Up Close with... MD Drinks Inc.
“Help fight hangovers and rid your lungs and sinuses of certain airborne pollutants using the ‘smog-scrubbing’ antioxidant NAC and natural anti-inflammatory prickly pear extract,” reads MD Drinks Inc.’s Function: Urban Detox. NAC, or N-acetyle-cysteine, might be a complicated ingredient to formulate into a drink and for consumers to understand its benefits, but Urban Detox delivers it with unique flavor combinations while educating consumers about it on its label.
The company understands that its consumers are looking to get more out of their beverages than hydration, says Dayton Miller, Redondo Beach, Calif.-based MD Drinks’ chairman and chief executive officer. “I think our product really resonates with active consumers who read labels,” he says. “People care about what ingredients they are putting into their bodies.”
Urban Detox launched as the first in the line of Function Drinks that now include all-natural varieties such as Light Weight, House Call, Brainiac, Shock Sports, Alternative Energy, Vacation, and now the new Night Life.
Dr. Alex Hughes, president and co-founder of MD Drinks, divides the products into “short-lead” or “long-lead” functionalities. The most exciting or edgy products have short-lead benefits, he says. For example, when people drink Urban Detox, they can feel better immediately. “If you prevent a hangover, that’s something you can take note of,” Hughes says.
On the other hand, Light Weight, which offers weight control assistance, is obviously a long-lead benefit, he says.
During medical school, Hughes was introduced to the world of pharmaceuticals and clinical nutrition as a way to treat patients. Hughes says he was amazed by the billions of dollars consumers were spending on remedies or herbal solutions when easily accessible, fairly economical functional ingredients were all around and largely unknown to consumers. He also understood the power beverages have in reaching a massive audience, and that beverages offered the best vehicle for releasing these functional ingredients to market.
With his interest in science and engineering and his degree in biomedical engineering, Hughes created Urban Detox in 2004 in a basic chemistry laboratory in his kitchen and developed manufacturing instructions that would be safe and efficient on a massive scale production level. Soon he moved to a larger lab and set up production in a pilot plant. By the fall of 2005, MD Drinks had launched Urban Detox in the Los Angeles area.
From the beginning, college friends Miller and Josh Simon, MD Drinks co-founder and head of marketing, joined Hughes, who divides his time equally between MD Drinks and the UCLA Medical Center as a chief resident of orthopedic surgery, in bringing the product to market. Miller, with a background in business and an MBA from Harvard Business School, oversees the day-to-day operations of the company and Simon, with a background as a film producer, offers marketing and creative insight.
MD Drinks began by using a self-distribution model â€” the team distributed Urban Detox in a bright orange van that read “Hung Over?” â€” and sales began to grow organically. By the summer of 2006, Function Drinks offered three varieties and was available in 150 accounts, which opened the door to the company’s first Southern California distributor. At the same time MD Drinks was adding distributors, it also was increasing its sales team and tweaking the products’ flavor profiles and packaging.
Function Drinks currently are available in about 20,000 locations nationwide, including Whole Foods Markets, Target, a portion of the Kroger grocery network and niche markets like Crunch gyms. California is still Function Drinks strongest market, but by the end of the year, the company hopes to have its sales pretty evenly dispersed, Miller says. MD Drinks operates with one overall head of sales, along with a head of sales for each the Western, Eastern and Central divisions.
Formula for growth
This year marks new flavor additions, a new launch and packaging changes to the Function Drinks line. In May, the company added two flavors: Urban Detox Goji Berry and Light Weight Blueberry Raspberry. Urban Detox also is available in Citrus Prickly Pear, and Light Weight additionally is offered in Acai Pomegranate and Pink Grapefruit.
“What we’ve done with Light Weight and Urban Detox is that a lot of people drink those and incorporate those into their everyday routine, so they might drink them all day long,” Hughes says. “When that happens, we feel it’s great to offer consumers another flavor option and that’s just what we did.”
This year, the company also changed its packaging to better suit its style and provide consumers with more information. Function Drinks’ bottle is now a custom version of Amcor’s panel-less PET bottle. “The bottle itself appears taller and has a harder shoulder,” Miller says. “It looks a little more serious, but still edgy and fun, and has a great modern look to it.”
The new bottle allows for a 1-inch taller label, which the company uses to call out specific functional ingredients in the drinks and accentuate the “Created by Physicians” tag on the label. The package’s cap also now features “Function: Created by Physicians,” which highlights one of Function Drinks key differentiators in the market, Miller says.
“We have complicated drinks with real science behind them, so we look at the label as really our billboard on the shelf to the consumer,” he adds.
Driven to keep innovating, this summer, MD Drinks will launch Function: Night Life Passionfruit Guava to help promote sexual health. Night Life’s proprietary, all-natural formula contains plant extract macuna pruriens and cnidium to help support “desire, reward, satisfaction and proper circulation,” the company says. The world of sexual health has many false promises, Hughes explains. For Night Life, he looked at the natural world for ingredients that are thought to create healthy circulation and dopamine levels. The beverage also contains 30 mg. of caffeine.
“What we did is take a step back and asked, ‘What is the No. 1 product that consumers are being duped by?’” Hughes says. “‘What do we feel we can do a lot better?’ … It’s for both men and women, and it takes a hard look at how we can use things clinically, and if we can apply those to an actual beverage.”
At the same time as improving Function Drink’s current platform, Hughes is also looking at new functionalities to see if he can formulate them into beverages. “With us, we don’t want to put anything out that isn’t innovative or better or a new angle on something,” he says. “And if it doesn’t have real efficacy or exciting science, then we certainly aren’t going to do it, no matter how exciting the marketing message might be.”