Ārepa co-founders Zachary Robinson (left) and Angus Brown (right).
Ārepa co-founders Zachary Robinson (left) and Angus Brown (right).
After running into regulatory hurdles late last year, beverage startup Ārepa has returned to the market with new pared-back labelling while simultaneously filing applications seeking to substantiate contested claims about its “brain drink”.
In November last year New Zealand Food Safety (NZFS) required Ārepa to publish notices stating some of the claims it was making about its products were “unsubstantiated”, marking the first public stumble for a drink-maker who had ridden a wave of positive media coverage since its founding in 2017 that had seen the company last year mull a $100 million capital raise to finance global expansion.
Following the notices, the company’s bottles featuring the contentious advertising suddenly were reduced to clear in supermarket aisles. Co-founder Angus Brown doesn’t shy away from describing how brutal the recent reality-check has been.
“It was really tough. You know, we probably lost about 25% of our revenue, but ultimately this whole experience has made us stronger... I think we’re going to take this on the chin, and we’re going to do what we believe is right and we’re going to keep boxing on,” he said.
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Fellow co-founder Zachary Robinson echoes the sentiment: “What we kind of learned is with our science comes responsibility. And it actually means we have more of a microscope on us. And so we have to act to the highest level throughout compliance.”
Ārepa is no longer publishing the NZFS notice on its website, and the regulator said the company had “worked closely with [NZFS] this year” as it signed off on new packaging and labeling expected to land on consumer shelves in the second half of this year. NZFS has required Ārepa to only make health claims related to its Vitamin C content.
In a statement this week the food regulator said while the requirement to publish the notice was no longer in force, it remained engaged with the company. “The investigation is not yet concluded,” NZFS said.
In an earlier response to an Official Information Act request, NZFS confirmed Ārepa had been on its radar for some years following no fewer than seven complaints about its marketing and ingredients from members of the public in Australia and New Zealand, and two from unspecified government agencies.
After weathering last year’s storm, and not wanting a repeat of the experience, Ārepa is now looking to square away its “brain-boosting” claims with regulators in advance of going to market.
This process, overseen by NZFS, requires applicants to submit a scientific dossier of evidence supporting their claims, which are then assessed by an expert panel.
Only 14 substantiated health claims for foods have been successfully filed by New Zealand companies in the past decade, mostly by large companies such as Fonterra and Zuru. Ārepa this week filed applications for seven concerning its ingredient L-theanine, making the case that it helped to manage stress and supported memory, clarity and calmness.
Ārepa declined, citing commercial sensitivity, to release their application and evidence underlying these claims, but said its case boiled down to 19 published studies.
NZFS said the process to evaluate such claims could take up to six months.
Ārepa's new, MPI-approved, packaging and labelling now includes an asterisk clearly specifying its claims concern only its Vitamin C content.
Brown is optimistic that securing an approved claim could give Ārepa an edge over competitors - such as that enjoyed by Mānuka honey or A2 Milk - but until this determination was reached his company would largely be in a holding pattern with the more ambitious face of its marketing campaign kept on ice.
“We’re pretty risk-averse after what happened last year. There’s not much point in making a song and dance about them [health claims] until we know that they’re absolutely locked away, and then we’ll roll that out to our packaging and marketing campaigns.”
The process had been illuminating, Brown said, with the company having previously banked on a pipeline of - mostly small-scale - academic studies to build evidence for its claims, but finding that these did not prove to be silver bullets against critics.
“These studies take so long to get published and get peer-reviewed, and even when you do it you realise you can’t use them within the Food Code. You can’t even really talk about it in great detail, which is unfortunate.”
But he said he was optimistic about the future. “Our business has taken a serious hit... But we’ll we’ll get through this year, and then hopefully a few things align, we might do a capital raise next year.”
* A previous version of this article incorrectly referred to New Zealand Food Safety as Food Standards NZ.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism - including twice being named Reporter of the Year - and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.
