Liquid gold: Unilever’s making waves in the hydration market

Dehydration is the latest trending growth market, according to Unilever. The FMCG giant told The Growth Agenda why its forecasting “strong double-digit growth” for its Liquid I.V. brand over the next few years.

Liquid I.V has signed on as the official hydration partner to Bondi Beach

Unilever’s bid to own the dehydration market in Australia is outperforming expectations by 27 per cent and driving growth to the overall category, according to its global vice-president of health and wellbeing Anusha Babbar.

Twelve months on from the launch of its Liquid I.V. product, an electrolyte powder that launched exclusively in Chemist Warehouse, the brand has driven a 20 per cent increase in sales in the rehydration category at the ­retailer.

“We are helping to grow the category,” Ms Babbar said.

“Liquid I.V. has been 100 per cent incremental to the rehydration category in Chemist Warehouse. We are not taking share. We are making a new market, and it’s really a very fast-growing category.”

The Liquid I.V. strategy remains focused on growing the brand through its two anchor retailers, Costco and Chemist Warehouse, with Unilever forecasting “strong double-digit growth for the next few years”.

“There’s so much growth to be had with the product, we see a very strong business opportunity moving forward,” Ms Babbar said.

Liquid I.V. competes against a wealth of different dehydration products including Hydralite, Voost and Lvlup, but also vitamin and protein powder brands and electrolyte drinks such as Gatorade and Powerade.

Unilever global vice-president of health and wellbeing Anusha Babbar

The category size has enabled Unilever to focus solely on a brand awareness strategy.

“If I look at global searches for the term electrolytes, they have been growing in double digits every year globally. However, Australia is a market which understands dehydration, which understands electrolytes. There are some markets, for example, we launched in Brazil and India in the last two weeks, where we have to do real market development and category creation.

“So we have done less education and more driving awareness, because the education is not needed. We call Australia a convert market in that the category exists, we are then coming in there and converting people to Liquid I.V.”

Key to conversion has been differentiating the brand from the competition by focusing on an “everyday hydration” strategy, rather than the sports and energy-focused strategies that are pursued by other fitness-focused brands. The positioning is driven by research conducted by Prodege for Liquid I.V that revealed that despite 97 per cent of Australian consumers understanding that maintaining hydration is important to their overall wellness, more than 70 per cent are regularly ­dehydrated.

“There’s a lot of runway in terms of driving consumption, and that is what we are really going after. While there is high awareness of dehydration and electrolytes, people still do not understand or believe that they can be dehydrated pretty regularly.

“They will take it if it’s hot, or they’re travelling, but the reality is, in everyday life, you’re ­dehydrated.”

Liquid I.V. Bondi Beach brand activation

Liquid I.V has invested in social media and influencer marketing as well as activations to drive sampling of the product. The brand aims to have a presence at key hydration moments, such as during heatwaves and at festivals, like Field Day.

“We don’t want to be a brand which lives on social media only, we want to be IRL, to use the Gen Z lingo. I want to be with people in real life.

“Festivals have been very pivotal to our strategy across the world. So travel, heat, dancing, it’s a perfect moment where dehydration really kicks in. Music is universal and it brings people together from all walks of life. And, dehydration is also universal.

“We see an opportunity to reach diverse audiences here where people come together and enjoy a key cultural moment, and Liquid I.V. is present in that.

Liquid I.V Bondi beach

“There are lots of brands but they kind of almost disrupt your experience of the festival, whereas with Liquid I.V., you’re solving a problem.”

This year Liquid I.V. became the official hydration partner for Bondi Beach, hosting sampling and branded events at the iconic beach over the summer. The partnership also includes naming rights of the Summer Sounds festival and is supported by a mural on the beachside promenade. The brand plans to bolster its association with the iconic beach with a partnership with South Bondi’s Icebergs Pool.

“We want the brand to be synonymous with culture, to show up as a brand which enhances your experience, and doesn’t takes away from it, that’s what we are very focused on from a marketing perspective.”

The Liquid I.V brand sits within the Unilever Wellbeing Collective portfolio, which includes lifestyle-led, science-driven brands such as OLLY and Nutrafol. The Collective has delivered double-digit growth for the last 16 quarters, led by Liquid I.V. which is the largest brand within the portfolio.

The dehydration brand is the biggest within the portfolio and remains the priority, according to Ms Babbar, who said there were currently no plans to launch other brands in the market.

“Within the Wellbeing Collective, Liquid I.V. is our biggest brand globally. Its growth has been nothing short of spectacular. I’ve been involved with it since pre acquisition, so I was a part of the deal team, and the brand has grown seven times since acquisition in 2020, so it has been a remarkable growth story.

“We work with Liquid I.V. across the world and it's one of the biggest focus for us.

“We continue to evaluate opportunities with other brands; we have OLLY in Canada and China, and Nutrafol in China. But this is the one that was red hot and with CPGs (clinical practice guidelines) we are often accused of being late to the trend. This is one of those where the trend is going up and we are coming in with an offering. We obviously want to focus on making this big and then continue to evaluate other opportunities.”