Straight out of university, Angus Brown got a job selling energy drinks – a plum job for a commerce graduate with ambitions for a bright career. But flogging high-sugar drinks didn’t give Angus a spark of joy. And he set off on a different toward making an energy drink that’s actually good for you. Or specifically your brain. The result is Arepa, a blackcurrent based nootropic drink that’s backed by science and is so successful he’s hoping to raise $5m for the next phase of growth in Australia and beyond. He chatted to Vincent Heeringa.
Vincent: Angus, congratulations on the success so far, and it’s so successful. I believe that you’re doing a fundraising round. You’re hoping to raise the thick end of 5 million bucks.
Angus: Yeah, around about that. And essentially it’s to help us with continuing our expansion in Australia and seeding the US later on, this year or early next, and then just continue the deep research programs that we have underway showing how our formula can enhance mental performance under different types of pressure and stress while being good for the brain and helping to delay the onset of neurological decline.
VH: It sounds like you’ll need it for those fundraising. Raising money is hard. What’s the process? Is there a particular approach that you’re taking?
Angus: We have been talking about raising money for quite some time, probably almost over a year. Just before COVID kicked in our plan was to fly over to the states and pitch at this big food and investor summit, and essentially raise money to launch into the US. Then obviously the world turned on its head and COVID kicked in. So we did that remotely and. But we also thought, why the hell should we be raising money right now to launch into a market that is essentially in a state of flux. And so we thought that it’s probably not a good idea, so let’s just look at what we can do and can’t control.
And so we went quite lean and, and quite capital efficient, and went from running a small loss each month, as you do in a startup, to turning a small profit. And it was really just focusing heavily on growing our online world, both in New Zealand and then online in Australia, launching into Coles in Australia, just focusing on getting our backyard sorted first before we hit the ground running in the US.
Over that time we’ve been speaking to a bunch of venture capital funds, high net worth individuals that have experience in international food and beverage expansion, as well as some of the biggest food and beverage companies on this planet, their venture arms, and just getting a gauge of the level of interest from the investment community about our type of company. And that’s been met with a lot of interest actually. We’re now in a reasonably fortunate position, without sounding too cocky, money is almost not the problem. Our problem now is to try and figure out who the best set of investors are for us to bring on in order for us to achieve our goals.
VH: What a lovely problem to have.
Angus: Yeah, I call it a premium problem.
VH: That interest that you’re getting from the venture capital community, it kind of reflects where food investment is right now. It seems very hot, every week I get another example coming across my path of a New Zealand company that’s been funded, and quite well. Are you finding the VC space especially hot for food right now?
Angus: Yeah, I think the VC space has realised that at the end of the day, everyone’s still gonna need to eat. Health is really important to people and there’s this massive shift towards food and beverage products that have a better for people, better for the planet drive to them such as the whole plant-based meat space. And so it’s really exciting. It’s good to see that the venture community has finally caught on to, I guess what we and my peers and the food and beverage industry have been looking at working on for the past, you know, 10 years.
VH: And in fact New Zealand seems well positioned to deliver to some of that expectation around health sustainability, authentic supply chains, regenerative, growing, and so do you think that there’s a New Zealand Inc halo that goes around Arepa?
Angus: We’d like to think so. So we use plant ingredients that are special to New Zealand, a unique variety of black currant that’s only available here in New Zealand and then New Zealand pine bark extract, although Pinus radiata came from north America, I think, New Zealand happens to be the best at growing it.
VH: We’ve made it our own haven’t we.
Angus: We have, yeah, so they grow like three times faster here than they do in Canada and the compounds in the bark are really quite potent. They are a sort of polyphenols, called oligo proanthocyanidins that are used as a natural alternative to ritalin for ADD children. But I think because of how New Zealand has tackled COVID and even when the terrorist attack happened to Christchurch, we were kind of propelled onto the world stage a bit further, and then how we’ve tackled COVID has put New Zealand in the limelight. And then the underlying reputation that we have internationally for having this clean, green element, although that needs to be worked on, I believe, puts us in a good space. But New Zealand as a whole, you know, we produce some of the most bioactive, supercharged fruits and vegetables on this planet.
