Can direct-to-consumer brands get the $30 billion sleep aids market to think beyond melatonin?

Americans struggle to get a good night’s sleep — and the pandemic has not helped matters. While the CDC has long reported that around one third of Americans have trouble with their sleep, during the pandemic that percentage soared to over 40%.

Most Americans turn to melatonin when they are trying to solve their sleeplessness problem — in 2020, $826 million was spent on supplements containing the ingredient in the U.S., up 43% year-on-year. But a growing number of direct-to-consumer brands are eyeing the $78 billion sleep business and want to convince people that the route to better sleep can’t just rely on this hormone alone.

For Veronica Lee, the founder of herbal sleep supplement brand Remrise, the pandemic presented an opportunity to switch people over to her way of thinking.

Will Americans switch to “clean” sleeping remedies?

Remrise had launched in November 2019 selling personalized herbal supplements, following a year of research and development and $8.2 million in funding.

When the pandemic hit, Lee decided to conduct a six-week study with 1,200 participants to test 35 herbal ingredients in 17 different combinations. The goal was to figure out which formula could best improve people’s sleep, when compared to both a placebo and melatonin.

Rather than offering personalized pill packs, Remrise now sells just two melatonin-free formulas — one is stronger than the other, Lee says — packed with things like reishi mushrooms, magnesium and passionflower extract.

While melatonin can help people to fall asleep, it’s not so great at actually keeping you asleep. Lullaby Sleep Co, which launched in October, adds chamomile and hemp to its melatonin supplements, while Sandland Sleep complements a low dose of melatonin (less than 1mg) with 15mg of CBN, a non-psychoactive cannabinoid. There are even sleep hydration sachets that you can buy — combining chamomile, magnesium and melatonin — to mix into a glass of water and drink half an hour before bed.

These “clean” sleep remedy brands say their holistic formulas can improve sleep more than a prescription, over-the-counter or melatonin-only sleep supplement can. Lee says that these types of pills typically don’t help with actually improving the amount of deep or REM sleep you get (the stages the body needs in order to feel refreshed). “That’s why a lot of people still feel groggy the next morning,” she says.

Getting tired customers on board

Convincing sleep-deprived customers to switch over to a list of ingredients they might not be so familiar with is a tricky sell. “Natural sleep aids don’t have this knockout effect like a Unisom or prescription does,” Lee agrees. “And people have to be patient with that.”

Lee says that people who buy sleep remedies typically tend to hop between products, meaning it’s not too hard to get them to take a punt on something new. Getting them to stick with it is another story — natural sleep remedies, particularly those containing no or lower doses of melatonin, tend to have a more cumulative effect.

“If you look at traditional Chinese medicine, a lot of these herbs are meant to be taken over long periods of time to have the desired effect,” she says, adding that customers tend to notice improved sleep after a week of taking Remrise’s product, rather than instantly.

That might sound slow to someone who's in desperate need of a good night's sleep — but Lee says it will pay off in the long run.

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