CEO of MTV/Viacom Nordic. She has held positions as board member in various venture capital firms, aided the government in new policy making to improve the entrepreneurial climate and aided many growth companies as an investor and growth catalyst. Boel is also a public speaker and author. Boel is deeply involved in day-to-day operations ensuring the management team delivers according to plans. Choon Seng Tan, board member Ex Group CEO of WBL, a large diversified group listed in Singapore and subsidiaries listed in US Nasdaq. Ex Managing Director of Hewlett Packard of Southeast Asia. Currently Chairman of Truscott and co-founder of several technology companies in India, Singapore and China. Council member of the Singapore Institute of Management Group. Daniel Daboczy, board member Daniel is the founder, CEO and founder of Funded by me, the leading crowd-funding company in the Nordics. Daniel has a unique position as the bridge between investors and entrepreneurs where he constantly sees business ideas and their success factors. Daniels enthusiasm, experience and networks are invaluable to NOA Potions. David Sandström, board member David is the CEO of DDB, the largest advertising agency in the Nordics with clients like Samsung, Mc Donalds and Telia. He is also often invited as an educator at the Stockholm school of economics. Noa Fridmark, board member See description above.
Christopher Rosenqvist, associate professor at Stockholm School of Economics Göran Lundquist, former CEO at The Absolute Company Jarno Vanhatapio, serial entrepreneur and founder of Nelly.com Krim Talia, Business Area Manager - Life Science at SP Micael Dahlén, professor at Stockholm School of Economics Per Schött, serial entrepreneur and founder of Eventum Richard Törnblom, CEO at LynxEye – brand consultant Robert Grenmark, former GM at Red Bull Nordic.
The company still relies on external funding. For this crowdfunding we seek funding of € 534 000 at a valuation of € 13,9 million.
The capital will be used to finance our international expansion. Opening up new markets and supporting distributors has a high cost and we expect the new capital raised in this crowd funding plus another 740 000 € that we raise externally with a strategic partner to last until next summer. By then we expect to be able to carry our own costs.
Swedish tax deduction
*(In swedish only, regarding a swedish tax deduction on this investment). * Ett nytt så kallat investeraravdrag infördes den 1 december 2013. Det tillämpas på investeringar gjorda efter den 30 november 2013.
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From time to time the team working at FundedByMe invests privately in the companies before, during or after a crowdfunding on FundedByMe The CEO of FundedByMe, Daniel Daboczy is an early investor in this company.