Energy drinks are booming, and Liquid I.V. wants a piece of the action

It’s official: No matter how crowded the store shelves and bodega fridges get, we’re all still very thirsty. But not just for water—flavored water, immunity-boosted water, protein-enhanced water, alkaline water, hydration powders that supercharge water, and more. The market for water enhancement products is expected to grow from $2.1 billion this year to $4.3 billion by 2035. 

Liquid I.V. has established itself as a leader in the hydration powder segment of this market, thanks to clever branding that’s made it ubiquitous everywhere from the wellness crowd to music festivals. Since it was acquired by Unilever in 2020, the brand has quadrupled its business. 

Now, Liquid I.V. is moving beyond just hydration with the launch of a sugar-free energy option of its flavored powder that could help it break into the energy drink market. To counter the abundance of taurine and the increasingly nuclear colors of leading energy drinks, Liquid I.V. touts its newest option as a “hydration-first energy solution” made with natural caffeine—and without sugar or artificial sweeteners.

“When this company started in 2012, the powdered hydration category was very sleepy, tired, dusty, virtually nonexistent,” says CEO Mike Keech. “Liquid I.V. came on the scene, reimagined and reinvented the category to new heights. So when we think about growth and continuing to innovate, the sugar-free energy solution was really a natural next step.”

Liquid I.V.’s energy opportunity

Liquid drink enhancers lead all unit sales growth for Gen Z in the beverage category, and are second for millennials, according to the research firm Circana. Energy enhancers are leading that growth across all generations. In its own research, Liquid I.V. found that 92% of Americans are looking for hydration, focus, and balanced energy without too much of a caffeine jolt.

Sally Lyons Wyatt, global EVP and consumer goods and food service analyst at Circana, says the energy drink category continues to see consistent growth because there are a growing number of less intense options. 

“There was a lot of flak several years ago because of the high sugar component, as well as too much caffeine,” Wyatt says. “Now there are a variety of options that might be lower in sugar and caffeine, which has helped continue the growth of this category.”

Mellowing out the energy drink market

This is exactly why Liquid I.V. is jumping in. The brand’s growth comes from people using it for increased hydration for health, during and after exercise, and around their nightlife habits. Here, Keech sees an opportunity to be a more nuanced brand among the adrenaline-fueled likes of Monster and Red Bull, which contain 160 milligrams and 151 milligrams of caffeine, respectively, per 16 fluid ounces. 

Available in two flavors—strawberry kiwi and blackberry lemonade—each stick of the new Liquid I.V. option (recommended to mix with 16 fluid ounces of water) contains 100 milligrams of caffeine, zero sugar, and no artificial sweeteners or colors. The brand also says it has five essential vitamins and three times the electrolytes of the leading sports drink. Rather than synthetic caffeine, Liquid I.V.’s energy comes from coffeeberry extract and CognatiQ (a patented coffee fruit extract), and it’s balanced out by L-theanine, an amino acid found primarily in green and black tea and some mushrooms.

Keech says the biggest challenge was to make a sugar-free option that still managed to taste good and deliver on the promise of natural energy. “We worked for a long time to get this right,” he says. “Getting that balance between flavor and function has been the hardest thing to pull off.”

A new ad campaign for the launch focuses on how most energy drinks and caffeinated options cause people to glitch out. The brand will also really be leaning into New York Fashion Week in early September, with reps in branded Rivian EVs handing out samples, and a “Good Energy Bodega” in SoHo. 

This doubles down on the focus in New York City, where the brand launched a Times Square takeover earlier this summer.