Hydro Flask Marketing Plan

By Sarah Field, Kate Denhart, Jack Wickline, Will Bernacchi-Sass, and Kenna Aardema

Hydro Flask is a water bottle company founded in 2009 by Travis Rosbach and Cindy Weber. The company has since been bought by Helen of Troy Unlimited. Hydro Flask is headquartered in Bend, Oregon and now offers many products besides water bottles, such as wine tumblers, cooler bags, food jars, and tote bags, amongst others. Since the firm’s inception, environmental activism and protection have been some of the brand’s core values, as seen in their brand image and mission: “Save the world from lukewarm.” This statement emphasizes the superior technology Hydro Flask’s products use to insulate beverages, as well as their overarching goal of environmental sustainability. They have expanded on this mission in recent years by creating simple, nature-inspired designs for all their products; emphasizing the products’ ability to be refilled, thus reducing plastic waste, and by creating “Parks for All”, a charitable program dedicated to preserving outdoor spaces for all to enjoy. (We are Hydro Flask, n.d.)

Analysis of Environment

Immediate Environment

Since Hydro Flask has been so successful in the reusable water bottle market, many competitors have entered the market; however, most of these companies do not match Hydro Flask’s extensive product mix of coolers, wine tumblers, and tote bags. The exception to this, and Hydro Flask’s main competitor in the market, is Yeti. While Yeti primarily specializes in coolers, they have recently begun manufacturing water bottles that use almost-identical technology to Hydro Flask’s but are more expensive. In terms of Hydro Flask’s corporate partners, the company works with firms that also value its environmentally friendly objectives and mission. For this reason, Hydro Flask generally partners with other companies and corporations centered around the outdoors and outdoor activities. Most recently, Hydro Flask sponsored the U.S Ski and Snowboard teams. This sponsorship involves all U.S ski and snowboard athletes using Hydro Flask products when they compete, further promoting and expanding the environmental message the company champions. Hydro Flask’s company capabilities are one of its greatest internal strengths, allowing for a wide variety of customization options on its products, as well as an efficient supply and distribution network for its large product mix. Looking at the physical environment, Hydro Flask prides itself on maintaining environmentally sustainable practices when procuring the inputs for, and creating, their products.

Macroenvironment

Hydro Flask’s environmental sustainability efforts reflect well on them, as the demographic and cultural segments to which they primarily market value environmentally sustainable and green practices very highly. These efforts also allowed them to spearhead the sustainability social trend, as they were a “first mover” in the wave. The technological aspect of Hydro Flask products is also one of their greatest strengths. Hydro Flask water bottles are made from double-layered stainless steel which are vacuum sealed together to create long-lasting insulation. This technology is currently the best the market has to offer, and similar products attempt to mirror this technology.

Opportunities and Threats

Hydro Flask has a couple opportunities in the form of expanding their target markets and corporate partnerships. Hydro Flask’s well-known brand name and image allow it to charge a premium price for its products. Lowering this cost would appeal to more price-sensitive consumers and allow them to break into new markets. Furthermore, Hydro Flask would greatly benefit from additional corporate and celebrity sponsorships and endorsements. Currently, Hydro Flask has essentially no cooperate partners, and growing this area would greatly increase their brand awareness. Along with these two opportunities, Hydro Flask faces the threat of competition. Companies like Yeti are creating products like Hydro Flask’s; however, they are much more durable and have a higher price tag. Swell, another competitor, creates products that are easier to hold, and Klean Kanteen creates products that have a better insulation. While Hydro Flask’s reputation and firmly established brand awareness protects them from the latter two brands, Yeti is a major threat. They are also already a very reputable and well-respected brand and could overtake Hydro Flask in the near future if they continue to offer similar product lines, and possibly lower their prices.

Market Segments

The reusable water bottle market is segmented based on demographic, psychographic, benefit, and behavioral variables.

