Executive Summary
Ryan Chen stands as a pivotal figure in the modern consumer packaged goods (CPG) landscape, best known as the co-founder of Recess, the sparkling water brand infused with hemp extract and adaptogens. While his co-founder, Ben Witte, often spearheads the creative direction, Chen provides the operational backbone that transformed a calm-inducing beverage concept into a viral lifestyle brand.
This report analyzes Chen’s transition from high-finance to the chaotic world of beverage startups. It explores his strategic approach to supply chain management in a gray-market regulatory environment and how he helped build a direct-to-consumer (DTC) powerhouse that redefined the functional beverage category.
From Wall Street to Wellness
Before disrupting the beverage aisle, Ryan Chen followed a traditional path of high achievement. His background is rooted in investment banking and private equity. This financial literacy provided a stark contrast to the typical creative-first approach of many CPG founders.
Chen’s time in finance equipped him with a rigorous understanding of unit economics. In an industry where margins are often sacrificed for growth, Chen’s disciplined approach ensured that Recess could scale without the fatal cash-burn rates that plague many DNVB (Digitally Native Vertical Brands).
His decision to leave the stability of finance was driven by a desire to build something tangible. The shift was not merely professional but personal, stemming from a desire to address the anxiety and stress prevalent in the modern workforce—a problem he experienced firsthand.
The Genesis of Recess
Recess was born out of a specific cultural moment. In 2018, anxiety was rising, and the ‘sober curious’ movement was gaining traction. Chen and Witte identified a massive white space between caffeinated energy drinks and alcoholic beverages.
They envisioned a ‘third category’: beverages designed to help people achieve balance and clarity. While Witte focused on the branding that would eventually break the internet, Chen focused on the impossible task of formulation and supply chain.
Sourcing quality hemp extract and adaptogens like L-theanine and Schisandra required navigating a complex web of regulations. Chen’s ability to secure reliable supply chains early on gave Recess a competitive moat, allowing them to launch with a product that tasted consistently good—a rarity in the early CBD market.
Operational Excellence in a Gray Market
One of Chen’s most significant achievements was navigating the payment processing and advertising bans imposed on hemp-derived products. Facebook, Instagram, and major credit card processors initially blocked CBD companies.
Chen spearheaded creative workarounds and diversified the company’s sales channels. By focusing heavily on a robust DTC infrastructure when retail was hesitant, Recess built a loyal community. This owned-audience data later proved invaluable when pitching to major retailers.
Under Chen’s operational leadership, the brand expanded beyond the initial hype. They introduced ‘Recess Mood,’ a magnesium-based line, strategically bypassing the regulatory hurdles of CBD to enter mass-market retailers like Target and CVS.
Comparative Market Analysis
The functional beverage market is crowded. The following table illustrates how the strategy executed by Chen and his team differentiates Recess from traditional incumbents and other functional upstarts.
| Feature | Recess (The Chen Strategy) | Traditional Seltzer (e.g., LaCroix) | Generic Functional Sodas |
|---|---|---|---|
| Primary Benefit | Calm, Balance, Focus | Hydration, Carbonation | Gut Health or Energy |
| Key Ingredients | Magnesium, L-theanine, Hemp | Carbonated Water, Flavor | Prebiotics, Caffeine |
| Market Positioning | “Antidote to Modern Times” (Lifestyle) | Commodity Beverage | Health Supplement |
| Distribution Model | DTC-First, then Mass Retail | Wholesale / Retail Only | Mixed / Retail Focused |
| Price Point | Premium ($4.99/can avg) | Economy ($0.50/can avg) | Mid-Tier ($2.50-$3.50/can) |
The Pivot to Magnesium
A defining moment in Chen’s tenure was the realization that hemp regulation was moving too slowly for the company’s ambition. To unlock true scale, Recess needed to be in national grocery chains that were risk-averse regarding CBD.
Chen helped oversee the development and launch of the ‘Mood’ line. By swapping hemp for magnesium L-threonate, Recess maintained its brand promise of ‘calm’ while removing the regulatory friction. This pivot demonstrated high-level agility, allowing the brand to expand its total addressable market (TAM) exponentially.
Future Outlook
Ryan Chen’s journey with Recess highlights the importance of operational agility. As the brand moves into apparel and content, evolving into a full-fledged media company, Chen’s role ensures the business fundamentals remain sound.
The future for Chen likely involves further expansion into the ‘relaxation economy.’ With mental wellness becoming a priority for consumers, the infrastructure he has built positions Recess to lead the category for the next decade.
