Alex Hughes is standing in an aisle of the Whole Foods on Bowery, staring at a cooler, watching his drinks occupy New York real estate. A handsome 31-year-old with a square jaw and a redhead’s complexion, Hughes is co-founder and president of Function Drinks, a newcomer to the health-drinks market. Hughes is also a doctor; in fact, he was recently chief resident of orthopedic surgery at the UCLA Medical Center, and last month he started a yearlong fellowship at the Hospital for Special Surgery in Manhattan. He hadn’t neglected to mention his medical career to the buyers at Whole Foods when, last year, they agreed to provide Function with national shelf space.
Now Hughes takes in the full display. Function makes eleven drinks, each a different color and flavor, each claiming to address one health issue or another: fatigue, stress, a hangover. He’s pleased with what he sees, as getting Function into Whole Foods was something of a coup. The next step is to win territory in street-corner bodegas. About 4,000 New York stores now carry the drink, and Hughes hopes to get that number up to 10,000 by the end of the year. So he leaves Whole Foods with Josh Simon, Function’s marketing man and co-founder, and Bob Miller, executive vice-president of sales, to make a few house calls.
They drive down Broadway to Prince. First stop is Dean & DeLuca, the type of upscale market Function depends on. But after a quick scan of the beverage refrigerator, Hughes sees that the store lacks even a single Function drink.
“Hey,” Hughes calls to a white-smocked employee. “Do you guys carry Function?”
“We did … ”
“Where was it when you had it?” Hughes asks.
The employee points to a low shelf in the refrigerator occupied by Liv sports drinks. “Liv went away when Function came in. But maybe it wasn’t selling that well. Then Liv came back.”
Hughes asks for the name of the store’s buyer and takes down his number on the back of a business card. His face has darkened. He strides outside and begins placing calls to his salesmen.
“He gets like this,” Simon says. “He takes it personally.”
Miller has taken the car around the block, and when he pulls up to the curb, Simon and Hughes step in, Hughes still on the phone.
“We need to get back in that account,” Hughes says when he disconnects.
“We’ll sort it out,” Miller says.
Miller finds parking outside the Morton Williams at Bleecker and LaGuardia. There are just a few bottles of Function in the open-air cooler at the back of the store, lined up beside row upon rainbow row of Snapple and Vitaminwater. Hughes takes his cell phone out of his pocket, then puts it back. Realistically, there is not much a salesman can do to force more bottles onto the shelf until the drinks prove themselves. But if the bottles don’t have a presence, they’ll never sell.
They continue on foot. In a bodega near Washington Place and Sixth Avenue, Hughes starts to push bottles of Cytomax (an energy drink geared to athletes) into the back of the cooler to make room for another row of his drinks.
There is a logic, or at least a psychology, to staging bottles in the refrigerator. Eye level is ideal; otherwise, Function likes to be above its competitors, to allude to the term top-shelf. The company tries to situate the best-selling flavor nearest the refrigerator handle, easiest to grab. In a bodega like this one, Function will spotlight Urban Detox, a bright-orange beverage alleged to help mitigate hangovers. It’s the brand’s strongest product, and a good impulse purchase for a customer who might be out drinking. (In grocery stores, where customers are more often female, and concerned about health, Function might lead with its Light Weight line.)
By the time the bodega manager spots Hughes, he has finished cramming Function bottles into the extra rows and is rotating them so the labels face perfectly forward.
“Hey, c’mon, guys,” says the manager. “I need the space.”
Hughes freezes, mutters an apology over his shoulder, and then begins to undo his rearrangement. “It’s like an addiction,” he says sheepishly as we walk out the door. “Every time I see one, I have to touch it, even if it’s just to change the facing.” We head down Sixth Avenue, and at a market on West 4th Street, he buys three dented bottles to clear them from the shelf.
