Smart drink maker Ārepa breaks into Woolworths, fields Fonterra and Nestlé offers

Ārepa, a maker of blackcurrant and tree bark-based "brain drink" and "brain food" products, has won its second major supermarket deal across the Tasman.

Last year, the Auckland-based firm inked a deal with Coles. Now it is about to appear on the shelves in Woolworths.

"We've been growing a lot in Australia over the past year," co-founder and chief executive Angus Brown says.

"We're now in over 400 Coles sites. We've just landed Woolworths. So we'll be launching into around 350 Woolworths supermarkets nationwide in Australia in August."

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Ārepa has also broken into Harris Farms, a high-end Australian grocery chain, as well as around 200 independent retailers.

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"We think Australia could be a $20 million-plus market for us in the next few years," Brown says.

Including outlets in Singapore and various NZ supermarkets and service stations, Ārepa's drinks, capsules and powders are now in about 1500 outlets.

Along the way, it has become one of the largest buyers of New Zealand blackcurrants. It bought about 400 tonnes last year of a total 2000 tonnes. Ārepa's largest shareholder after Brown is an investment vehicle for the Stephens family , who grow blackcurrants in Leeston, Canterbury.

Big players circle

Ārepa's success has started to attract attention from multinationals.

"Companies like Fonterra want to collaborate with us and Coca-Cola tried to steal our chief science officer two days after we hired him," Brown says.

"And companies like Nestle are interested in the science that we're discovering. We're speaking directly with their head office in Switzerland and their head of neuroscience.

"That's a compliment and testament to the research that we've been doing with our team, but also it's a very dangerous type of conversation to have because you don't want to give away your IP too early too soon to what could be a competitor."

The approaches from the big players "comes from their interest to acquire us in two, three, five or 10 years. And when we first started this company, that was what we'd fantasise about."

Brown says a key Ārepa investor has helped him widen his ambition, even as he fields interest from multinationals. "Lain Jager, who ran a multi-billion dollar kiwifruit company in 60, markets - he's seeing the bigger picture. And so we don't really want to sell. We want to become the next Zespri, but bigger." Photo / Jamie Troughton

But the co-founder says he now has the "bigger plan" of becoming a billion-dollar company that retains New Zealand owership. He credits former Zespri chief executive Lain Jager - now an investor in Ārepa - with widening his ambitions.

The privately held company doesn't release detailed financials, but Brown says revenue has doubled each year over the past five years, and will reach around $10 million this year.

A $5m capital raise, now under way (after a $2m seed round last year), will be used for launch into the US.

Two North America-based Kiwis have been roped in for the coming US push.

One is the San Francisco-based Tim Brown (no relation), who's been tapped for advice on the American retail and e-commerce scene.

The other is New York-based Simon Endres - also an investor in Ārepa - whose studio Red Antler has done brand and design work for clients including Allbirds and Casper. Endres also had a hand in Ārepa's recent rebranding.

Ārepa products. Brown muses that if eventuates, a collab with Fonterra could result in the co-op producing "brain milk". Photo / File

After completing a BCom in accounting and finance at Victoria, Brown began his career as a sales manager for Frucor, pushing energy drinks.

It turned out to be something of a long dark night of the soul.

"Previous to that I'd lost a friend to mental health. And during my first year selling these energy drinks, I'd lost two grandparents to brain-related illness," Brown says.

One had dementia, the other a stroke.

"I was selling caffeine and sugar, which I knew wasn't good for people," he says.

"And so I started to think: why can't we develop something that's good for your brain?"

He took a business development manager role at The Foodbowl, an incubator run by the Callaghan Innovation-backed New Zealand Food Network - where he was also able to work on his concept for a smart drink company. He left to focus full-time on Ārepa in 2018.

Purple foods face-off

Brown's pitch is that his company's key ingredients of blackcurrants, pine-bark and l-theanine (an amino acid found in black tea) can help with mental alertness, boost immunity and, combined with lifestyle changes, lower the risk of dementia.

A double-blind assessment of Ārepa by four Auckland Unversity academics, involving members of the Auckland Warriors and published in March 2020, said results were promising and justified a larger-scale study.

And this year, Ārepa has been chosen as one of the subjects for a $700,000 study for Dementia Australia to be run by the University of Wollongong's Professor Karen Charlton, a nutritionist who will use blood samples and biomarkers as Ārepa's powder is pitted against a normal diet, plus one rich in purple foods (the academic's specialty). It kicks off this month. Brown says his company's product was selected for the Dementia Australia trial and has not contributed to any funding.

Ārepa cofounder Angus Brown says his firm has recently fielded interest from multinationals including Fonterra and Nestle. Photo / Dean Purcell

Some high-profile customers are already convinced, including the All Blacks.

Brown says his firm has no kind of sponsorship arrangements with the ABs; they've just chosen to buy his product.

While it's great to have such a marquee customer, Brown says it has unusual complications.

"We have to fly samples over to the UK every time they buy some, and have it batch-tested by a World Anti-Doping Agency certified authority, Informed Sport," Brown says.

Covid ups and downs

The pandemic has introduced challenges.

"Shipping and logistics and bringing glass packaging from overseas had a lot of delays and that's caused us to short-supply a number of these big customers like Cole's - and if you get that wrong, you know, you are at risk of being delisted," Browns says.

But in the event, Ārepa has managed to expand its business in Aussie supermarkets, with its co-founder putting down to it being a fast seller.

At the same time, the firm's online sales have more than doubled since the initial outbreak in March 2020, and now account for around a third of sales and Ārepa has benefited from a greater emphasis on health and wellness, Brown says.