We have a really high level of exposure to UV light here in our country and that’s beneficial towards growing really nutrient dense fruits and vegetables and obviously our climate and soil affects that as well. And then we actually punch well above our weight and the space of food technology. And there has been a big shift over the past 20 years in New Zealand, moving away from selling commodities and looking more towards doing high value food and beverage products and adding the value as much as possible here in New Zealand, so that we capture that before we export it.
And that’s what we are trying to do with Arepa is throughout our value chain, selecting really interesting compounds, use food technology to put them into accessible food and beverage products and then use neuroscience to formulate it but then also clinically prove it. And that means that we are selling a product that is a very high value beverage or powder. We can still sell it at a good solid rate, but the value that’s created there is a lot higher instead of, you know, just cheap sodas. We’re essentially creating something that has a much, much higher value because of the science and the efficacy and everyone can win along their value chain.
VH: Yeah. I mean, you’ve really crossed two categories, haven’t you? It’s a beverage which tastes delightful. But you’re also heading into that nutraceutical, therapeutic kind of space. So do you find yourself getting the best of both or can you fall between the cracks, neither a medicine nor a drink, or is up to the best of both?
Angus: We would like to think the best of both, although we’re no way near the therapeutic space yet in terms of our supply chains and delivering to hospitals for a therapeutic purpose. We deliver to hospitals and we sell a lot through hospitals, but it’s to the cafes or the busy doctors and nurses who are all stressed and needing to perform mentally. Our science is still quite still quite early in the sense that the work that we’ve done to date that’s published is really around our finished formula, you know, accuracy and reaction speed and cognition and physically fatigued subjects. But what we are doing this year is committing a substantial amount of money to a $1.7 million clinical study showing the therapeutic benefits of our product towards delaying the onset of neurological decline and supporting the brain or protecting the brain from, from, the onset of, um, of any kind of future brain disorders.
VH: Who’s running that research program? Would you need to be independent for it to be credible?
Angus: Yes, absolutely. So, uh, so it’s with plant and food research, our crown research body. I call them the men and black of plant science in New Zealand. We were working with them and then we have a whole bunch of scientists that are around the world or contributing to the study through a number of different universities. And then from our side professor Andrew Scully, who’s the center director of human psychopharmacology at Swinburne university in Melbourne, and also an adjunct professor of neuroscience at Monash. He’s come on board as our chief science advisor, and he’s helping us to design the study and oversee how the trial design has been done so that we find what we’re looking for. And we think what’s in our formula is really potent and kind of matching, from a efficacy perspective, some of the leading anti-depression anti Parkinson’s medications.
VH: There’s a moment we use sort of crossover from claims about health, to claims about therapy. That threshold is expensive, you know, you start heating into the world of pharmaceuticals. How far down that line do you have to go to be credible with your claims?
Angus: It depends on what we want to say on the pack versus what we want to show with the science, and then let the consumers and practitioners make their own minds up. We want this to be scalable and accessible for the world. And so we’ve created a, you know, a premium beverage on one side, but we’ve also created a smoothie powder that costs less than $2 a day for a serving. And that’s designed for the likes of consumers who are one in six worldwide, essentially suffering from a neurological concern. And that might be anxiety or concussion recovery, or depression, parkinsons, dementia. And one in six worldwide have a cognitive problem and are looking for nutrition solutions to help them on a daily basis. And pharmacy has continued to fail because essentially pharmacy only really targets the neuro-transmitter element to what’s wrong with your brain, but there’s like 10 other elements that actually contribute to cognitive function.
We don’t want to kind of tear this off and have it classed as a pharmaceutical because I think that would scare you know, normal people off. And it would shift us away from being available in the supermarket to being available, you know, only being available in pharmacies. We want this to be found in supermarkets worldwide. And like how kiwifruit is perceived as a healthy fruit for gut health, we want our range of added products to be perceived as brain food. And so it’s food first and foremost.
VH: Thanks Angus and good luck!
This is an edited version of the podcast interview. Listen to the full interview here!