How America’s Hydration Obsession Turned Into a $1.5 Billion Industry

“A majority of consumers, Americans and people around the world are chronically dehydrated,” he told CNN News. “They just don’t know it.”

Even if consumers don’t know if they’re actually suffering from a lack of fluids, they’re still buying electrolyte-filled products like they are. Liquid I.V. has become one of the biggest brands to capitalize on hydration, part of the overall “better for you” wellness trend that’s been percolating within the food and beverage industry over the past several years.

Hydration, in particular, has been at the center of social media trends — like #WaterTok on TikTok — and buzzy viral products with analysts projecting it growing into a multibillion-dollar market in the next few years.

“The category has benefited from changing consumption patterns. It’s no longer just about sports recovery, but about maintaining daily wellness, and managing hangovers,” Nate Rosen, a consumer packaged goods expert, told. “A lot of people simply don’t like plain water and really treat these hydration drinks as a way to flavor their water.”

Liquid I.V. launched in 2012, initially targeted toward hardcore athletes recovering from a tough workout. The flavored powder mix is marketed as a healthier alternative to sugar-filled sports drinks, with the potion containing salt, vitamins and electrolytes that support rapid hydration.

“The category has been really tired and dusty,” Keech said. “Before, it was a sports person who was sponsored and the idea was, ‘If it’s good enough for them, then it’s good enough for me.’”

That was initially a successful proposition and sales soared, prompting Unilever to buy Liquid I.V. for an undisclosed price in 2020.

Under Keech, who became CEO of Liquid I.V. following the acquisition, the brand and his team broadened its “positioning it to a much wider audience,” shifting from just sports stars to “the business person, the mom and the gym bunny.”

From there, the brand’s distribution doubled and the product has expanded the number of flavors, including a viral firecracker blend, as well as a new sugar-free selection. Liquid I.V. is on track to becoming a $1 billion unit with Unilever labeling it a “power brand” in its most recent earnings report, which has helped its wellbeing category achieve double-digit sales growth.

“We recognized that hydration is just not for athletes,” Keech said. “That’s where lift-off happened.”

Powder power

Hydration has largely been dominated for years by liquids, notably Pedialyte, which is commonly used to prevent or treat dehydration in children. But the drink grew in popularity through the mid-2010s as young people used it as a hangover cure and athletes drank it for recovery.

Then there’s PepsiCo’s Gatorade, which holds a commanding lead in the sports drink category, plus Mexico-based Electrolit, which is investing $400 million in a new US plant to meet growing demand.

However, powders have recently become a “success story,” according to Howard Telford, head of soft drinks for analytics company Euromonitor.

“The big thing is convenience: It’s something that you can have on the kitchen counter, desk drawer at work or in the gym bag. There’s no bulky purchase where you have to allocate space to it in your fridge,” he told. “The flavor profiles are also pretty good for Liquid I.V. as well, which is not nothing.”

Keech also credits the convenience factor for Liquid I.V.’s growth, pointing toward festival-goers at Coachella, which it sponsors, as an example.

“You can’t just rock out with all sorts of water bottles,” he said. “That’s helps us hydrate people in ways others can’t.”

Sales of powdered mixes has achieved double-digit sales growth for the past four consecutive years, most recently growing 20% in 2024, ballooning into a $1.5 billion category, according to Circana, a Chicago-based market research firm.

The growth has sparked new entrants for portable mixes ranging from Gatorade, who’s sales of enhancers has grown 200% over the last four years, and Coca-Cola’s BodyArmor to smaller startups like diet-friendly LMNT and the Novak Djokovic-backed Waterdrop — all in hopes of emulating market leader Liquid I.V.’s popularity.

“When one brand achieves significant traction in a space, numerous fast followers emerge, especially when the original doesn’t own anything truly proprietary beyond a great name,” said Rosen, who writes the Express Checkout newsletter. “After all, anyone can produce an electrolyte powder.”

BodyArmor, which recently relaunched its entire line, has seen a bright spot in growth with its Flash I.V. hydration drinks and powders. Both products generated $120 million in sales in its first year.

The space “saw a big jump in consumption during Covid because people started to realize how important hydration was. There’s also a very heightened sense for longevity as a well, immunity and also overall addition of vitamins into your body,” BodyArmor CEO Federico Muyshondt told CNN News.

Does it work?

Liquid I.V. is “obsessed with science,” Keech said, adding that it spends a “very significant amount of money on clinical studies to make sure that we can stand by the claims we make.”

A page on Liquid I.V.’s website claims its product has “superior hydration” compared to simply drinking water, proclaiming that if you’re thirsty “then you already may be dehydrated.”

However, Heidi Skolnik, a senior sports nutritionist at the Hospital for Special Surgery in New York, is skeptical that dehydration is a common problem for people with unrestricted water access and that people being “chronically dehydrated is probably an overstatement.”

“Athletes and active people can benefit from using electrolyte powder and drinks,” she told The Budgets, but “less active people probably do not need them.”

Although water itself is sufficient for hydrating the average person, she said flavoring it “helps people drink more, so that is a positive and it elevates their awareness of what and how much they are drinking.”