Business Hub: Kiwi smart drink maker Ārepa signs Coles deal, hires heavy-hitter

Auckland-based smart drink maker Ārepa is looking to raise $5 million on the back of a deal with Coles Supermarkets in Australia.

Founder and chief executive Angus Brown says the Coles deal will help his profit-making company boost revenue from $2m last year to around $6m this year.

After Ārepa raises capital, in two to three months’ time, it will use the funds for further international expansion, Brown says.

Ārepa can count the All Blacks among its customers. It’s not a sponsorship arrangement. Various members of the team just choose to drink it because they think it’s good.

Brown says he’s fielding more international inquiries following the Coles deal which “will double our revenue overnight”.

His outlook on the beverage industry wasn’t always so bright.

“I come out of university and my first job [in 2011] was selling energy drinks,” Brown says.

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.

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

He put his idea to his employer, but there was no interest.

After just over a year, he decamped to the NZ Food Innovation Network’s Foodbowl – a research and development-cum-business incubator for the food and beverage industry in industrial Mangere, backed by Crown agency Callaghan Innovation.

Brown worked days as Foodbowl’s business development manager, while in his spare time taking advantage of its facilities and advisers to develop his own “nootropic” or smart drink product, Ārepa – which would be later joined by power, capsule and freeze-dried berry supplements.

The young entrepreneur had a broad idea of ingredients he wanted to use, including blackcurrants after Crown Research Institute Rangahau Ahumāra Kai (Plant & Food Research) highlighted a study that found “compounds found in New Zealand blackcurrants increased mental performance indicators, such as accuracy, attention and mood” and “could have potential in managing the mental decline associated with aging populations, or helping people with brain disorders such as Parkinson’s disease or depression”.

And pine-bark extract was also on his radar as a healthier alertness and pick-me-up alternative to caffeine.

But with a degree in accounting and finance, and a career in sales, Brown wasn’t equipped to formulate a recipe. For that, he forked over an Auckland house deposit-sized sum to a world-renowned expert – Professor Andrew Scholey, director of the Centre for Human Psychopharmacology at Melbourne’s Swinburne University.

Scholey has advised the UK and Canadian governments on health policy. He’s also had more than 250 research papers published and received more than $25m in research funding.

The Herald found the beverage brewed from Scholey’s recipe perfectly quaffable – like the once-ubiquitous Ribena with milder natural sweeteners rather than the 70s staple of overwhelming sugar. A three-pack costs $17.99.

A jar of Nuroberry or freeze-dried blackcurrants ($41.95) proved harder going in themselves, with a sour dry nature that one NZME staffer quipped had in fact induced depression but go well with smoothies or yoghurt and muesli. Ārepa also pitches them as an ingredient for “raw baking”, if that’s your bag.

Brown left the Foodbowl to devote all his time to Ārepa in 2018.

He says since then the company has spent some $700,000 on research and development.

And the CEO is also on a constant mission to bolster his company’s “neuroscience, not pseudo-science” tagline.

April saw the publication of a study by four Auckland University academics, who assessed the impact of Ārepa on various members of the Vodafone Warriors in adouble-blind, controlled trial that saw some players receive a placebo.

They found, “This small scale, short-term study resulted in a significant increase in cognitive function scores of rugby league players after one week of BC+ supplementation [BC+ being the researcher’s shorthand for Ārepa’s key ingredients of blackcurrant, pine-bark and l-theanine – an amino acid found in black tea]. These promising results suggests BC+ supplementation in a sporting setting may be beneficial. This study justifies the need for a longer-term, larger-scale, and more sensitive investigation.”

And more investigation there shall be.

Scholey has just returned his focus to the Kiwi startup, this time in a consulting role that will see him advise on R&D.

Over the next year, Ārepa plans to spend $3m supporting clinical research, overseen by Scholey, that will tackle questions around how food can enhance and protect the brain, including from mental illnesses such as depression and anxiety.

A key point of interest is whether Ārepa can claim that its products inhibit the MAO (monoamine oxidase) enzymes associated with depression and the onset of Parkinson’s Disease. There are MAO-B inhibitor drugs today that are used as antidepressants or to slow the onset of dementia, but Brown is looking for evidence to sustain the claim his company’s products can achieve the same effects naturally, without the nasty side effects that can accompany the pharmaceutical alternative.

Scholey told the Herald that results from earlier studies have opened the possibility that could be the case.

It could prove a health breakthrough and, of course, a business breakthrough if stressed white-collar workers and flagging sportspeople everywhere start to reach for an Ārepa rather than a Red Bull.

“We want to be New Zealand’s next high-value food and beverage export – like Rockit Apple is right now or Comvita was in its heyday,” Brown says.

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