Tranquini, the premium natural relaxation drinks brand, is shaking up the UK beverage sector following its recent launch into the marketplace with its product range of global de-stress and active relaxation drinks. Entering the UK market at a time when its healthcare and wellbeing sector is currently valued at GBP180bn and forecasted to rapidly grow to GBP209bn in 2020, according to a recent report by Price Waterhouse Coopers, Tranquini is following the consumer trend which is leaning towards de-stress and relaxation beverages.
With its select blend of extracts Tranquini’s non-drowsy relaxation beverages are claimed to be particularly effective when there is a need to de-stress and focus.
The company believes that the products will resonate with the ‘millennial’ marketplace where Tranquini’s health-focused product development has really struck a chord with ‘the stressed generation’ driving the vast fortunes of the UK health and wellbeing sector.
The products and brand have been developed by a team with over 200 years’ experience at well-known global soft-drinks organisations, including Ahmed Elafifi, the company’s Founder. Before launching Tranquini, Austrian-Egyptian Elafifi spent more than a decade at Red Bull, driving the company’s growth, managing multi-national campaigns and serving as a key member of its Executive Board. Elafifi completed the global roll out of the Red Bull business and brand in 58 countries, growing its turnover from Euro40m to Euro800m. Billed as Tranquini’s Chief Relaxation Officer Elafifi was inspired to create Tranquini by perceiving a change in the beverages industry and a movement away from regular sugary soft drinks.
Here Ahmed Elafifi talks to Fruit Juice Focus about the development of the Tranquini brand and how he and his team believe that this new range of innovative drinks products will help with modern life stresses in a range of scenarios that require focus and a positive mindset.
Fruit Juice Focus (FJF): Can you tell us a about your background in the drinks industry and how did the idea for the Tranquini brand and the relaxation drinks products come about?
Ahmed Elafifi, Tranquini (AE): I started my career at Proctor & Gamble in Cairo 1991 followed by the Henkel group in 1992, responsible for brand management and sales. In the mid-nineties I moved to the beverages sector and to the Coca Cola company. In total I worked for more than eleven years in the Coke organisation. For the first part I was in central marketing, returning several years later to manage the very big and vibrant Coca Cola business in Poland where I was Chairman and Managing Director of the bottling plant managing over 3000 staff and revenues of Euro1bn. This was my last job before I founded Tranquini.
In-between my time with Coca Cola I spent seven years as the board member of Red Bull, I was tasked with managing very big promotional campaigns in the fastest growing markets for Red Bull like Japan, Russia and India. It was a really great and inspiring seven years. During this time my obsession of setting up my own private venture started.
For personal reasons I needed to stop the global travelling which was all part of the job with Red Bull at that time and settle down in one place for a while and gather my thoughts which is why I came back to Coca Cola Poland to manage the business there.
During this second spell at Coke I was involved in a major restructuring project and at that time I thought that I am not at all convinced that this is what I want to be doing working on such a difficult project as the restructuring program that involved making people redundant. I was not alone in this and I discovered that there were many colleagues and friends who were feeling the same. Then this whole notion of relax, and be positive started to take hold because we knew that relaxed people have the capacity to be positive and this results in good things happening to all of us. This led to the whole proposition of Tranquini and eventually I took the decision to quit after more than 25 years in a corporate career to start this venture and pursue this journey.
This was four and a half years ago. The first two years were all about set up – the creation of the proposition. What took the longest time was the creation of the formula for the drinks. We needed to create a formula which was all about the natural ingredients which had the efficacy and the functionality to deliver what we were after and at the same time can meet regulatory approval globally. This took us around two years to create the right ingredients for the drink itself and then two and a half years ago – specifically May 2015 – we started selling. And today we have Tranquini on the shelf in 39 countries around the world including Great Britain, Ireland, Austria, Germany, the Netherlands, Belgium, Monaco, Italy, Spain, Greece, South Africa, India, Egypt, UAE, Saudi Arabia, Hong Kong, Singapore and Canada.
Nothing happens on its own. It is people that make things happen and I was very fortunate to be able to attract a team of very high-profile beverage professionals. When I started out in the beginning I always thought ‘who in their right mind would leave such a senior well paid job within the security of a major company and join such a venture as Tranquini?’ But what happened was I found a lot of people who were ready to do the jump, to create something new, and today we have a team of 13 individuals, including myself, who have 200 years of premium beverage lifestyle brand experience. Colleagues who are very much there with me on our journey to create this new category of relaxation drink and to create this new global brand with Tranquini.
