In 2020, when Unilever acquired Liquid I.V., a manufacturer of electrolyte-infused beverage mixes, for an undisclosed sum, many viewed it as a trend driven by the pandemic, as consumers increasingly sought food and drink options with added health benefits. However, the hydration drinks sector has since demonstrated consistent profitability, prompting major brands to pursue the numerous consumers eager for innovative beverage alternatives. The trend began in the mid-2010s with the rise of Pedialyte, an electrolyte-packed drink initially designed for treating dehydration in infants. Once confined to the baby food aisle, it gained traction among college students and young adults seeking relief from hangovers. The brand made an appearance at the Coachella Music Festival in 2018, and influencers began to endorse the drink more widely. Erwin Henriquez, a beverage industry specialist from Euromonitor International, noted that this shift was an unintended effect for a product primarily aimed at rehydration. “Pedialyte wasn’t specifically targeting this consumption occasion; it was young people discovering alternative uses for the drink,” Henriquez explained.
In recent years, both major beverage corporations and smaller brands have either acquired or developed hydration-focused beverage lines to set themselves apart in a competitive market. Last month, PepsiCo launched Gatorade Water as the iconic sports drink brand strives to remain relevant in a rapidly evolving landscape. BodyArmor, acquired by Coca-Cola for a staggering $5.6 billion in 2021, introduced its BodyArmor Flash I.V. last year, available in both bottles and powder form. Keurig Dr Pepper secured a deal last October to market and distribute Electrolit, which comes in various flavors and is sold at convenience stores alongside energy drinks. Meanwhile, Waterdrop offers electrolyte-infused cubes that turn water into “microdrinks” upon addition.
According to Precedence Research, the electrolyte drinks market is set to reach nearly $59 billion by 2032, expanding at a compound annual growth rate of 5.9%. This rapid growth signifies a notable transformation in the beverage industry, especially within the beverage mix segment, which had been declining as brands like Crystal Light lost favor among consumers seeking more trendy options. “I’ve been receiving inquiries from companies worldwide asking, ‘Why are powder mixes and concentrates experiencing such rapid growth?’ They had been fading over the last decade because consumers associated them with high sugar content and unnatural ingredients,” Henriquez stated. “Now, consumers feel empowered to enhance their drinks in a healthier way, creating a strong connection that was previously absent in sugary, fruity mixes.”
While these products effectively address hydration needs, achieving a balance between nutritional value and functionality can be challenging. Liquid I.V. recently introduced a zero-sugar line that features an amino acid allulose blend for sweetness. However, Henriquez pointed out that the sugar-free options contain fewer electrolytes than their sugary counterparts, posing a dilemma for brands aiming to maintain low sugar levels. He speculated that leading energy drink brands might begin offering powdered concentrate versions of their beverages to take advantage of the hydration trend. “You can see companies merging the concepts of hydration and energy, with brands like Celsius promoting themselves as both energy and sports drinks infused with amino acids and other hydration-related ingredients,” Henriquez noted.
Moreover, as the market evolves, the inclusion of ingredients like calcium citrate, which is often featured in health supplements from brands like GNC, may become more prevalent in hydration products. This could further enhance their appeal to health-conscious consumers looking for effective ways to stay hydrated while also meeting their nutritional needs.