- Flavored water company Hint, Inc., closed a $25 million Series D financing round led by Springboard Growth Capital with participation from Philippe Laffont, Linnea Roberts’ Gingerbread Capital and Emiliano Román’s Medina Heights Capital Partners.
- Funds from this investment will be funneled toward continuing to grow sales on online and in brick-and-mortar retailers to expand the brand’s footprint, which is already available in 30,000 locations.
- Already this year, online sales have more than doubled and now account for about 60% of sales, the company said in the release. Retail sales have grown 80% in the past 52 weeks, making the California-based company the fastest growing still flavored water according to SPINS data cited by Hint.
Hint has been on a growth trajectory since its founding 15 years ago, but the onset of the COVID-19 pandemic has only further amplified its success. Beyond its growth through its direct-to-consumer sales channel on its site, industry publication Chief Executive reported Hint signed a deal with Costco and began selling the line nationwide in early June. This contract is in addition to Hint’s presence in other major retailers, including Target, Walmart and Aldi, and continued expansion has brought the private company’s revenues up to a reported $150 million annually, according to the publication.
Growth for this flavored water company seems to be the driving motivation behind the latest round of investment. “Hint’s exciting products and industry-leading omnichannel model have consistently proven to be a powerful combination, even during these challenging times,” Eric Melloul, managing director of Verlinvest and existing investor in the company said in the release.
The company operates with an all-domestic supply chain giving it the upper hand during the pandemic over other companies that source ingredients internationally or complete process manufacturing in cheaper destinations like China or Mexico. In fact, its U.S.-centric operations are what Chief Executive reported landed the Costco contract.
Demand for flavored water is increasing, with the market estimated to reach $36.7 billion by 2025 at a compound annual growth rate of 11.5%. More players have entered or expanded in the growth segment. In August, Nestlé Waters North America launched Fruity Water, a flavored, no-sugar water designed for children. Keurig Dr Pepper acquired Limitless caffeinated sparkling flavored water in January, and in 2017 bought Bai. Pepsi has its flavored bubly line, which launched in 2018 and doesn’t have caffeine. Coca-Cola has its Aha brand of flavored sparkling waters, two of which have added caffeine.
Not only does Hint’s competition have far-reaching distribution models and established supply chains, but the price may be more enticing to consumers looking to keep their money close in this uncertain economy. The water from Hint is a premium product and is priced as such at $1.60 per bottle when ordered in a 12-bottle case online. This is more than bubly which retails for $0.61 per can on Amazon and Limitless that retails for $0.54 per can at Walmart.
There are also independent companies that are competing for market share in this competitive market and whose popularity will give Hint a run for its money. Spindrift, a sparkling water company that uses natural fruit flavoring, saw sales jump a massive 800% from 2016 to 2018.
Compared to the industrial output and distribution of some of its competition, Hint remains a private company and has a ways to go to reach a comparable capacity and compete on the same scale. But an extra $25 million and a CEO that has previous experience guiding the Silicon Valley unicorn AOL, can help it make some in-roads into channels that the company may not have previously entered.