As consumer demand for hydration options continues to rise, a seven-year-old Austrian company is seizing the opportunity by focusing on compact solutions. Waterdrop offers “microdrink” hydration cubes with zero sugar that can easily dissolve in reusable water containers, appealing to Gen Z and other environmentally conscious consumers looking to enhance their health. The company made its European debut in 2019 and entered the U.S. market in 2021. In 2022, it secured $70 million in funding and expanded its product line to include bottles in various sizes suitable for both hot and cold liquids.
Waterdrop’s CEO, Martin Donald Murray, explained to Food Dive that the company’s inception stemmed from a desire to move away from conventional “sugar water in plastic bottles.” “Shipping liquids around the world only to consume them and dispose of the packaging is illogical,” Murray stated in an interview. He anticipates that over the next decade, more consumers will shift away from soft drinks in plastic bottles, embracing reusable containers and mixes instead, ultimately eliminating the need to transport bottled beverages to retailers. “Our core belief is that water filtration will see significant growth, and the concept of filtering your own tap water at home or in the office will become increasingly commonplace, allowing for more enjoyable and functional hydration options,” Murray added.
The microdrinks are packaged in small, recyclable containers, with Waterdrop highlighting that the cap of a typical soda bottle is equivalent to ten Waterdrop cubes. Following the success of its microdrinks and expansion into major retailers like Target, Waterdrop has introduced variations of its original products, such as Microlyte, which contains electrolytes, and Microenergy, which includes natural caffeine. These products come in various flavors, including Cola, Iced Tea, and Mango Prickly Pear.
While the majority of its sales are generated through e-commerce platforms, the company is also increasing its presence in physical retail locations. Waterdrop opened its first U.S. store in 2021 and now operates seven locations nationwide, with a total of 42 stores globally. Murray noted that these physical locations help the company gather valuable consumer data regarding product preferences. “Having an offline presence allows customers to browse, test, and try our products, which builds trust,” he explained. “The interplay between offline and online shopping is crucial, as customers appreciate the opportunity to experience products firsthand and engage with staff face-to-face.”
The electrolyte drink market is experiencing significant growth, with a projected compound annual growth rate of 5.9% through 2032, according to Precedence Research. Last year, Waterdrop reported over $100 million in annual revenue. Competing hydration brands such as Unilever’s Liquid I.V. and Coca-Cola’s BodyArmor are also finding success with powdered products. Murray emphasized that Waterdrop’s innovation will focus on its unique cubed format while incorporating healthier ingredients, including vitamins and chewable calcium citrate with D3.
“A cube represents a considerable shift away from traditional syrups laden with preservatives and poor packaging,” Murray remarked. To enhance brand visibility in the beverage industry, Waterdrop has partnered with tennis star Novak Djokovic and the ATP Tour. The recent viral trend of water bottles from brands like Stanley and Owala, driven by Gen Z consumers on TikTok, has positioned these products as top holiday gifts. Murray believes this market is poised for further growth, and Waterdrop’s formulations are capable of competing with leading brands. “While there are numerous water bottles available, few brands create truly exceptional options,” he said. “It took us six years to achieve a quality standard we are proud of, and finding the right technology for portability is no easy feat.”