FEATURE-Relaxation drinks see energetic growth in U.S.

Wed Jul 20, 2011 2:59am IST

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* Beverage industry making room for relaxation drinks

* Relaxation drinks niche complements energy drinks

* Some brands contain melatonin, but have no alcohol

* Trend started in Japan

By Eunju Lie

CHICAGO, July 19 (Reuters) - People have been guzzling energy drinks for the last 10 years -- maybe it's time to relax.

Sales of "relaxation drinks" with names like Vacation in a Bottle, Dream Water and Just Chill, while small, are growing.

"There is clear potential for further growth in the coming years," said Cecilia Martinez, market analyst at UK-based beverage research group Zenith International.

Relaxation drinks help the body chill out by relieving muscle tension and reducing levels of cortisone, the main stress hormone, according to a report that Martinez wrote about the drinks earlier this year.

The drinks, which evolved in Japan as far back as 2005, contain no alcohol but some have melatonin, a hormone that can cause drowsiness.

The biggest relaxation brands include Innovative Beverage Group's (IBGH.PK) Drank, Purple Stuff and Jones GABA. Another called Slow Cow is up and coming. Their names provide a marked contrast to engine-revving energy drinks such as Red Bull, Hansen Natural's HANS.O Monster and Dr Pepper Snapple Group's (DPS.N) Venom Energy.

Some 22.4 million cases, or 127 million liters (36 million gallons) of relaxation drinks were sold in 2010, double the amount sold in 2008. By 2014, U.S. volume sales will exceed 300 million liters (79 million gallons), Martinez said.

That is well below the 1.35 billion liters (357 million gallons) of energy drinks sold in 2009 alone, according to Zenith.

"Consumption trends of America show that Americans are always willing to try out new things -- relaxation drinks might be one of those things," said NPD Group Food & Beverage analyst Darren Seifer.

Carbonated soft drinks -- or "sodas" to most people in the United States -- far outsold the other drinks, with 9.36 billion cases moving in 2010.

Yet growing health consciousness has led many people to reach for drinks they consider healthier, like juices and waters. Many of these drinks claim to boost energy, metabolism and the ability to relax.

As a result, smaller niches are set to gain greater share over the next ten years, according to Seifer, especially as carbonated drink sales fall.

"Relaxation drinks could bring new life into beverages," said Seifer.

The main ingredients are melatonin, a hormone that is intended to induce drowsiness; L-theanine, an amino acid primarily found in green tea; GABA, a chemical that calms the mind; B vitamins, and chamomile -- a plant that often winds up as tea that people drink to help them unwind.

"It gives me a chance to relax from a hard day of work without using something that might land me in jail," said relaxation drinks consumer Marcus Brook, a Facebook fan of the Drank drink line.

For Denise Ivy, also on Facebook, the drinks helped her cope with the closing of two family businesses: "If it were not for Drank, we would have not gotten any sleep for several weeks."

Nonetheless, the Zenith report says levels of ingredients in the drinks may be too small to be effective. To move beyond the next 10 years, companies that make the drinks must prove that they do what they say they do, according to Morningstar analyst Philip Gorham.

"If the consumer doesn't feel the effect, then sales would drop off," said Gorham. (Editing by Matthew Lewis and Robert MacMillan)

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