‘This Product Has Won a Championship’: Inside Barcode, the New Kyle Kuzma-Backed Sports Drink
The orange Gatorade cooler is a staple on the bench of nearly every professional sport. But according to Mubarak Malik, the former New York Knicks training director, there are few athletes who actually drink the cooler's offerings.
"It's a marketing ploy," Malik said. "I'd say about 80% of players just drink water, the other half just just drink hydration tablets."
About 10 years ago, Malik started creating his own sports drinks at home. "Back then, I felt like we were just way behind in nutrition," he said. He started a pilot project, creating different formulations and giving them to athletes for testing. Last year, he met Kyle Kuzma, the Lakers' small forward, through a mutual business partner. He gave Kuzma a beverage to test out during the NBA finals. "We decided to become business partners soon after," he said.
This year, both Kuzma and Malik are taking that drink public, with the launch of a beverage company called Drink Barcode (the drink itself is just called Barcode). The company has six full time employees, is headquartered in Los Angeles and raised $5 million in funding (Malik said Drink Barcode isn't seeking additional funding at the moment). The drink is currently available online through Barcode's website, but Malik said it will be available at six Erewhon locations in Los Angeles on June 1.
Barcode consists largely of a combination of coconut water, regular water, and three key ingredients: vitamin D, magnesium, and adaptogens, which are plant and mushroom extracts. It's a bit of a departure from traditional sports drinks, but Malik is betting that athletes, professional or otherwise are looking for something different.
Former New York Knicks training director Mubarak Malik
Traditionally, sports drinks either help provide a quick burst of energy during a workout, like a traditional Gatorade, or are used to help aid recovery, like Gatorade's G Series Recover. Depending on what niche the drink wants to occupy, it might lean more heavily into one camp or the other. The in-game options might provide sugar and carbohydrates. The post-game option might combine carbohydrates with protein to aid recovery.
A newer generation of drinks, like Barcode, is looking to do things differently. Barcode, Malik said, is supposed to be used during games, before games, or by non-athletes who aren't working out. Carbohydrates, sugars, and proteins aren't the focus – Barcode contains just 2 grams of sugar, 6 grams of carbohydrates and no protein. Malik explains the protein's absence: "The recovery inducing properties come from the adaptogens and vitamin D."
The concept that adaptogens and vitamins might be the next frontier in performance drinks, though not definitively proven, is spawning a new cadre of drinks.
There's Gatorade's Bolt24, which advertises high levels of vitamins A and C, or BodyArmor Lyte, which has no added sugar. These are "functional beverages," intended to be light on carbs, calories and sugar, and, in theory, made for drinking during exercise or during the day, just as Barcode is.
Traditional Gatorade still commands 72% of the sports drink market share, but "functional beverage industry"—performance-oriented drinks that include nutrients —is expected to grow at a compound annual growth rate of 8% after 2021. The largest segment of the functional beverage industry, according to Research and Markets Report, is the health and wellness sector.
Barcode leans especially hard into the wellness aspect of its formula. Barcode's "adaptogen-rich" descriptor refers to the presence of mushroom and plant extract that have been studied in herbal medicine circles, but are relatively new to sports performance drinks. The watermelon version of the drink contains a cordyceps fungus extract. The lemon lime flavor contains extract from a plant called rhodiola rosea, Malik said.
There are a handful of scientific studies on the efficacy of mushroom extracts, particularly for cordyceps. Some do suggest anti-inflammatory properties and immune boosting potential. As for rhodiola rosea, the European Medicines Agency does note that it "can be used for the temporary relief of symptoms of stress, such as fatigue or sense of weakness."
Still, this research is relatively anecdotal. Guillermo Escalante, a professor of kinesiology at California State University, San Bernardino cautions that research into adaptogens is in its early stages. "I would say it's way too early to completely say that they don't work, but it's way too early to say that they're the next greatest thing, he said. "I think the verdict is still out."
Adaptogens aside, Barcode may be able to bridge the gap between sports drink and wellness drink because of its low sugar content. One of the most common criticisms of sports drinks is that they're more like sodas than performance beverages, and not needed by the majority of athletes, especially adolescents.
If most people have eaten about two hours before exercising, "that's going to cover you during your workout," said Escalante. Those athletes might not need a quick bit of carbohydrates or sugar to keep going.
Barcode, which aims to keep one foot in the world of elite athletics and one in the regular world, does seem to have kept sugar and calorie levels low enough to stay out of soda territory.
"Athletes are being funneled to healthier food during the season, so their palettes are being trained to have a healthier product that's not super sweet. But it also is sweet enough to feed that need of having a sugary drink that they've been relying on for years," he said.
Barcode's sweetness has been refined to reflect the increasingly picky palettes of elite athletes, an important step, because it's their reactions to the drink, and use of it that will probably dictate its success—as would on-court achievement.
Sports drinks often become household names through association with athletic achievement. In 1965, Gatorade was invented at the University of Florida. In 1966, the Florida Gators won the Orange Bowl for the first time. In 1969, the Kansas City Chiefs were the first NFL team to use Gatorade. That year they also won Super Bowl IV.