FJF: As the Founder of the company what different challenges have you faced as an entrepreneur working to establish a company and brand as opposed to those you encountered when working for the major drinks companies?
AE: These big corporations have unbelievable resources, tools and systems. You have access to masses of consumer and market data at your fingertips, and the whole company knows how to use this data and get the maximum intelligence out of it. And then suddenly you find yourself rewinding back to a place where everything is a completely blank sheet of paper and that’s it.
We were experiencing situations where someone would call me with an idea and the need to get some market analysis and I would say that’s great, but we don’t have any data, let’s create a report and start collecting this data now from scratch.
One of the biggest and most important changes is that I am now having to think of the company in terms of cash flow – it’s a completely different mind-set. I am always saying that we need lots of people from big corporations to join the company, but we have to educate them to think differently about the challenges we face in this start-up environment. It is almost like bringing in people who are football players and asking them to start playing tennis.
FJF: You are obviously coping with the stress quite well – presumably in part thanks to drinking your own products to help maintain a relaxed environment! What is your view on stress in the world today and how are people coping?
AE: Yes, exactly, but when you look at it the world today is so full of sources of stress. Stress on a macro level where you have the financial crisis and terrorism and there is also Trump. And on a micro level there is a lot of stress when it comes to family, work, relationships and money. Work is an unbelievable source of stress – tough negotiations, tough meetings and long hours. People when they want to make presentations or speeches they turn red, they start sweating and they get a knot in the stomach – these are symptoms of stress and anxiety attacks.
People are trying to deal with or manage this stress by taking drugs, alcohol or comfort eating or extreme exercise and activities, but the fact is there is no convenient innocent alternative to these unhealthy remedies today. And this is exactly what we are trying to change with Tranquini . To create something which is made of tea and herbal extracts that are very well known to calm you and to help you deal with your own stress and help to affect positively your mood. This is something that is in a can or a bottle that you can pick up and drink just before a tough meeting or tough negotiation and you can get this very natural product help to deal with your anxiety and manage your stress and relaxation and positivity.
FJF: You are positioning Tranquini in the growing healthcare and wellbeing sector. Do you see relaxation drinks as just another ‘fad’ amongst your target consumers or do you think it is here to stay?
AE: This is a very important point. when you look at the type of stress that we are facing right now it is not something that is expected to go away. Not with the technology as it is today that is making everything even faster, and the need to be connected all the time.
Even kids now – the teenagers – they are posting that they are completely stressed about whether they are getting five ‘likes’ or 50 ‘likes’. They are stressed about their schooling. People at work are stressed. Driving too is very stressful where you need to relax otherwise it can lead to road rage. There are so many sources of stress around us and the need for relaxation is so big that I think that this is something that is not only here to stay but will increase over the coming years.
When you look at other categories of beverages like energy drinks for example, they grew so fast at the end of the nineties/beginning of the two-thousands, engaging with the spirit of the times where people were saying ‘I want to work very hard, but I also want to play hard to compensate’. They were saying give me energy at any cost. The emergence of energy drinks was very much integral with that period and those drinks are still selling in large numbers today which is an indication of the potential growth for products like ours. Definitely not a ‘fad’.
The new focus today for people around the world is the interest in managing stress and to have a more balanced life between work and play. it is a very important topic now. People are no longer motivated by the approach of ‘I have to work 50-80 hours per week and my whole life only revolves around this ‘, they also want to do their hobbies. They want to have their partners, they want to live their life outside of work.
People are telling us now and telling the beverages sector overall that we need more natural, more healthy, less sugar based products and I think that by putting these two major insights together the need for relaxation and the need for natural and healthy drinks this is something that is here to stay. This is a trend that has attracted the consumer and the consumers are telling us they need this right now.
FJF: Do you have any competitors in the market yet? Companies looking to jump on the bandwagon having seen the success you are experiencing?
AE: There are a couple of examples here and there, but they are very small instances and they are just in one or two spaces in a couple of countries around the world, and do not pose any major form of threat at present. Actually, competition is something that we are looking forward to. The more brands that launch in the relaxation drinks space the more we will get help to educate and grow the category, which will be good for everyone.
FJF: Is the Tranquini brand making inroads into other countries and regions such as the US and continental Europe?