Demographics

Reusable water bottle companies separate product offerings by age, gender, and income. Water bottles can be separated by age through color offerings, provided benefits, and intended uses. For example, most elderly people do not seek out a fuchsia water bottle, but a tween might. Similarly, people in their 30s-50s may look for a bottle that can hold their coffee during their commute, demonstrating how the intended use of a product can contribute to age segmentation. Similarly to how color options can help businesses appeal to separate age groups, they can also use them to appeal to different genders. Companies that offer more color options can appeal to multiple genders, compared to those who only offer “masculine” colors. Finally, the water bottle market is segmented by income level with cheaper options for those with lower incomes and more expensive products for those seeking a high-end, expensive product.

Psychographic

Water bottles are generally separated by lifestyle, with offerings intended for outdoorsy hikers, others for gym rats, and others still for those who live a more leisurely lifestyle. Through use of sustainable materials and hiking-based advertising campaigns, firms effectively target outdoorsy people. Similarly, an ad campaign featuring a family curling up on the couch in their pajamas would attract more leisure consumers. By targeting the way someone lives their life or who someone wants to be (i.e., a good parent who spends time watching movies with their children), water bottle companies can segment their products and target different audiences.

Benefit

Water bottle companies also separate themselves based on feature offerings like color, insulation, durability, and lid type. As mentioned above, different color offerings appeal to different groups of people, so those looking for a sleek bottle to bring to work have access to those, while children who want a fashionable bottle for soccer practice also have options. Additionally, some people may want a water bottle with little insulation so it is more lightweight, while others may not have access to ice throughout their day but want their drink to stay cold. Parents shopping for a bottle for their child may not want to pay for something long-lasting because the kid might want a completely different bottle the next year, whereas adults tend to keep their water bottles for years and therefore may want something more durable. Finally, some companies offer bottles without a lid to sip from at all, some provide magnet slider lids, and others have straw lids. Due to all these variables and consumer groups, water bottle companies must produce products that satisfy each of these desires.

Behavioral

When employing behavioral segmentation strategies, water bottle companies generally use occasion-based tactics rather than loyalty-based. Some popular occasions used are commuting to work, working out, running, tailgating, winding down at night with a glass of wine, running errands, or dinner with young children. Each of these scenarios involves a specific type of drinkware that companies have produced and marketed specifically for the activity.

Target Markets

Hydro Flask markets itself as a lifestyle brand, targeting all ages and genders of outdoor and adventure enthusiasts (We are Hydro Flask, n.d.). With bottles that range from $30 to $125, the company targets those with higher, more disposable incomes. Their targeted outdoorsy population would likely be willing to pay this price because the company created the Parks for All program that “supports nonprofit organizations focused on building, maintaining, restoring, and providing more equitable access to parks” (Parks For All, n.d.). This donation likely aligns with their core values, as they care about the environment and hope to gain access to many parks. Additionally, since the bottles are reusable and durable, they last for a long time and eliminate the need for single-use plastic water bottles, which also helps the environment. The bottle also keeps liquids cold for 12 hours, eliminating the need for a refill of ice, which appeals to those with busy schedules, whether it be at work or hiking. The plethora of color and lid-style options help the product appeal to consumers of all ages, genders, and styles. Also, the company offers many different product lines intended for different occasions including hiking, commuting to work, and lounging (Bottles, n.d.). Alongside the many design options, Hydro Flask offers a “Custom Design” feature that allows consumers to design their very own, personalized water bottle (My Hydro, n.d.). Although the primary target market is the outdoorsy, adventurous consumer, the wide array of options that Hydro Flask offers allows them to target all consumers willing to pay the comparatively high sticker price.

