Social media and GLP-1s are spurring increased interest in hydration products, and companies are responding with things like electrolyte mixes and 'hydrating hot chocolate'
Companies are spending big money to develop trendy alternatives to water.
Thanks to social media and modern health crazes, hydration is no longer about just drinking water - and that has kicked off a corporate rush to develop and market more sophisticated drinks.
Companies like PepsiCo $(PEP)$, Unilever $(UL)$ and Kraft Heinz $(KHC)$ are now talking about "functional hydration," a term used to refer to drinks like Gatorade and coconut water that offer electrolytes or health benefits beyond basic survival. As consumers pay more attention to wellness, companies are taking drinks that once targeted athletes and marketing them as beverages for everyday life.
As with other recent trends around protein and fiber, the collective interest in elevated hydration partly stems from social media. Increased use of GLP-1 weight-loss drugs, which can raise the risk of dehydration, is also a factor.
Heightened consumer interest in hydration products has given companies a bigger opportunity to sell not just drinks, but things like powders and tablets that also pack an electrolyte boost, according to Jennifer Hirschfeld, director of marketing at BevSource, a firm that helps brands develop ideas for beverages.
It also gives food and beverage giants something positive to talk about "at a time when their core business is under pressure," she noted.
For instance, PepsiCo's results on Thursday showed sluggish demand for snacks. But on its earnings call, CEO Ramon Laguarta said he felt "good about the functional hydration" side of the business. The company in April announced a revamp of Gatorade, as well as a rollout of new beverages with more electrolytes, lower sugar and fewer artificial colors.
The move, PepsiCo said in a release, was intended to extend Gatorade "beyond sport occasions" and into "everyday moments where hydration is often overlooked." It also said that "mild to moderate dehydration can build gradually across the day for most people, often without realizing it, and thirst is not always a reliable signal."
Elsewhere, Unilever last month talked up Liquid I.V., a maker of electrolyte-drink mixes that it bought in 2020. The company also markets "hydrating hot chocolate," which it said was an instant sellout and represents an effort to "de-seasonalize" the broader hydration business, which has historically been geared toward hot weather and athletic activity.
Sales at Vita Coco $(COCO)$, a large producer of coconut water, jumped 18% last year to around $610 million. Even Yeti $(YETI)$, which makes coolers, tumblers, water bottles and other drinkware, called out "sports hydration" as a sales driver last month.
Kraft Heinz, meanwhile, in April launched a Capri Sun drink with electrolytes intended for children. At a conference last month, Kraft Heinz CEO Steve Cahillane said the drink was for "the mom and dad who's shopping for their child and doesn't want perhaps all the sugar of a sports drink, but they want something that they trust and it's got electrolytes." That was after Cahillane in May said "we really like our brands in this space. "
The trend has also benefited plain old "hydration" as well.
"We compete in an attractive category and continue to benefit from strong tailwinds in health and wellness and hydration," Eric Foss, the CEO of Primo Brands (PRMB), the maker of Poland Springs and Saratoga bottled water, said on the company's earnings call in May. "It's highly penetrated, frequently purchased and among the fastest-growing categories within liquid refreshment beverages."
Electrolytes are electrically charged minerals like sodium, potassium and magnesium that are important for muscle function and hydration balance, and they're found in many different kinds of food. They became a bigger selling point for beverages after Gatorade, launched in the 1960s, and Powerade, launched in the 1980s, marketed them as a something that could help athletes rehydrate.
In the decades that followed, beverage makers began to make electrolyte drinks targeted more toward specific needs, said Kyra Appleby, manager of applications and marketing at iTi Tropicals, a supplier of tropical-fruit juices and coconut water. The early 2000s saw the arrival of coconut water, once seen as way to use up a byproduct from coconut cream that caught on years later. Low-calorie lines of Gatorade appeared after that, while the 2010s saw the rise of premium beverages. Products like Pedialyte, Bodyarmor, powders, powder sticks and zero-sugar drinks followed.
"People started looking at lifestyle differences in these beverages," Appleby said. "They started thinking ... 'How can this product be more than just helping me replenish electrolytes that I've lost during exercise? Are other areas where we can start using it?'"
U.S. sports-drink sales totaled $10.2 billion for the 12 months that ended June 27, according to Nielsen data, up around 1% from the previous year. Within that, zero-sugar sports drinks had sales of $2.1 billion, a 4% year-over-year gain.
But as with protein, the functional hydration market is getting overrun by smaller brands that can be tough to tell apart. Jostein Solheim, the CEO of Unilever's health and well-being segment, said last month that he'd "seen more than 300 competitors enter into the functional hydration space" recently.
"However, this is not an easy game to play, and a lot of these products are inferior," he added.
As with whey protein, the beverage space has faced shortages over the past year, particularly when it comes to coconuts. Appleby said a coconut shortage several months ago drove up prices due to record demand and extreme weather that disrupted supplies. That stretch, she said, prompted some customers to consider ways to cut costs, including by staying away from coconut water. Tariffs have also driven prices higher.
Sugar is often added to drinks for mouthfeel and to cover up the off-putting tastes of functional ingredients. But as sugarless drinks become more popular, producers will have to find other ways to to block the flavors people might not like. They could encounter challenges around formulation, production and taste as they try to pack more functional ingredients into one bottle.
Experts, however, advise moderation - saying that regular old water and a balanced diet generally suffice against a backdrop of wellness shortcuts and health hacks.
"It's really only in the case that you're an elite athlete who's doing very high-intensity exercise for at least an hour, or doing work out in a very hot environment where you're sweating a lot, where electrolyte supplements can really have any kind of a benefit at all," said Sara Rosenkranz, a professor of kinesiology and nutrition sciences at the University of Nevada, Las Vegas.
Many hydration products promise a rush of electrolytes, but Rosenkranz noted that many Americans already get far too much sodium from ultraprocessed foods. Higher sodium can raise blood pressure, while too much magnesium can cause cramping and diarrhea.
"I kind of separate in my mind this idea of what the demand is versus what the actual need is," she said. "And they're not the same."
-Bill Peters
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(END) Dow Jones Newswires
July 11, 2026 08:00 ET (12:00 GMT)
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