Function Drinks was born at the end of a particularly boozy night in 2004 at the Los Angeles house Hughes and Simon shared. They had gathered around their built-in bar with their friend Dayton Miller (no relation to Bob), and somebody—details are fuzzy—came up with the idea of making a drink that relieves hangovers. These were probably not the first inebriated entrepreneurs to stumble upon that idea. But then Hughes piped up. “Actually, guys, I’ve been doing a lot of thinking, and with all the dietary-supplement deregulation that’s happened, I think there’s a great opportunity for a drink here.”
Hughes knew that in the modern American market, the mere suggestion of a functional beverage was enough to sell product. As an undergraduate at Vanderbilt, he had met the son of Tom Schwalm, who had co-founded what would become SoBe beverages in 1995. SoBe had tweaked the healthful-noncarbonated-beverage concept by marketing an iced tea infused with herbs, and had designed its packaging to communicate a vague aura of energizing healthfulness. Two years after it appeared on the shelf, analysts were estimating annual sales at about $65 million.
SoBe, Snapple, and AriZona Iced Tea all rode the first wave of non-cola-beverage sales, and Vitaminwater’s launch in 2000 pushed the trend to its logical extreme: not soda, not juice, not tea—just water. But good for you! Anyone who cared to read a Vitaminwater label could see that most flavors contain about 32 grams of sugar per twenty-ounce bottle—only seven grams less than a twelve-ounce can of Coke, and the maximum daily limit of added sugar recommended by the government in the 2005 Dietary Guidelines. But as Gerry Khermouch, editor of Beverage Business Insights, points out, Vitaminwater perfected the art of guilt-assuagement. “They’re indulging the consumer’s sweet tooth, and offering them psychological cover for drinking sugar water.”
The instant success of Vitaminwater created an opportunity for anyone hoping to market a healthy-looking drink. But Hughes didn’t approach his product cynically. In 1994, Congress had demanded that the FDA relax its standards for regulating dietary supplements, some of which might enhance body functions and mitigate health problems. Hughes studied scientific papers online while on call at the UCLA hospital, and he paid attention when doctors recommended soy phosphatidylserine as a brain booster to fight dementia, or spoke about how the amino acid N-acetylcysteine could protect the kidney and liver from damage. On his off hours, he would mix N-acetylcysteine with other natural additives like prickly-pear extract, which has been said to reduce hangover symptoms, in an effort to create the first truly effective morning-after drink.
“I just started messing around in the kitchen–slash–lab–slash–meth lab,” he says. He made syrups and emulsions, trying to find a way to keep the N-acetylcysteine from oxidizing. He’d be up late at night cooking and leave the kitchen cluttered with beakers and pans caked with melted sugar. Once, the mixture fermented and a pair of bottles exploded, burying glass shards in the walls.
By 2004, Hughes had developed Urban Detox, and early the next year he and his partners found a factory in Los Angeles to make 5,000 cases. At first, they sold from an old orange van with HUNGOVER? painted on the side. The brand grew quickly over the course of Hughes’s surgical residency. By the end of 2005, when Function sold $400,000 worth of drinks, they traded the van for contracts with distributors. In 2006, Function raised more money, and revenues leaped to $5 million. Last year’s sales reached $10 million, and that figure is expected to double this year.
Function’s growth trajectory is similar to that of other drinks in the sector, but the company is still tiny. Industry insiders say Function’s most likely endgame will be to sell the brand to one of the beverage giants. “But the deciding factor,” said Barry Nathanson, publisher of Beverage Spectrum, “is going to be if they can get the message through that Function, in fact, really functions.”
Earlier this summer, I visited Function’s Ikea-furnished office. It’s just south of LAX, minutes from a beach where the company keeps a couple of struggling actors on hire to hand out free drinks. Function has a full-time staff of about 50, but there’s usually only seven or so in the building. Simon and Dayton Miller, who became Function’s CEO, often arrive at 6 a.m., and Hughes, when in Los Angeles, would play catch-up in the afternoon after completing his obligations at the hospital. When I arrive, Hughes has been held up in the operating room. He stumbles in at about 4 p.m. in green scrubs, with a change of clothes in one hand, a laptop bag stuffed with scientific papers in the other, and a phone propped between his right shoulder and head.