Positioning Strategies

The first positioning strategy that Hydro Flask has implemented from the start is their symbol: a ‘smiling stick figure’. A strong and recognizable logo or symbol can create a position for the brand that separates it from other competitors within the market. In addition, company symbols can be trademarked and legally protected by the producing company, ensuring that when a consumer sees their logo, they immediately know whose product they are viewing. Hydro Flask has cemented high brand recognition within the reusable water bottle market by producing an easily identifiable, eye-popping and friendly symbol. The second positioning strategy Hydro Flask uses is value proposition. Since Hydro Flask guarantees their insulation will keep liquids cold for 12 hours and provides lifetime warranty, they create higher value in their products, for which consumers are willing to pay. Hydro Flaks also utilizes competition in their positioning strategy. The company positions its products against specific competitors such as Yeti, Swell, and Takeya. Although most reusable water bottle companies focus on product appearance and profitability, Hydro Flask focuses on high durability and a simple design with the intent to promote environmentally friendly products. The final, and most efficient, positioning strategy used by Hydro Flask is positioning their company using “brand ambassadors such as chefs, skiers, fishers, scientists, musicians, climbers, activists, and others” (Mainwaring, 2022). As technology and social media have immensely emerged in the past decade, ‘influencer marketing’ has reached a widespread and diverse population of individuals to help promote the company’s exclusive products. Especially in this generation, followers of celebrities will often seek to emulate them by using the same items they promote.

Branding Strategies

Hydro Flask builds their brand equity through multiple channels. First, the company uses brand and line extension strategies. As a new emerging company, Hydro Flask produced only water bottles with limited sizes and colors. Once their brand awareness grew, they used brand extension to include other products like coolers, accessories, coffee mugs, outdoor kitchen items, and even a customization line for any of their products. They also extended their water bottle product line, introducing additional sizes and more than ten different interchangeable lids and caps. Hydro Flask is creating life-long loyal customers through their transparency, which also contributes to their brand equity. Additionally, their mission statement and goals are widely supported because most people want to preserve Earth and its resources for future generations. The final branding strategy Hydro Flask uses is brand licensing through their customization line. By printing various companies’ logos on their products, it allows provides Hydro Flask free advertisement to those employees.

Product Life Cycle and Key Marketing Actions

Product Life Cycle

Hydro Flask’s insulated water bottles are reaching the maturity stage. Hydro Flask started out as a small company, but by 2011, achieved $1 million in sales (Mainwaring, 2022). Once the company was acquired by Helen of Troy, Ltd. for 210 million USD in 2016, they came to lead the market as US total sales of water bottles grew by 42% to 318 million USD. While Helen of Troy does not disclose individual sales or profit data for Hydro Flask, the housewares data (which includes only Hydro Flask and one other brand) had division sales of $183.2 million dollars (Vega, 2020). This is a marked 28.2% increase from the previous year’s quarterly. The sales are reaching their peak and the company has established itself in the market, all signs of the maturity phase. The product is also identified in the maturity stage because of the number of competitors in the market. Some other brands with significant shares of the reusable water bottle market are Yeti, Takeya, and Klean Kanteen. Ultimately, the increase in houseware sales, the overall increase in the value of the reusable water bottle market, and the number of established competitors in the market provide evidence that Hydro Flask insulated water bottle products are in the maturity stage.

Key Marketing Actions

Hydro Flask, and its competitors, use a multitude of marketing strategies to extend and maintain their growth in the maturity phase. The maturity phase is characterized by the adoption of new growth strategies and fierce competition for market share (Grewal & Levy, 2023). Using a product development strategy, the firm offers different features and accessories to encourage customers to make repeat or additional purchases and to target their market more effectively. The number of niche interests that benefit from the unique features of reusable water bottles increases the potential for market growth. The continuous new products can help companies maintain or continue growing their market share in the maturity phase. Using this strategy, they can build off the existing sales trend and differentiate themselves from competitors (Grewal & Levy, 2023). Hydro Flask offers several accessories, patterns, colors, and lid-shape varieties to target their current market. The company has also engaged in a related diversification strategy. They offer insulated bags, coolers, and outdoor kitchen products to target the houseware market for sustainability-conscious, outdoor enthusiasts. Another key growth strategy that Hydro Flask has pursued more recently is market development. While the US market may be reaching maturity or saturation, companies can extend themselves to find new geographic markets. Hydro Flask has launched in Latin American countries thanks to strategic relationships with corporate partners. They launched in Uruguay at the end of 2019, in Mexico in early 2020, and most recently entered Argentina, Bolivia, and Paraguay in early 2021 (Mayer, 2021). These growth strategies, with an increased focus on marketing and promotion, are important in the maturity phase to maintain market share and oppose the intense competition.

