Hydrogen Water Brands Plot Course for Growth

Forget Coca-Cola; what beverage could have a formula more valuable and recognizable than good old H2O?

Even as the bottled water market continues to diversify, integrating functional benefits and new processing technologies into an expanding category of products sold across all retail channels, consumers are still looking for that familiar balance of two parts hydrogen and one part oxygen. Yet a handful of growing beverage brands are hoping that, by inserting an extra infusion of molecular hydrogen into that equation, they can tap into the growing demand for natural functional beverages with a truly innovative product.

On a cellular level, hydrogen is one of the most abundant and versatile elements on the planet. According to brands working in the space, adding molecular hydrogen gas — which is tasteless and odorless — to water brings a variety of benefits, including antioxidant and anti-inflammatory properties. According to brands working in the space, it can also increase energy and mental clarity, speed up muscle recovery time and improve the appearance of skin.

Many of the entrepreneurs working to create the category in the U.S. discovered hydrogen water while visiting Japan, where hydrogen has long been recognized as a treatment for various ailments and diseases. Both ready-to-drink products and at-home hydrogen water machines are popular with consumers, and the Ministry of Health has approved hydrogen-infused saline IVs as a method of treating infections.

However, the broader scientific consensus on hydrogen water is mixed. Though an extensive body of scientific research indicates that consuming molecular hydrogen may have some health benefits, much of that has been conducted on animals in a laboratory setting. Some human trials, performed in Japan, have indicated a relationship between drinking hydrogen water and various biological functions, such as increased anti-inflammatory activity and reduced muscle fatigue in elite athletes. However, more research is needed to establish a definitive link. The amount of hydrogen water users need to consume in order to experience those benefits, if they do at all, is also unclear.

Despite its limited commercial exposure thus far, a handful of young brands are taking different approaches as they seek to stake their respective claims on this emerging category.

Creating the Category

In recent years, the runaway success of bottled water brands with some kind of functional benefit, such as alkalinity or electrolytes, has proved that the category can reach beyond claims about purity and sourcing. Amongst functional premium waters, Smartwater continues to set the pace with $821 million in sales over the last 52 weeks, according to data from market research group IRI. Meanwhile, brands like Essentia and CORE Hydration continue to add retail placements at an aggressive clip.

As one of the earliest brands to enter the U.S. hydrogen water market place, Pennsylvania-based HFactor has faced the challenge of educating consumers and retailers about the unique benefits of its innovative product. Founder Gail Levy was inspired to explore research about the benefits of molecular hydrogen after losing a friend to cancer. After several years spent overcoming obstacles in R&D, HFactor debuted in November 2016 at Natural Products Expo East.

Finding a packaging format that worked was an early challenge for HFactor. In plastic or glass bottles, hydrogen gas can slowly escape while the product sits on the shelf. To make matters more complicated, regardless of the package material, hydrogen levels begin to decrease as soon as it is opened. For highest efficacy, consumers are encouraged to drink hydrogen water within 10 to 30 minutes of opening.

HFactor initially addressed that issue by using an aluminum-lined 11 oz. pouch with a tear-open “rip-and-sip” enclosure, then later added a resealable cap. At Natural Products Expo West 2018 in March, the company showcased a new package design and logo for the pouch, along with a new 12 oz. can format. Both will be priced at $2.99 and will be launching at Wegmans stores this spring.

As one of the pioneers of the hydrogen water category, Levy said HFactor has intentionally avoided narrowing its focus on any specific audience or functional call-out for the product. The company has done a combination of grassroots marketing work and targeted activations, such as being featured as part of a special months-long beauty and wellness-themed pop-up at Saks Fifth Avenue in New York City.

“I think the consumer is helping us shape and dictate the benefits of HFactor,” Levy said. “I think the whole point of hydrogen is that there are so many benefits from it, and I don’t think we are looking to categorize or select a particular audience. We want to be the hydrogen water for everybody.”

Under Research

For Dr. Cody Cook, PhD, president and chief medical scientist at HTwo, science and health have been the driving factors behind his passion for hydrogen water.

During a trip to a laboratory in Japan as part of his PhD training at the University of Arkansas for Medical Sciences (UAMS), Cook saw up close how local doctors used hydrogen as a treatment for a variety of diseases. Though HTwo was founded in 2010, the product has been primarily sold through ecommerce and has only been available commercially at select Kroger locations for the last two years.

“Our inherent reason for creating the company was to get the product to into hospitals and to people who really needed it,” said Cook. “The problem is even though there’s tons of research that shows the science, bringing this from the laboratory and the clinics through the U.S. Food and Drug Administration (FDA) approval process requires a whole other field of things that have to be done. Right now we are limited to what we can even say in terms of the benefits of this product.”