The afternoon schedule calls for a meeting to test a new drink Hughes has been developing. In addition to Urban Detox and Light Weight, the company’s suite of products already includes Brainiac (red, claims to boost memory and promote mental acuity), Shock Sports (yellow, claims to help “ease sore muscles”), Night Life (peach, claims to help “promote sexual health”), Alternative Energy (a lighter yellow, claims to help “provide elevation of mood and energy”), Vacation (opaque white, claims to help “improve your mood and reduce stress”), and House Call (a translucent tan, claims to “help boost your immune system and fight colds”). It’s important to have enough functionalities to appeal to a range of people—and enough colors to fill a shelf—so Function always has at least three flavors in the final stages of development.
Hughes creates all the drinks, working with Wild Flavors, a food-science company near Cincinnati that takes the functional ingredients Hughes wants to use and designs a recipe that will mask or complement their taste. Once he and the flavor experts work out a few possible mixtures, Hughes brings the prototypes to the main office for a tasting.
Though I have agreed not to disclose the details of the drink being discussed at this meeting, I can say that it is meant to assist in keeping the heart healthy. Hughes slides folders to each person around the table.
“This is research that I’ve been following for a while now,” Hughes says, placing a hand over the papers in the right half of his folder. “If we can figure out a way to make this work in a drink, I think this could be a great way for people to have access to a potentially life-improving, or longevity-improving, product.”
The employees open their folders and thumb through piles of scientific papers that suggest that the high consumption of an unusual food could prevent heart disease. “Now, to be fair,” Hughes continues, “I’ve included two studies that show no effect.” He taps the smaller stack in the left side of the folder. “But they were both short-term.” The big question, Hughes says, is whether customers will buy a product whose main health benefit won’t manifest itself for years.
This was precisely the problem with Youth Trip, a recently retired Function drink claiming to help maintain healthy skin. “People wanted instant gratification,” Dayton Miller later explains. Sales were unsatisfying, and the team is wary about launching another long-lead product.
The employees take sips of the four offerings and announce their favorites.
Hughes restates the question at hand: “Is this relevant to our customers? I mean, with Urban Detox we can say, ‘If you feel run-down, take this.’ But this … ”
“I think it hits an older demographic,” says Annie Imamura, the company publicist.
“Should we just have the label say function geri in cursive—for geriatric?” Hughes jokes. “I do think this has the potential to just be one of those small, everyday things that make people healthier.”
“The question I’m going to get is, ‘How do I know?’ ” says Joey Steger, Function’s promotion director, who maintains an even tan and whose blond hair gels into a forward-sweeping faux-hawk.
“At the end of the day, we are not a pharmaceutical company,” Hughes concedes. “We’re not trying to live up to those standards.”
“Show them this,” says Liz Kollar, head of national accounts, banging the folder of science onto the table.
The team contemplates how best to satisfy their customers’ skepticism. How can they cram all the science onto the label? Or how do they write a confident assertion that doesn’t smell like pseudoscience?
“I mean, you can see if you just look at this,” Steger says, opening his folder to the two piles of research papers. “How thick this side is”—the favorable research—“compared to this side.”
Hughes clears his throat and smiles. “Well, I kind of stacked it that way.” Then he has an idea. “What if we had a seal from the American Heart Association?”
“Oh,” Steger says. “That would go so far.”
