The Conversation (0)
Hydralyte International (ASX:HPC) is a rapid hydration solutions business with a solid manufacturing base and supply chain focused on the large North American and European markets. The company recently surpassed US$10.4 million in 12-month trailing revenue with a gross margin of a staggering 58 percent during Q3 FY23 delivering strong revenue of US$2.6 million in Q3 2023.
Hydralyte rapid rehydration product was also the number one SKU in the hydration category on Amazon Prime Day in Canada. Hydralyte delivered ~US$140,000 in gross sales over 48 hours – which has underpinned a strong ecommerce sales pipeline in the recent months.
Hydralyte is available in three forms: ready-to-drink, tablet and dissolvable powder stick. All three are widely accepted in the medical community. Hydralyte is also frequently used by professional athletes as an alternative to sports drinks.
Made from all-natural ingredients, it contains the precise ratio of glucose and electrolytes necessary to rehydrate. Its innovative formula contains up to 75 percent less sugar and four times more electrolytes than the majority of sports drinks.
Company Highlights
- Hydralyte International is a rapid hydration drink business with a focus on North America and established supply chains in both the United States and Canada.
- The company's 2023 financials are incredibly promising:
- Trailing 12 months revenue of US$10.4 million in Q3 FY23
- 58 percent gross margin in Q3 2023
- Cash burn reduction of 47 percent on PCP to US$1.46 million in Q3 FY22, with initiatives in place expected to reduce this further
- US$140,000 in gross sales from Amazon Prime Day in July.
- Although Hydralyte recently reduced its marketing expenditure, it still experienced strong revenue growth throughout the first three quarters of 2023, driven by ongoing eCommerce sales, an established brick-and-mortar footprint, new SKU additions and a partnership with leading entrepreneur and actress, Shay Mitchell.
- The United Kingdom represents an international expansion opportunity for Hydralyte, with products being sold on Amazon UK and appearing on store shelves in Whole Foods and Chemist Warehouse.
- Agreement with specialist e-commerce company RooLife Group Limited (ASX: RLG) to exclusively market, sell and distribute Hydralyte products in China
- Appointed leading health and wellness products broker LeBeau Excel as its new sales broker, giving Hydralyte the ability to significantly expand its footprint in the Canadian market.
- In addition to a solid manufacturing base and supply chain, Hydralyte is supported by leaders with decades of experience in health and wellness.
- Hydralyte products are widely accepted in both the medical and athletic communities. As a result, the company is extremely well-positioned to leverage the fast-growing electrolyte hydration drinks market.
This Hydralyte International profile is part of a paid investor education campaign.*
Click here to connect with Hydralyte International (ASX:HPC) to receive an Investor Presentation
HPC:AU
Hydralyte International
Overview
Hydralyte International (ASX:HPC) is an ASX-listed rapid hydration solutions business focused on the lucrative North American market. With an established supply chain in Canada and the United States, the company consolidated its market position in FY23 with a 10 percent increase in net sales to $10 million. The impressive increase in group sales was achieved with a disciplined cost focus which flowed through to a significant US$5.7 million in cash savings. And there was ongoing momentum in the first quarter of FY24, with consistent growth in net sales to US$2.17 million on strong gross margins of 56 percent.
Hydralyte’s multi-channel distribution strategy includes a targeted growth through ecommerce. Its rapid rehydration product has been the number one SKU in the hydration category on Amazon Prime Day in Canada, where it's the number two hydration brand overall with a 21 percent market share. Starting on Prime Day, Hydralyte delivered ~US$140,000 in gross sales over 48 hours.
It's also worth noting that all this revenue growth – alongside a partnership with Shay Mitchell – occurred with an ongoing reduction in marketing expenditure. In 2024, marketing costs as a percentage of net revenue decreased to 37 percent from 48 percent in Q1 2023. This is due in part to the company's solid leadership team, featuring professionals with decades of expertise in health and wellness, as well as heavy brand investments which have been made throughout 2022.
In Australia, New Zealand and parts of Southeast Asia, Prestige Consumer Healthcare (NYSE:PBH) holds the exclusive sales and distribution rights to Hydralyte products. PBH is an American over-the-counter healthcare marketing and distribution company, dating back more than 100 years.
Hydralyte International's robust supply chain, sales trajectory, manufacturing approach and product strategy are far from the only reasons it shows such promise as an investment. Current market trends also significantly favor the company's core value proposition. Valued at US$1.68 billion in 2023, the global electrolyte hydration drinks market is expected to reach US$2.78 billion by 2033 as consumers turn away from high-sugar, low-electrolyte drinks and towards more clinical hydration products.
Roughly 75 percent of Americans are dehydrated at any given time. The reasons are many and varied, ranging from travel and exercise to alcohol and illness. Its symptoms are something many of us have simply learned to live with – irritability, brain fog, dizziness, increased thirst, dry mouth and fatigue, to name just a few.
Hydralyte fits the bill perfectly for these consumers. Founded with the goal of making a difference through better hydration, Hydralyte is able to treat dehydration more effectively than the majority of sports drinks on the market. Thanks to its proprietary formula – which uses a precise ratio of water, electrolytes and glucose based on the World Health Organization's recommended formula for rapid rehydration.
Hydralyte is available in three forms: ready-to-drink, tablet and dissolvable powder stick. All three are widely accepted in the medical community. Hydralyte is also frequently used by professional athletes as an alternative to sports drinks.
In short, thanks to its market position, strong leadership and science-based formula, Hydralyte represents the perfect opportunity for investors to enter the lifestyle sports market.
Get access to more exclusive Biotech Investing Stock profiles here
Leveraging a Rapidly Expanding Hydration Market in North America
