Do Americans need to drink more water? A growing list of private equity firms, venture funds, strategics, athletes, and celebrities sure think so.
An estimated 75% of Americans suffer from chronic dehydration.
To help combat that, there are now several brands marketing better-for-you electrolyte powders, many of them formulated around the World Health Organization’s recipe for Oral Rehydration Salts (ORS).
“We just don’t drink enough water,” explains Kevin Rutherford, the CEO of Nuun, a functional hydration company that unveiled its new line of “Energy” tablets on Tuesday.
“Our goal is to keep finding ways to get people to drink more water,” he said. “But water alone doesn’t actually hydrate you all that well. You need electrolytes.”
Nuun, which over the last two decades has made a name for itself as a leading brand of tablets and powders designed for serious endurance athletes, has in recent years begun trying to help more mainstream consumers increase their daily water intake.
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Last year, the company released an “Instant” line formulated for times when consumers need rapid rehydration, and in 2018 it launched an “Immunity” line engineered to combat general fatigue from travel, daily exercise, and nutrition deficiencies.
Nuun also sells its flagship “Sport” line as well as tablets packed with vitamins for everyday wellness.
The company’s newest product is designed to give consumers a “clean boost” of energy while also encouraging them to take in more fluids.
Each tablet features 80 milligrams of caffeine from organic green tea, as well as adaptogens (Panax Ginseng), electrolytes, and a B-vitamin blend that serves as a “clean alternative” to sugary energy drinks.
“Our intent here is to take a more balanced approach, and provide a more long-lasting energy,” Rutherford said.
By blending a lower dose of caffeine than a typical 8 oz. cup of coffee — which contains about 95 milligrams — with adaptogens and B vitamins, Nuun believes it can deliver sustained energy while also boosting cognitive function, promoting alertness, enhancing focus, and improving everyday hydration habits in an easy-to-use tablet.
“If we can get you to drink more water, you’re going to be healthier,” Rutherford said.
However, Nuun isn’t alone in its quest to rehydrate America.
Numerous brands are now competing in a nearly $2 billion water enhancer segment that is enjoying increased consumer interest amid the realities of a pandemic-induced work from home lifestyle.
“The pandemic has made it so the average consumer’s wellness priorities shifted,” said Hydrant co-founder John Sherwin, who noted that Americans are beginning to “take control” of their daily routines.
Hydrant, which last year raised $5.7 million to expand its line of powdered hydration mixes, focuses on creating lower-sugar products with fewer ingredients.
“Our philosophy is that products should be effective and simple,” Sherwin said.
Hydrant’s offerings include a rapid “Hydrate” line, as well as powders designed to increase energy, boost immunity, and promote restful sleep.
“Importantly, hydration isn’t being seen as a brief trend or hangover cure, but a crucial aspect of wellness that can impact everything from how we work to how we sleep,” Sherwin said.
Over the last six months, Hydrant has expanded into more than 8,500 brick and mortar retail stores after operating exclusively as a direct-to-consumer brand.
Another company looking to quench America’s thirst is San Diego’s Hydralyte, which expects to grow sales by 70% in 2021.
Like Nuun and Hydrant, Hydralyte offers powders with energy, immunity, and electrolyte properties. The company also sells a “Collagen Boost” powder as well as a multi-serve electrolyte-infused oral rehydration solution similar to Pedialyte.
Hydralyte CEO Oliver Baker said consumers are beginning to recognize that “dehydration affects them daily,” which has led to increased adoption of hydration enhancers like his.
According to Gerry Khermouch, the editor of the Beverage Business Insights newsletter, powder-based hydration brands are also benefiting from being sold in “e-commerce-friendly” packages at a time when online shopping has accelerated.
“They benefit also from some consumers’ desire to customize their liquid and to avoid purchasing single-use plastic bottles,” Khermouch added.
A focus on both improving hydration habits and creating sustainable products is what led international CPG firm Unilever to acquire California-based Liquid I.V. for an undisclosed sum last September.
“Liquid I.V. is an impressive and innovative brand in the fast-growing health, wellness and personal nutrition space,” Unilever North America president Fabian Garcia said at the time. “Liquid I.V. shares Unilever’s purpose to improve people’s health and wellbeing, as well as our ambition to create sustainable products that have a positive social impact.”
Since its launch in 2012, Liquid I.V. — which sells a range of “hydration multipliers” — expanded distribution into major retailers like Costco, Walmart
The influx of brands, coupled with more mainstream retail adoption, is helping consumers “realize the benefits of optimal hydration,” according to Rutherford, who sees an enormous amount of future potential for the category.
“What’s happening in hydration could be bigger than the plant-based revolution that’s happening,” he said, arguing that tablets and powders are starting to source volume from ready-to-drink products that offer similar benefits.
“Hydration is the first thing you should do if you want to improve overall health and vitality,” he added. “There’s a big business opportunity because people are recognizing the benefits of electrolytes.”