The “enhanced water” section of the beverage industry has grown enormously since Hughes started toying with N-acetylcysteine in his kitchen. Function competes not just with Vitaminwater (whose parent company was purchased by Coca-Cola for $4.1 billion last year) but with SoBe Life Water and Propel (both owned by PepsiCo), Snapple Antioxidant Water, 24C Vitamin Enhanced Water, Vitamin+Fiber Water, H2Om (which “infuses” its water with positive words and music)—and maybe soon, Placenta 10000, a Japanese product that contains elements of swine afterbirth that are said to stave off wrinkles.
There is no scientific consensus that any of these are effective. When I ask Dayton Miller why people continue to buy enhanced water if the product doesn’t deliver any health benefits, he responds quickly. “It’s 100 percent marketing. That’s why we keep stressing that we are created by physicians.” Technically, Hughes is the only doctor on staff. But on a balmy morning a few days after the Function taste test, Hughes drives to Englewood, New Jersey, to meet with Robert and Jennifer Ashton, members of Function’s medical-advisory board. It’s a formal but unpaid panel that includes some friends of the Function principals’. None of the eight doctors formally specialize in nutrition. Nonetheless, they know more about health than admen, and Function considers this group a quasi-peer-review board.
They meet in Jennifer Ashton’s new, environmentally friendly gynecology office. The Ashtons have the appearance of a couple who manage to make plenty of money while getting plenty of sleep. (Both appear as medical experts on Fox News, and look the part.) As Jennifer prepares lattes, Hughes explains his plans for the new healthy-heart beverage. Robert, chief of thoracic surgery at the Hackensack University Medical Center, has immediate thoughts about one of the antioxidant ingredients.
“Just something to think about,” he says, “but with things like this, when you eat it in its natural form, there are benefits. But when you take it out and isolate it, for whatever reason, sometimes it doesn’t work. That’s why when I used to take vitamin C, I’d take it with orange juice.”
I wasn’t expecting doctors who work with food companies to raise these concerns. Function and most of its competitors use antioxidants—in marketing terms, antioxidants are the best thing these drinks have going. But there’s not much evidence that antioxidant-infused drinks provide any health benefit. They do their job in test tubes, says New York University nutrition professor Marion Nestle, but give antioxidants to real people in clinical trials and they show less of an effect. Maybe they only work in tandem with other food elements, or maybe we have our eye on the wrong ball—perhaps we’ve plucked the wrong compounds out of fruits and vegetables. But spicing our foods with antioxidants, Nestle later tells me, can be a waste of time. “In almost every case it’s been tested in clinical trials,” she says, “it’s been shown to have not much beneficial effect.” She says that in a few trials they’ve even had a harmful effect. “When it comes to vitamins and antioxidants, some is good; more is not better.”
Hughes takes in Robert’s comments and nods. “You’re totally right to point that out,” he says. “And yeah, certainly we’d have to have something that we know would work.” He takes the industry’s side of the argument: that beneficial compounds found naturally in foods are often processed out, or occur at such low levels that they don’t make much difference. If the science demonstrates that you can isolate a certain compound without losing efficacy, he says, then it can be consumed at high-enough concentrations to be useful.
“That falls under the category of better living through chemistry,” says Jennifer. She means it as encouragement, but clearly this isn’t the motto Hughes hopes to emblazon on the drinks. “When you have a population trending toward obesity like we do,” she continues, “maybe it’s time to medicalize food.”
For many years, this line of reasoning has proved compelling both to health advocates and the food industry, but as any Michael Pollan–worshipping locavore will tell you (and probably already has), “nutritionism” has its drawbacks. “Don’t forget,” Pollan has written, “that trans-fat-rich margarine, one of the first industrial foods to claim it was healthier than the traditional food it replaced, turned out to give people heart attacks.” Science is great for you, except when it’s not. Vitamins are healthy, except when they’re not. Bottling “healthiness” has served the beverage industry well, but even the most loyal customers are liable to flee if they fear they are being played for suckers. And Function, because it is serious enough about science to provide citations on its Web page, is particularly vulnerable to critique.
