Blue Cow
Location:
San Pedro
Founded:
2005
Core Business:
Marketing a beverage designed to relax consumers
Employees in 2006:
4
Employees in 2007:
11
Goal:
To create awareness of the product and secure nationwide distribution deals
Driving Force:
Growing market among
consumers for ‘functional drinks’ that provide more than thirst-quenching
Red Bull’s ad campaigns claim that the popular energy drink will give you wings. Now, a new “relaxation drink” called Blue Cow wants to give you landing gear.
George Smart, the owner and founder of Blue Cow, said that he intends to capture a share of the $5 billion energy drink industry or create a new niche with a product that has essentially the opposite effect.
“I thought, ‘Red Bull made energy drinks hot. What if Blue Cow starts the relaxation drink trend?'” said Smart. “Red Bull showed you can take a market niche and exploit it. More people are stressed and want relaxation than want energy.”
Smart said that the drink a clear, lemon-flavored beverage with a calming amino acid in it can help people relax when they are feeling stressed without making them tired or groggy. Airline travelers could drink it to calm their nerves, he said, as could stressed commuters and employees. Golfers might drink it to aid their concentration.
Whether or not there is a significant market for a relaxation drink should become clear relatively soon. San Pedro-based Blue Cow has secured its first distribution deal with City of Industry-based Haralambos, which has worked with other drink companies including VitaminWater and Clearly Canadian. Blue Cow is available in about 140 Albertsons in Southern California and Las Vegas, all Gelson’s stores, Ralphs, Jensens and a growing number of quick-stop outlets like 7-Eleven and AM/PMs in Los Angeles. The company also has pending deals with Von’s and Stater Bros.
But the drink will have to deliver if it is going to succeed, according to an industry insider.
“It has to work,” said Gary Hemphill, managing director of New York-based Beverage Marketing Corp. “People are willing to try new products. That’s pretty obvious. But the question is, are they going to buy it again and again? I think consumers have fairly high expectations for their products.”
Personal inspiration
Smart’s inspiration for Blue Cow grew out of a rocky point in his personal life. He retired from his career as a vice president of finance at the milk product company Carnation in 1984 at the age of 40.
But when his marriage fell apart in the 1990s, he lost much of his fortune to his ex-wife and was forced to move from a multimillion-dollar home into a van.
“I couldn’t sleep when I was living in my van,” he said, “and all that was out there to help was sleep teas. So I decided to make my own products to help me sleep.”
He began creating sleep-inducing products including sleep water, sleep cookies, bars, lozenges, and scents. In the early 2000s when Smart said he became financially viable again, he began developing a prototype store to carry all of his sleep products and started a company called SleepCo.
It was during that period that he learned from a friend about an amino acid in green tea called L-theanine, which has in some studies been shown to aid relaxation in the human body 30 to 40 minutes after it is ingested.
Smart decided to make a relaxation drink which became Blue Cow that he figured would have more widespread market potential than his other sleep-inducing products. One bottle of Blue Cow contains as much L-theanine as 40 cups of green tea, Smart said.
Convinced the drink would fly and back on solid financial ground after a series of real estate investments, Smart used $1.6 million of his money to get the company off the ground in 2005. Blue Cow flew through the FDA approval process because L-theanine had already been approved for use in pill form, he said.
“Food scientists that used to work for Nestle made the product,” said Smart. “We made the least-disliked flavor we could, but we’re not selling it for flavor.”
The drink, which goes for about $2 a bottle comparable to the price of a can of Red Bull is safe for consumption by adults and children without any noticeable negative side affects, Smart said.
Challenges loom
Still, consultant Hemphill sees some basic challenges for Blue Cow.
“I think that the success of energy drinks has essentially proven that consumers are open to buying beverages that provide them with functional benefits,” he said. “The challenge for Blue Cow will be communicating what the product does in a simple message. And when they do, the question is: Is there a need for it?”
Smart and Blue Cow aren’t letting convention hamstring their marketing efforts.
Smart has a few life-size cow sculptures that he’s painted blue. It serves as the company mascot and is rolled out for store displays.
He drives a car with a smaller version of the blue cow on the roof, and is planning to hire other drivers willing to put cow signs on their vehicles. He’s talking with cab companies, too.
“We are also going to do billboards and radio pretty soon,” Smart added.
National and even international expansion is a long-term goal, said Smart. He would like to stretch out first to Boston or Connecticut and then to the Midwest. He’s looking for outside investors to help him market the product.
Smart knows that the key will be proving there is a market for a relaxation drink. But the Blue Cow founder is approaching the question with, well, a sense of calm.
“The bottom line is that it works,” he said.