Pricing Strategy

Hydro Flask’s marketing team prices the product to maximize profits, position themselves competitively in the market, and remain true to the company’s philosophies. The bestselling water bottle, the Wide Mouth with Straw Lid comes in 24, 32, and 40 oz sizes and is priced at $39.95, $49.95, and 54.95 respectively (Bottles, n.d.). Hydro Flask uses premium pricing for the product, coming in above Yeti’s Rambler and above Takeya as well. Hydro Flask’s price reflects its status. Where Takeya especially is known as the discount brand, Hydro Flask is known for its superior quality and commitment to its environmental/sustainability mission. This status allows the company to avoid the perception from consumers, in some cases, that low price reflects low quality. Hydro Flask employs a high/low pricing strategy. While in most cases average prices are higher than the average market price to appeal to the price-insensitive customer and protect the perception of status, the products are also occasionally listed on sale to attract more price-sensitive customers. The sale items are listed with a reference price to entice customers to make a purchase based on the comparison and increased evaluation of the deal offered. The “low” side of the pricing strategy also attracts customers due to the time-sensitive nature of the offering. A high/low pricing strategy is effective, and appropriate during the maturity phase, to attract both price-sensitive and insensitive markets while maintaining the perceived status of the product.

Promotional Tools

Hydro Flask has been marketing its products on social media since their conception. In their early days as a startup, the brand capitalized on the popular photo editing app VSCO where their water bottles became a viral sensation. By 2011, just two years after its founding, Hydro Flask made $1 million in sales, and by 2016 Helen of Troy Ltd. had purchased the company for $210 million (Mainwaring, 2022). The company’s marketing strategy has much to do with their previously mentioned brand ambassadors. Hydro Flask is also currently has partnered with the World Surf League, promoting their #RefillForGood social media campaign, encouraging customers to ditch single-use plastics and make a difference for our planet. Furthermore, Hydro Flask also partners with various nonprofits such as Girl Scouts of the US, to whom they donated a large sum of reusable insular gear during the pandemic. Overall, they have been able to support over 150 nonprofits and donate more than $2.5 million to pro-environmental causes. Each of these examples — nonprofit work, partnerships, ambassadors, and social media presence — play into the overall marketing and promotional strategies used by Hydro Flask because they create content promoting their products while also maintaining their brand identity. With the environment at the forefront of their brand, the company continually seeks to spread its green message while also promoting their products.

Effectiveness and Recommendations

Branding

Hydro Flask’s branding has been, and still is, extremely effective in its target market. Arguably, the company is not cited as a success story for their extensive product line or their innovative technology, but for their ability to turn their water bottle into a lifestyle. From their humble beginning in Bend, Oregon, to now selling products in almost all outdoor retailers across the United States, Hydro Flask utilized various branding strategies to stay up to date with their customers’ needs.

Specifically, Hydro Flask has stayed true to its brand identity as an environmentally conscious company by supporting and donating to conservation charities across the United States. Their slogan, “Let’s Go! Make Every Adventure More Awesome” aligns with their outdoor enthusiast image and adds to their overall brand and marketing strategies. Creating a clear brand image allows consumers to know what to expect when buying and interacting with Hydro Flask products, creating brand awareness for the company that adds to, and creates, value for the customer. Hydro Flask also utilizes and encourages user-generated content for their social media accounts where they use hashtags and repost customers’ pictures and content, which helps generate a sense of community and trust between the company and consumer. In our day and age, engaging with consumers online is one of the best and most effective forms of product branding (Mitchell, 2019).

