How Leilo is using technology to create a new category

Major League Soccer’s New York City Football Club is a little more mellow this year with Leilo as the team’s Official Relaxation Partner. What is Leilo? It’s a carbonated beverage made from kava, a plant from the Pacific Islands that has sedative and euphoric effects in drinks made from its root. New York’s MLS team created the “relaxation” category specifically for the Leilo sponsorship.

The New York City FC partnership is Leilo’s first major sponsorship since launching last fall. Because its active ingredient isn’t alcohol or cannabis, it’s not regulated in the same way that those products are. Leilo (pronounced “lay low”) is a legitimate groundbreaker, blazing the trail for a new category of beverages. This category creation resembles the mass-market expansion of Red Bull in the late 1990s and 2000s, when energy drinks gained traction through “extreme sports” marketing.

But breaking ground in a new category requires marketing that builds from the ground up. A brand in a new category can’t simply tap into pre-established segments, they have to discover and connect with their own. To continue its rollout, Leilo has deployed a data-driven grassroots movement with out-of-the-box sponsorships, as well as digital channels that stitch together the largely local communities that drink kava beverages and the patchwork of stores that sell Leilo. 

Thus far, Leilo’s methods provide a useful blueprint for any product looking to break into a new category. They have to connect directly with each and every customer and prospect, and build a community around them. For Leilo, this involves getting as many emails and SMS numbers as possible from passionate fans on social media and at in-person events like soccer matches, and reaching out to them using marketing automation platform Klaviyo.

Mapping an audience

At the heart of Leilo’s grassroots presence is a geography-based community platform called Grog Maps, with whom Leilo is partnering. The app was developed by Founder, Samuel Morales. When users download the app and share their location, they can find the closest place to get kava. 

In the U.S., kava beverages are primarily sold in dedicated kava bars. According to Leilo founder and CEO Sol Broady, there are over 250 kava bars in the country, and 350 specialty retailers that sell Leilo. The product is also available through direct-to-consumer through Leilo’s website and on Amazon.

Grog Maps allows kava enthusiasts to create their own account and connect with like-minded individuals and post messages about the kava bars they visit. It also allows sellers to connect with the platform.

Additionally, Morales hopes kava farmers will also link up with Grog Maps so that the community can see where the kava they consume is sourced. In the kava community there is a great deal of attention placed on various strains of the plant that link back to the region where it was cultivated, not unlike the regional qualities in wine or the particular strains and varieties of cannabis, according to Morales.

Morales stated that the highest concentration of kava bars exists in Florida, followed by California and New York. By far, these are the three states with the highest concentration of kava sites, with a handful of bars and stores located in several other states around the country. There are still several states with no kava bars at all.

Retail strategy

Leilo is the first ready-to-drink kava product available at retail.

“The premise that we work off of is that everybody is drinking coffee and energy drinks in the morning, but that there are very few options on the opposite spectrum to decompress,” said Broady. As a category, kava might be closest to alcoholic beverages and spirits, which are tightly regulated. Currently, Leilo is sold in some specialty grocery stores, health food stores, gyms and traditional “headshops.” Broady says that Leilo is even available at some chiropractors’ offices.

As Leilo rolls out their product with wider distribution, Broady has discovered that the sales and marketing technology at the retailers varies greatly. In partnering with Grog Maps, Leilo is taking the initiative to create a digital infrastructure for educating consumers and pointing the way to retail and bar locations where his product can be purchased. But he’s also laying the groundwork for an entire industry that may very well follow from his bold first moves.

The New York City FC sponsorship, the first to open up the “Relaxation” category, already has other sports leagues considering similar sponsorship opportunities, according to Broady. “We’re planting a flag in the ground, that the relaxation industry is emerging,” he said, predicting it will be the one of the largest growing categories in the CPG sector in next ten years.

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Data and brand exposure

“The NYC FC sponsorship is fantastic for us, with soccer a huge growth opportunity, while some of the other leagues are more saturated,” Broady said.

Unlike some other major sports leagues, in the Major League Soccer model, the league retains player rights, so that Leilo doesn’t have to negotiate with soccer players’ agents. Signage for Leilo includes point-of-sale, merchandising and tickets that the brand can give away in special offers.

New York is also an important market for kava retail and bars, since Florida and California are the only two other markets that have any significant presence in kava. Leilo also served as the title sponsor for the Hey Stamford! Food Festival in Connecticut. With live events comes more consumer engagement and data.

“The festival and other events allow us to look at our sales site traffic, use QR codes and match up various demographic segments,” said Broady. “Where do they live, what stores do they frequent, how do we hold onto the interest and expand that.”

He added, “There’s big value on the events side, because it’s hard to convince consumers to share info for just a beverage. It’s a lot easier when there’s some sort of proxy attraction or asset that really excites people. When we can connect the brand to positive experiences, it’s a win.”