DISCUSSION FORUM 6
The Anti-Energy Drink
by Sheila Shayon
“Dream Water is the world’s WORST energy drink.” That’s the pitch from two entrepreneurs David Lekach, CEO, and Adam Platzner, Partner & CMO who are disintermediating the sleep aid category with their product.
If you are one of the 50-70 million Americans who suffer from sleep disorders, help is here. Dream Water is an all-natural, non-caloric product made from GABA (Gamma-Aminobutyric Acid) for relaxation, Melatonin to help induce sleep, and 5-htp (Tryptophan) to improve the quality of sleep. It takes effect 20 to 40 minutes after consumption on average, and unlike many OTC and prescription sleep aids on the market, it’s non-addictive and has no side effects or morning grogginess. Functional beverages sales are in the tens of billions of dollars annually in the United States and pharma sleep aids are in the multiple billions says Lekach. For OTC sleep aids alone, Packaged Facts expects the total market to near the $759 million mark by 2013.
Produced by Dream Products, LLC, Dream Water is available as an 8 oz. bottle in “I Dream of Kiwi… and Plum” and “Lullaby Lemon w/ hints of tea” flavors, or a concentrated 2.5 oz. shot “Lullaby Lemon w/ hints of tea” and “Snoozeberry” (blueberry and pomegranate flavors).
Their first retail partnership in 2009 was with Duane Reade in New York and was publicized as Dream Water Puts the ‘City That Never Sleeps’ to Bed. “Duane Reade prides itself on supporting the launch of innovative products that clearly fulfill the needs of our customers,” said Joe Magnacca, SVP and chief merchandising officer of Duane Reade. “Dream Water is just such a product and we welcome them to our stores.” Now available at Walmart, Walgreens, Paradies Shops (airport retailer) and other stores, the product has distribution in over 10,000 doors nationwide.
We are a nation besieged by insomnia:
• Annual cost for treatment of insomnia estimated at $10.9 billion
• Individuals sleeping fewer than six hours each night had a 70% higher mortality rate than those that slept seven or eight hours a night
• 40% of insomniacs reported the use of either over-the-counter medications or alcohol in an inappropriate attempt to alleviate their sleep problems
• Insomnia may be 40% or higher for women over the age of 40
• From age of 16 to 50, men lose about 80% of their deep sleep.
• 15% of elderly people stay in only stage 1 or light sleep.
[Source: the National Commission on Sleep Disorders Research report to Congress, Wake up America: A National Sleep Alert] It’s widely-known by now that disengaging from all electronics at least an hour before a consistent bedtime, warm milk, and moderate exercise, may help counteract insomnia, but Dream Water is a near guarantee. There are caveats: people under the age of 18, pregnant or nursing women, those taking other medication – should consult a doctor before imbibing; not recommended to drink more than 1 serving in a 24-hour period. BC spoke with Lekach and Platzner about their dream product.
BC: Why are you marketing Dream Water as a “sleep enhancer” and not a beverage?
DW: A key differentiator between our product and others in the marketplace is that Dream Water is a liquid dietary supplement (much like 5-Hour Energy or other functional shots) that is positioned as a mainstream sleep enhancer that delivers natural sleep ingredients in a liquid form. We find that the growth in the functional beverage category reflects consumer demand for liquids more and more as a preferred delivery method for the helpful or necessary vitamins and supplements that can help the consumer achieve a healthier lifestyle. Our goal is to merchandise Dream Water in the sleep aid aisle, because that is where consumers shop for their sleep solutions. That said, as proper merchandising at the point of sale marketing is critical in communicating the product’s proposition to its potential consumer, we do believe in merchandising our product at key ancillary locations at the front of the store (near to the register) in order to establish Dream Water as a more mainstream product; one that is the exact opposite of an energy shot.
Can the packaging be greener?
We applaud all manufacturers who use very “green” packaging in their product designs. We hot fill our shots (don’t use preservatives) and we have worked within the materials mix available to us at this moment to make the best possible 0-calorie natural sleep enhancer. On the bottle itself it says “Please Recycle. Pretty Please.” and we are always looking at ways to continue to encourage sustainability.
Any celebrity endorsements?
Paris Hilton as well as several other celebrities, including Sofia Vergara, have started to tweet about our product. Paris has said that Dream Water is tremendously helpful for her. So she tweeted about Dream Water last month saying “Going to bed. Just had some dream water”. It really works. Already feeling sleepy. Sweet dreams everyone.” What was great about this tweet in particular was that she was going to sleep at around 8am EST and didn’t tweet again as a result for the whole day, lending authenticity to the communication to her followers.
QUESTIONS FOR DISCUSSION:
1. Define and explain for Dream Water: Core Product, Actual Product, and Augmented Product. (Ref: Slides 3 to 8).
2. Which factors could affect Dream Water’s adoption? Why? (Ref: slides 17 to 21. You can use factors in slide 21 as your framework ).