Co-founder and CEO Danny Noall sees a path to continued growth by manufacturing innovative hydration systems in-house and expanding distribution.
“We’re solving water boredom and lack of absorption,” says Noall of Infuze Hydration‘s products.
Infuze is one of a few companies currently in what Noall calls the “direct flavor” space. That’s the ability to control how much flavor or electrolyte is in a sports beverage on the fly. Essentially, it’s like going to a soda fountain and reducing the sweetness of a soda by adding more seltzer water to the drink.
Infuze’s patented system is currently available as a bottle system using the Infuze Lid and as an inline drop-in for a hydration system, like a CamelBak bladder, via the Hydro product. It uses the Venturi effect to mix in flavor from a reservoir filled with a concentrated liquid drink mix, like Infuze’s Elixirs.
Users can choose to drink water or the flavored beverage from one container, eliminating the need to carry multiple beverage containers while exercising, hiking or doing other activities. They can also choose how much electrolyte or flavor they want in the drink by dialing the flavor in to the level of their liking.
The idea came about when Noall got dehydrated on a backpacking trip with co-founder Rick Corbridge. The water they found didn’t taste very good, so they added liquid and powdered flavoring into their hydration bladders. “We were now stuck with 100 ounces of fruit punch, which wasn’t nearly as delicious as it sounded,” says Noall. “It stained the reservoir, so it tasted like fruit punch for the rest of our use of that product.”
He continues, “On the hike out, we said, ‘Why couldn’t we just have something where you could push a button and get flavor when you want it or get water when you wanted it?’ That was the origin of the idea.”
That was in 2015, but the product didn’t hit the market until 2019. “Little did we know, we were going to have to overcome some pretty intense engineering issues,” Noall notes. “Just to make the system, we had to custom-design 54 different parts. Each system has about 25 or 26 pieces. Combining all that together took a lot of time and then a lot of iterations to get them all perfectly synchronized.”
The company makes most of its injection-molded parts at its facilities in Utah. “We wanted a factory to do that for us but we found that there wasn’t a company willing to take a risk on us at our early stage and help us through the design and iteration process at a price that we could be happy with,” says Noall. “We realized that the plastic cost itself was really low. So we realized if we could figure out the manufacturing side at an affordable price, we knew we could scale from there.”
The first product is the Hydro, which can attach to a shoulder strap and works with hydration bladders. “As we started working on it, we realized, although that product was amazing and super useful, it was not a daily-use product, like a water bottle is. So we actually pivoted to the water bottle,” says Noall.
However, military buyers expressed interest in the Hydro. Because of the twin demands, the company developed both products almost simultaneously.
The drive to develop the water-bottle lid was fortuitous. “Probably 80-plus percent, maybe even 90 percent of our sales have been for the bottle. The use scenario is so much bigger, everyone walking around has a water bottle they’re using,” says Noall. “Unless you’re really dedicated to your hydration, you’re probably not using a hydration pack on a daily basis.”
While the Hydro was initially conceived for backpacking, Infuze is finding hikers prefer the bottle system. Mountain bikers, motorcyclists, and hunters are the main Hydro buyers.
Infuze launched in the direct-to-consumer market. “We didn’t even offer it on the retail side for almost two years,” Noall says. “In January, we started going into retail shops, we went into 20 stores, all 20 of them are repurchasing.”
The company is having some difficulty getting into larger stores since it’s a newer concept. “They don’t want to be the first test for a big-box location, but at the same time, we need a big-box location to give us a test,” Noall says. “We’re kind of carving out a new market, a new demographic that just takes a little bit of time.”
There are few competitors in the space. Gatorade has a direct flavor product, as does a company called Cirkul. Infuze recently bought and relaunched a company called LifeFuels that has an electronically controlled flavor injection system.
Noall says the lack of competition is good and bad. “If there was a little bit more competition we can leverage the education within the market. But since that education is not there it requires us to build the market and we don’t have the funding to necessarily do that,” he says.
Infuze saw rapid growth in its first two years. In 2019, it did about $600,000 in sales, and that grew to $2 million in 2020. Noall anticipates 2021 will finish flat, but tentatively forecasts sales of $5 million in 2022.
The company is also working to boost its subscriptions for its products. “We sell anywhere from 15,000 to 20,000 of our flavors per month,” says Noall. “We’re hoping to grow that subscription base this next year. We expect that to be probably 30 to 50 percent of our business next year.”
Challenges: “One of the big challenges is we need to figure out how to offset seasonality in retail,” says Noall, noting that the supplement market entry could make it more year-round.
Awareness is another: “The big hurdle we’re still up against is we are not at a critical threshold as a direct-to-flavor industry to not need to spend a lot of money on marketing.”
Opportunities: “Partnerships are going to be huge for us,” says Noall. The LifeFuels acquisition will allow the company to get into the supplement market and CBD market, as its flavor-injection technology allows for precise dosing. “That opens up partnership opportunities in a whole different way,” he says.
The military is still a potential market for the Hydro, he adds. Infuze has already fulfilled one military contract with the Utah National Guard. “Everyone we speak to with in the military are super excited about the product. They see the value of it, but it’s just on the lower end of their priority list right now.”
Needs: Infuze needs “to either sell to or partner with a company that has an existing distribution network of a million-plus users,” says Noall. “Whether that’s a subscription product, fitness product, water bottle product, it’s just somewhere where we can really leverage the synergistic side of their business.”