Feel better, live longer and look better. These are the attributes of the beverages Brian Lovejoy has already launched or plans to launch in the near future. He says this is what consumers demand and his company, Drinks That Work (Westlake Village, CA), wants to be there for them.

Mr. Lovejoy got his start in the functional beverage business with a little company called Odwalla, which is now owned by Coca-Cola. There he became acquainted with the struggles familiar to most beverage companies today. "So much of this business is driven not only by what the consumer wants, but also the distribution that's available to companies creating products. Being at Odwalla was a product developer's dream because we could put out pretty much anything we wanted and the consumer was going to see it-we controlled the development, manufacturing, distribution and retail environment."

But unless you have a dream scenario like this, operating a fledgling beverage company these days is certainly a daunting task. "What I've learned since then is that not only do you have to please your consumer, but you also have to sell to distributors and retailers, and they really have to understand and embrace your product in order for it to be seen by consumers. The problem is, consumers are much more savvy than the retailers or distributors when it comes to what is new, interesting and potentially successful."

After his experience at Odwalla, Mr. Lovejoy decided to move in a different direction in search of beverages that "truly" function, and that's when Drinks That Work was born. His first foray into the market with Drinks That Work was a "shooter" based on kava. Unfortunately, its presence on the market was short lived. Soon after it hit stores, the kava market took a turn for the worst when public health authorities started to lambaste the herb due to a handful of case reports of liver toxicity in Europe.

At this time, Mr. Lovejoy decided it would be wise to discontinue the product-a smart decision years later as the kava market has effectively bottomed out. "We had a kava shooter called GiZo, as well as a 10-oz. kava carbonated drink. The kava products were some of our best sellers, but as the heat turned up on kava, the harder it became to get insurance," he said. "Kava is a great example of how we took something culturally and misunderstood it from the beginning, and then we tried to turn it into something it's not. I'm not convinced that kava was a real health issue, but it was clear at the time that staying in that market was not a good long-term business decision."

Now Mr. Lovejoy is obsessed with the company's newest product, UpShot. This 2.5-oz. energy shot contains a proprietary blend of energy-producing plant extracts, including kola nut, guarana and green tea. All the shots contain the same basic formulation, the only difference is the flavors, which include Fruit, Cola and Mocha.

UpShot can be found in convenience stores and gas stations across the U.S. But, as Mr. Lovejoy points out, nailing down distribution for this product was not easy. "I would sure love to be able to sell to those 300 or 400 natural food stores, but there isn't enough business there unless you have 20 or 30 SKUs. If you have one or two good products you can't make a living just selling to natural food stores. The money is in convenience stores, drug stores and mass market."

Further, he said, the convenience channel is the home of energy drinks. "Convenience store purchases are impulse purchases and that's why 'energy' is so popular. If you establish distribution in convenience stores where the main functional beverage is 'energy,' you will probably make a lot of money," he said.

For the future, there are more "shots" planned for launch from Drinks That Work. In fact, Mr. Lovejoy says he currently has 17 product concepts in development. "Most of my work right now is focused on 'UpShot 2.0,' which is basically going to be an improvement on the existing UpShot product currently on the market. What I am trying to improve this time around is flavor, how quickly it begins working and how long it lasts. With energy products, it's not so much the intake but the uptake that really makes the difference in a product's effectiveness."

Another concept he's working on includes an oral cosmetic shot. For that he says he'll have to change his current distribution. "Right now my basic distribution is convenience stores and gas stations, which obviously isn't the most appropriate route to market. This is my struggle. I am going to wait until we have distribution to some of the major drug chains before we launch some of those concepts."

Mr. Lovejoy is cautiously optimistic about the functional beverage market going forward. "When you combine consumers' demand for new and innovative products with DHSEA being attacked by Congress, you have to be a little nervous. But I'm rooting for the consumer," he said. "In terms of trends, I think consumers are interested in function more than ingredients, but I think they will be increasingly interested in gaining a deeper understanding of the various 'functional' ingredients going forward."