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As more consumers seek out hydration options, a seven-year-old Austrian company is looking to capitalize on the trend by thinking small.
Waterdrop is selling “microdrink” hydration cubes with zero sugar that can dissolve in reusable water containers, making them a popular option for Gen Z and other consumers interested in reducing their environmental footprint and improving their health.
The company first entered the European market in 2019 before a 2021 U.S. launch. In 2022, it raised $70 million in a funding round. It also sells bottles in an array of formats and sizes that can be used to store any liquid hot or cold.
Waterdrop CEO Martin Donald Murray told Food Dive that the genesis of the company came from the desire to look beyond the traditional “sugar water in plastic bottles.”
“Putting liquids into bottles, shipping them around the planet, drinking them and disposing of them doesn’t make any sense,” Murray said in an interview.
He predicts during the next 10 years that more consumers will move away from soft drinks in plastic bottles. At the same time, consumer interest in using their own bottles and mixes will become common, and eventually shipping bottles of beverages to stores will no longer be needed.
“Our core thesis is that water filtration is going to grow massively, and that idea of filtering your own tap water at home or at the office is going to become much more omnipresent, which then you can make more palatable or functional,” Murray said.
Its microdrinks are packaged in small containers that the company said are recyclable. Waterdrop noted that the cap of one traditional soda bottle is the equivalent of ten Waterdrop cubes.
After the success of the microdrinks and its expansion into big box retailers like Target, Waterdrop has since expanded into variations of its original products: Microlyte, containing electrolytes, and Microenergy, containing natural caffeine. The offerings are available in a range of tastes, from Cola to Iced Tea to Mango Prickly Pear flavors.
Leaning into retail
While it is achieving the largest portion of its sales on e-commerce platforms, the company also is leaning heavily into brick-and-mortar retail locations.
In 2021, Waterdrop launched its first physical location in the U.S. and now has seven across the country, with 42 total locations globally. Murray said the stores help the company gather consumer data about which products are resonating.
“Having an offline presence allows customers to browse to test and try, and also gives a lot of trust,” Murray said. “The interplay between offline and online is important because customers want to experience things. They want to go to a nice store and speak to somebody face-to-face.”