In terms of branding improvement, Hydro Flask — like many other companies — had to navigate the COVID-19 pandemic and bounce back from the market hit they took. While navigating the pandemic, Hydro Flask also had to deal with the decline of the VSCO era. With the world returning to some normalcy, it is our recommendation that Hydro Flask focuses most of its branding efforts on encouraging consumers to get back outside after being stuck inside for almost two years. Specifically, we recommend they expand their selection of products, such as introducing new lid and water bottle designs. In combination with this expansion, we recommend that the company launch a series of personal stories from consumers on their social media pages. This would look like cultivating an Instagram post for one of their loyal customers about how Hydro Flask products have impacted them and how they utilize the products in their everyday life. This campaign would help create a deeper sense of community and allow consumers to see specific examples of satisfied customers using Hydro Flask products.

Pricing

Hydro Flask charges a premium price due to its quality products and its position in the market. Their prices for normal water bottles range from $30 to $60, with their largest and most expensive water bottle costing almost $125 and holding 128 ounces of liquid. Hydro Flasks’ biggest competitors are Yeti, Swell, and Klean Kanteen, amongst others. The standard-size, “everyday” water bottle from each of these brands ranges from 32oz to 36oz. For their 36-ounce bottle, Yeti charges $50 and for Klean Kanteen’s 32-ounce water bottle they charge about $45. Comparatively, Hydro Flask charges $49.95 for their 32-ounce bottle. Hydro Flask, along with its competitors, charges high prices that are not suitable for all consumers’ budgets. Considering their target market primarily includes individuals with disposable income, they can charge premium prices for their stainless steel, insulated products. In terms of cost of production, Hydro Flask manufactures its products in China, the cost of production is about $4-$5 per water bottle, depending on the design, which equates to about 10% of the price consumers pay (Ecoway Houseware Limited, 2022).

We recommend Hydro Flask implement more discount pricing strategies to increase revenue. Specifically, for the holiday season, we recommend that they run a ‘buy one get one half off’ campaign to pull in more consumers and persuade them to buy more during the gift-giving season. Furthermore, we think that lowering the prices of their products by two to three dollars may help pull more customers to purchase their products. Since Hydro Flask was one of the first to market, has sleek colors and designs, and offers high-quality products they can charge premium prices. However, now that there are more competitors charging similar rates for similar products, we recommend Hydro Flask lower theirs slightly to include lower socio-economic brackets.

Promotions

Hydro Flask offers a few promotions on its website and social media pages. They have a sale section on their website that includes many of their older products and colors at discounted rates, and they offer 10% off and free shipping when you sign up for their newsletter. Overall, the brand does not offer many discount codes or promotional sales; however, they do effectively promote their brand online. They are very active on social media sites like Instagram and Twitter.

As we mentioned above, we recommend Hydro Flask promote a holiday ‘buy one get one half off’ sale to encourage consumer purchases. In addition to this, we recommend that Hydro Flask offer discount pricing to customers that prove that they align with the environmentally friendly brand image. This could look like a wide array of things: Hydro Flask could run its own campaign saying “whoever does X (e.g., plant a certain number of trees or pick up a certain weight in garbage) and documents it through the company (i.e., with pictures or through a sponsored event with one of their partners) then those customers will receive a discounted price for X amount of time on any Hydro Flask products. This strategy would help further solidify the company’s brand image, target customers with similar values, do good for the environment, and potentially boost sales and brand awareness. Another promotion we think Hydro Flask should implement is a back-to-school student discount code. Highschool and college students are in their target market and use water bottles for school, so providing a student discount code would boost purchases in the fall and potentially develop loyal customers at a young age.

References

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Mayer, L. (2021). Hydro Flask Expands Global Presence with Distribution in Latin America. Outdoor Industry Association. https://outdoorindustry.org/press-release/hydro-flask-expands-global-presence-with-distribution-in-latin-america-2/

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