Non-alcoholic 2.0: Terps & Co creates next gen spirits to lose the booze but keep the sensation

Currently, most non-alcoholic spirits are distilled from plants and provide the sensory properties of taste, aroma and mouthfeel, with no other functional benefit.

Now, Terps & Co has created three types of spirits, gin, rum and whiskey made with terpenes, which the firm says fulfils the sensory properties and also offers the uplifting feeling that people get after drinking alcohol.

According to Terps & Co co-founder James Crow: “I've been looking for an opportunity to find an alternative option for people who don’t want to drink alcohol, but they still want some of the feeling that comes with drinking alcohol.​

“This is a world first product and something I see as the second generation of alcohol alternatives where the product, once consumed actually has a positive effect on the mind and body​.”

What is terpene​

Terpenes are aromatic compounds present naturally in plants. They are present in fruits, vegetables, herbs, and flowers.

Terpenes work by binding to receptors and neurotransmitters in the brain, which regulates emotions.

In Terps & Co’s spirits, some of the terpenes it used are pinene which increases oxygen in the bloodstream and gives a mood and energy uplifting effect as well as limonene for a refreshing and stimulating sensation.

“Heavy drinking tends to decrease our cognitive function. However, with terpenes, they don’t numb the brain, which means a heightened sense of perception and concentration so this improve our cognitive function​,” Crow said.

Getting a “high”​

Terpenes should not be confused with the terpenes in cannabis which enhance the effect of cannabinoids such as tetrahydrocannabinol (THC).

Terpenes do not exert a psychoactive high in the same way as the THC. However, they work in subtle ways to alter mood through interaction with the serotonin and dopamine systems. 

“There may be other compounds that offer the same effect, but we found that terpenes are a highly regulated set of compounds being FDA and GRAS approved, are safe to use, yet deliver the positive interactions within our bodies,”​ Crow explained.

Process of making​

All three spirits from Terps & Co use the same terpene blend containing 40 terpenes.

It sources the terpene blends from a supplier in North America, which extracts through distillation.

In New Zealand, the company blends the terpenes with other natural flavours and extracts to give the spirit its desired taste, aroma and mouthfeel.

“It allows us to reduce the cost since we don’t distill the products ourselves, and can just combine the ingredients like you would a traditional beverage​.”

Due to the distillation process, the spirits contain trace amounts of alcohol of less than 0.1% ABV.

Getting into retail​

The products were first launched in July this year on the company’s online store. It is now in discussions with liquor stores and supermarkets who are beginning to expand their non-alcoholic section.

The low-to-no-alcoholic beverage industry is growing tremendously, with statistics from Global Market Insights estimating a growth​ of 7% from US$20bn in 2018 to reach US$30bn by 2025 in the Asia-Pacific region.

Although the non-alcoholic market is growing with more brands entering the space, many retailers have not seen the same in sales growth.

These retailers are now more critical of the products they stock, citing how most of the non-alcoholic products are just another version of previous products.

Crow said: “The market is growing so the interest of consumers is definitely growing, but the level of technology and innovation is not growing, so consumers are just trying once.​

“Retailers are becoming more interested in products with extra added value for the customer​.”

Expansion​

Terps & Co is looking to expand to other spirits such as vodka and tequila as well as other alcohols beyond spirits.

It is now focused on developing the intellectual property, and working with partners in other countries to produce and assemble the drinks locally.

Given the way logistics are changing now, this seems the most appropriate expansion plan. “Five years ago, we can fill a shipping container and reach Australia in two weeks or Asia in three weeks, now that’s no longer realistic,​

“Since we understand the flavour profiles, and can bring terpenes into any country, there is no need for us to fill containers of glass bottles from New Zealand​,” Crow said.

The firm is currently in discussions with partners in Australia.

The other co-founders of Terps & Co are involved in the Good Herb Soda business in New Zealand, which uses a different blend of terpenes in its beverages.