Celebrities have a lot of pull with people. Add to that the human tendency to fall sick as soon as the weather changes, and you have a marketing strategy that makes itself.
Making the most of that, in January 2023, the drinks company (or hydration pharmaceuticals company, as it likes to call itself) Hydralyte (ASX: HPC) reported $1.45 million in unaudited monthly net sales. It represents a 70% increase from around $846k in Jan 2022 and a historic milestone.
This growth was underpinned by solid demand from Canadian retailers that replenished stock following an unseasonable sales spike in December 2022. Plus, marketing initiatives with brand ambassador Shay Mitchell in the US and higher demand due to the cold and flu season in Canada gave Hydralyte a leg up.
The Company launched a co-branded product with the Pretty Little Liars actress Shay Mitchell on December 2, 2022, to leverage her social media, like her following of 35.5 million on Instagram. It spent over $350k on this campaign.
Hydralyte North America CEO, Oliver Baker, said, “Achieving our highest-ever sales month since inception is a result of the strong foundations laid throughout FY2022 across manufacturing, distribution and brand marketing in the North American market.
“The alignment of these objectives has resulted in significant brand awareness for Hydralyte North America’s leading product range, complemented by an advanced logistics network that has the flexibility and capacity to scale quickly and meet increased demand.”
Created in 2001 as a clinical solution, Hydralyte calls itself a “hydration accelerator”, a cross between a juice and an electrolytes rehydration drink. From its marketing, it is an excellent solution for both the flu and a hangover.
It is pretty popular during the North American summers, with June 2022 beings the Company’s previous record month. Fewer people reach out for an energy drink or a non-alcoholic cold one when winters come around. However, things were different this time for Hydralyte.
Baker shared, “Pleasingly, the sales result comes during the North American winter, which is traditionally a lower growth period and in turn reflects the increased traction for Hydralyte products in key target markets. Further, January sales were achieved through organic growth during a period where the Company is strategically reducing its digital marketing spend. This result sets the Company up for a strong year of growth in 2023 in one of the world’s most dynamic consumer markets.”
In Q4 FY22, the Company recorded a total revenue of $3.65 million, a 45% increase on the previous period as it defied the seasonal downturn. Its e-commerce arm, especially Amazon USA, played a significant role in propelling its earnings, with quarterly sales up 32% on the platform. That said, Hydralyte did go big on its marketing, spending nearly $3 million on its initiatives, up from $144k in the previous quarter.
During this quarter, it plans on optimising its marketing strategies with a focus on organic growth. This is expected to result in decreased marketing spend for the quarter and, in turn, reduced overall cash expenditure. It will also allow the Company to invest in higher-impact marketing initiatives during the peak North American summer months.
Having secured a $12 million loan and having over $7 million in the bank, Hydralyte seems poised for growth in FY23.
Alinda is a Business Reporter for The Sentiment
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