AE: For North America we started in Canada and we are in final preparations for the launch in the US. In continental Europe we are already in many countries – in Germany we are now starting to gain traction, in the UK we are now spreading into Northern Ireland. We are in Spain and then also Poland and Greece, so we are more or less in 15 to 18 countries in Europe when you add in the current launches. We have a presence in the middle east in Egypt and Saudi, UAE Kuwait, Oman, South Africa and we are also in Asia in Hong Kong and Singapore and Indonesia. So, as you can see from the countries I have mentioned we are trying to increase our foothold in different geographies from where we will roll out the brand.
FJF: Do you plan to launch more relaxation drinks products – particularly into the fruit juice sector?
AE: At the moment the decision is to maximise the current products we have and to make sure that the consumers can reach out and find the best format and solution for their relaxation needs. We have the three offerings that fit well within the beverage sector today, namely the functional beverages in cans and the value added flavoured waters and still drinks in bottles. We will watch the space to see what the consumer trends are in the juice sector and how we might introduce new variations of our drinks to meet any developments.
FJF: Can you tell us more about the ingredients used in the Tranquini drinks range?
AE: The Tranquini drinks products are created in two parts. Firstly, there is the combination of the green tea extracts which contain Theanine which helps increase mental focus and concentration and this is blended with other natural products such as Chamomile, Lavender and Lemon Balm to create the base for the drink. Secondly, we add in the other elements that are made of natural fruit and vegetable juices to create the colours and flavours.
We don’t need to use any preservatives as the cans are pasteurised and the bottles are asceptic. The sweeteners that we are using are sourced from natural fruit juice – in some cases they are made from fruit juice concentrate and in others it can be sourced from the sugar contained in the fruit. The level of sugar and sweeteners in these drinks compares well to other soft drinks which contain 14 grams per hundred millilitres whereas the Tranquini drinks have between two to five grams per hundred millilitres. A considerably lower level of calorie and sugar than other soft drinks.
All the ranges we produce contain fruit juice elements in various guises such as mixed berries in both the Sparkling and Still drink varieties. The Water+Juice drink range includes Passion Fruit, Cherry and Apple Cherry.
FJF: How is the company structured in terms of its management operation? And how do your production and distribution arrangements work?
AE: I have a management board made up of very high-level professionals all coming from the beverages industry from Coca Cola, Pepsi, Diageo, and other market leading companies and they are responsible for the marketing, sales and HR functions. The other partners are responsible for managing the business around the world.
For Europe and for North America we use a canning operation based in Austria and a bottling plant in Italy. We are working with two exceptional partners here. We also use production facilities based in India and Russia for distribution in their respective countries and a base in Singapore to supply the Asian region.
FJF: Are you able to divulge any details on volumes sold, turnover?
AE: Regretfully we cannot share this information with you, but we are off to a very good start in our first two and a half years, comparing well with other start-ups in beverages and we believe that we would be in the top range in terms of delivering good revenue numbers. Obviously, we are still a small venture and it is still early days but we are confident that we are on track both financially and organisationally.
FJF: What is the next phase of development in the Tranquini story?
AE: We have three very important directions we are spending the next three years working on. One is to oversee and complete the launch into almost forty countries, to expand into new countries and to consolidate our current position as the first global relaxation drink. The second part is to build an ‘innovation pipeline’ to help create this global brand we are aiming for. By this I mean we need to analyse in depth and work on products that will satisfy the very different geographic preferences, different tastes and different values across the global markets to get some really interesting ideas for new products. The third part is how to manage consumers’ perceptions of the relaxation lifestyle because when you see me drinking Tranquini, I want you to think that here is some guy who is living an active, positive and relaxed life style that you would like to join. For us this is an area where we are doing a lot of work to build the brand and the Tranquini lifestyle image.
FJF: What future trends do predict for the fruit juice industry?
AE: I am a very big believer in the fruit juice category. I have worked a great deal in this side of the business in my time especially with Coca Cola on fruit juices and a lot of big fruit juice brands. Consumers are telling us more and more now that they want to go into this ‘natural’ direction and I think there is nothing better than for the juice industry to address this need through their fruit juice products.
The issue I think is that the fruit juice industry really needs to listen more to consumers. To listen to their concerns about healthy, less sugary drinks and to react to that with new and more health based products. Of course, there is the orange juice commodity and the apple juice commodity which will always continue to be very big, but I think that the fruit juices are in my view missing out on the potential when it comes to innovation and to add value. I believe that for the more modern and more consumer connecting brands there is a huge opportunity and in a couple of years this will be the way to bring real growth into the fruit juice market