Barcode could have a similar origin story. Malik said he's tested the drink in real games, and confirms that Kuzma was drinking Barcode during last season's NBA finals.
"This product has won a championship," he said.
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This week on the L.A. Venture podcast, hear from Mike Jones, the founder and CEO of studio and venture firm Science Inc. Jones is considered an expert on scaling and robust business strategy. He runs Science Inc. with Peter Pham, Greg Gilman and Tom Dare.
Starting in the late 90s, Jones began creating and managing his own businesses. He created UserPlane, an instant messaging service that was acquired by AOL early in his career. Following that, he was the turnaround CEO of MySpace— helping the company navigate losing its legacy status — and has invested in a number of notable brands, including GoodReads, Maker Studios Inc., HelloSociety and DogVacay.
Science is often considered an incubator. It was also the first investor in Dollar Shave Club and has also helped scale Mammoth Media, Arrive Outdoors, pray.com, Liquid Death and PlayVS. Jones has also been named one of the most influential people in Los Angeles.
Science has a venture funding studio, a blockchain fund and a late-stage SPAC. The company is best known for its venture arm, which is investing out of its $100 million Fund III.
Jones also works with these companies as an advisor. He says it's important to him that the founders he invests in are willing to learn and be highly adaptable to new strategies.
His background at MySpace, he says, gives him a unique perspective on the future of social media. He says he has respect for Snap founder Evan Spiegel, but adds he thinks social media needs to be more empathetic.
"in a world where when you and I meet up in person, we have millions of micro expressions on how we're communicating with each other," he says, "like pheromones, and all the other components that go into two people standing next to each other and actually having a conversation. We have to rebuild that digitally."
This is why he argues that founders' intent and message are so important.
"The thesis of an authentic brand is 'I make this product because I believe it's the right thing to do. And it has a purpose'," he says, beyond profit.
Mike offers his insights on investing, the 2020 ecommerce boom, the future of NFTs and his passion for cyrptocurrency.
"One thing that's 100% true is I've never seen retention correct itself. If you need to change retention substantially, you need to make substantial changes to the business." — Mike Jones
dot.LA Engagement Intern Colleen Tufts contributed to this post.
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Culver City-based Adway is offering Uber and Lyft drivers hundreds of dollars every month to project ads on the sides of their cars.
So far, the company has signed up about two dozen drivers in Los Angeles, where competitor Firefly faced fierce pushback a few years ago from city officials who sought to ban digital ads on moving vehicles.
Adway promises drivers $50-$350 a month in what they call "passive" income. All the drivers have to do is install a small device that sits just underneath their vehicle's side view mirrors.
CEO and co-founder Sasha Krylov said his wife deserves much of the credit for the idea. A feature on a car she saw called a "puddle light," which projects a logo or image on the ground when one of the doors is opened, caught her attention. She felt the image was trying to communicate something.
"I told her it was just a gimmicky logo," Krylov said. "But I thought to myself, 'what if she was right?'"
It was this epiphany that eventually led Krylov to this moment. Last week, the nearly three-year-old company clinched a $6 million seed round led by Upfront Ventures.
Among its advertisers are Webex by Cisco and poke restaurant Sweetfin. Adway gives these companies an estimate of how many impressions their ads made by determining how many Bluetooth devices came within a certain radius of the vehicle. Krylov said this one-way communication system does not collect personal data from the devices.
Krylov decided to project on the side of the car because, according to him, it was his only option. In his research, he learned that it was illegal in California to project an image on the ground, as the puddle lights do, when the vehicle is moving. The same went for the front and the back of the automobile.
"The only thing that was left, really, was the side of the car," said Krylov. "Coincidentally enough, the side of the car presents the largest possible real estate on the body of the car, which any advertiser would want to capitalize on."
Another early concern was the mere fact that projections do not show up well in daylight, meaning that Adway drivers can only make impressions on customers between dusk and dawn. At first, Krylov worried that this could be a limitation for the company, but he has seen only promising results.
"To our surprise, [it] actually makes a lot of sense if you think about this," Krylov explained. "A lot of traffic is actually concentrated in the evening, between 4 and 7pm, and if we're not talking about summertime, it goes dark around 4, 4:30. And people are more prone to making purchasing decisions after work hours rather than before."
Despite this, looking into hardware options in the future that can allow these projections to be seen during the day is also on the docket for Adway.
"This is what we're building this technology towards," said Krylov. "We just need to start somewhere, and somewhere is now, because there's still a tremendous amount of the market to be seized, and there's an opportunity for us to build a community of intellectual property around this today."
Adway's method of advertising has the potential to stir up controversy. A couple of years ago, L.A. city councilman Bob Blumenfield wrote an op-ed for the "Los Angeles Daily News" condemning San Francisco-based Firefly for their similar advertising method of digital billboards on the roofs of rideshare vehicles.