Consider Urban Detox. This drink contains prickly-pear extract, which is said to help blunt a hangover. In a Tulane University trial, doctors asked volunteers to take a prickly-pear-extract pill, drink heavily, and then report their symptoms the next day. The study showed a significant lessening of three out of nine symptoms: nausea, dry mouth, and loss of appetite. Yet even this small effect is suspect—Extracts Plus, the company that manufactured the prickly-pear pills, provided funding for this trial.
Hughes concedes that the funding for the prickly-pear study makes it less convincing (although Function still refers to the study as having “proven” the benefits of the extract). “That’s why we’ve decided not to pay for science ourselves,” he said. “I’ve had people ask me, ‘Why don’t you believe in my product? There’s $20 million of science behind it.’ Well, with $20 million you can buy whatever result you want.” In the prickly-pear case, though, Hughes says he was impressed that academic doctors had carried out the experiment. It was a double-blind randomized trial, meaning neither the researchers nor the volunteers knew if they were getting the extract or a placebo. But he agrees that one small, industry-funded trial does not amount to conclusive evidence.
In Urban Detox, Hughes paired the prickly-pear extract with a component that he says has a heftier scientific foundation. “There are some things we use, though, that are just no-brainers,” he explains. “N-acetylcysteine—asking if that’s effective is like asking if a parachute is effective for someone falling out of an airplane.”
N-acetylcysteine does seem promising, as it’s used routinely in hospitals to treat people who have overdosed on Tylenol. But this in no way relates to hangovers. According to Thomas Schiano, a liver specialist at the Mount Sinai Medical Center, it is not generally used to protect the liver from alcohol. “There’s no data on that,” Schiano says. “I’m not sure that’s not false advertising.”
I ask Hughes for a rebuttal, and he points to a study in which N-acetylcysteine was applied directly to rodent liver cells. The rats showed a decline in acetaldehyde, which is a derivative of alcohol. But it’s a big leap to assume that human livers would react similarly to N-acetylcysteine infused in a health drink.
“At the end of the day, we are not a pharmaceutical company,” Hughes concedes. “We’re not trying to live up to those standards.” Unlike other beverages, Function makes claims to functionality that are based in Western science, he says. That science may not prove that the ingredients will work like they are supposed to, but it does imply that, in theory, they could.
And it’s possible that one or more of Function’s ingredients do work. N-acetylcysteine could be the modern-day coca-leaf extract, which was still poorly understood by scientists when Coca-Cola launched its “ideal brain tonic.” But Nathanson, the Beverage Spectrum publisher, is skeptical. He knows Hughes and many other executives in the industry and has found a universal disinclination among these leaders to examine the effectiveness of their drinks objectively. “When you look at SoBe, it’s sweetened crap,” Nathanson says. “All these beverages are just sugar water. No one has been able to show that the products work. And I want to temper what I say because some of these guys are my friends and advertisers, but at the same time I’ve got to be real.”
Since Hughes moved into his apartment at 71st and First, he has been meeting with distributors in an effort to persuade them to do on a large scale what he had been doing in individual stores: arranging the bottles in just the right order.
“We have a beachhead here,” he says. “So now it’s a matter of looking at what regions are performing well, which are not performing up to potential, and then adjusting the facts on the ground. And what we’ve found is if we can fine-tune the right bottles for the location, we have stratospheric success.”
As for the heart-healthy proto-beverage I tasted, Function has gone through six more iterations of the drink, trying some ten new flavors each time.
“We haven’t hit on a name yet,” Hughes says. “We’re looking for something that combines the best of both worlds—that gives consumers a shove in the direction of what it does but retains some mystery.”
Give away too much scientific detail at once, he says, and the drink loses its mystery. “I imagine that’s what any doctor deals with. How you make basic health information exciting?
“You definitely feel the temptation to totally blow it out of the water—to make it sexier than it is. Lots of products do that with their advertising. But if you are dealing with fundamental science, you have to get a little more creative.”