As Cook noted, the ability of HTwo or other hydrogen water brands to control the message around their products is a major challenge to the development of the category. He acknowledged that much of the research available has been done in animal models for human-based diseases, and that he was unaware of any major studies currently being done using human subjects. He was hopeful that, as HTwo begins to generate a revenue stream that can be directed towards supporting further research and clinical trials. “Through the commercialization process,” Cook said, “we can be a player in that.”

Yet until then, Cook is limited in his ability to influence consumers’ opinion.

“I’ve read the studies, I’ve met the people and I’ve seen the research,” he said. “So it’s difficult when I see in the media when people go out and get a nutritionist and ask this person’s opinion and they say ‘It’s interesting but there’s not enough science to validate it.’ But you can’t become negative — that’s not the way you approach people and convert them to believers. You just have to be patient.”

Doctor’s Orders

While it fits with consumers’ overall increased interest in functional beverages, one brand is leveraging the perceived benefits of hydrogen water on skin to differentiate itself from the growing competition.

Dr. Nicholas Perricone is the ideal person to communicate that message. A board certified dermatologist, adjunct professor of medicine at Michigan State University and best-selling author of a series of books on skin care and anti-aging treatment, His approach centers on the belief that low grade inflammation occurring on a cellular level inside the body is linked to aging and disease, and that antioxidants, which help neutralize free radicals, can help counteract those effects. These ideas, presented as a holistic lifestyle-based alternative to Botox and plastic surgery, have fueled his eponymous line of cosmeceutical products, which all contain anti-inflammatory ingredients.

Now, as he prepares to launch Dr. Perricone’s Hydrogen Water later this Spring, he said the beverage represents “the culmination of everything I’ve worked on for 30 years.”

“This drink is really the thing I’ve been searching for — it’s inspirational,” said Perricone last week in a call with BevNET. “I don’t like hyperbole; I like really science-based stuff. That’s why it was so difficult to work in the cosmetic industry. This is true science, and people need this.”

Like other entrepreneurs in this category, Perricone discovered hydrogen water after reading about its popularity and widespread use in Japan. Using human subjects, he studied the effects of hydrogen water on regulating NADH, an enzyme critical to energy performance. According to his results, at the end of a 15 minute period, 18 out of 20 subjects in the study saw a 12.5 percent increase in NADH regulation. Along with his own trials, Perricone cited over 1000 peer reviewed publications from Japanese researchers which concluded hydrogen has benefits in over 150 human diseases.

While Perricone’s expertise is in skin care, the package of the hydrogen water features call outs to energy and recovery. Hydrogen’s array of benefits, according to Perricone, include more subtle things, like mood uplift and focus. Nevertheless,unlike the instant physiological response from consuming something like caffeine, whether drinkers feel the short-term effects immediately, or at all, of hydrogen water is still a subjective question. That issue further underscores the need for consumers to buy into the long-term benefits of regular consumption espoused by Perricone, who himself drinks about three 12 oz. cans per day.

“Here we have this incredible anti-inflammatory that makes you feel good immediately, but also has long-term benefits,” he said. “What I learned was you have to have a therapeutic level of hydrogen to make this worthwhile.”

Outside of the product itself, Perricone’s name recognition and ability to communicate the benefits of hydrogen water directly to consumers is perhaps its strongest asset in differentiating the brand from other competitors in the hydrogen water category. Celebrities like actress Eva Mendes and Uma Thurman have praised Perricone’s philosophies on skin care and anti-aging, and can help spread the word about hydrogen water as well. Besides word of mouth, Perricone noted the process of educating the public will be mainly done through publications and media appearances, including a a new public television special scheduled to air this summer that will focus on water.

“The whole process is just like it was 20 years ago: I have to educate an entire population about a new word, hydrogen,” he said. “It’s a difficult process in one way, but the country is a lot different than it was 20 years ago. People are really interested in their health.”

For hydrogen water to have the kind of impact that Perricone predicts it can, it needs to be broadly accessible. Coke-affiliated beverage incubator L.A. Libations has been enlisted to help get the Dr. Perricone brand into ambient shelves and coolers across a range of channels. In one national outlet, the hydrogen water will be merchandised alongside Dr. Perricone skin care products in the health and beauty section. At a suggested retail price of $2.99 per can, on par with many energy drinks, Perricone sees an opportunity to share his ideas on health with a mass audience and make a positive social impact.

“I really believe that if we get people drinking this water on a regular basis, we may be able to lower health care costs significantly in this country,” he said.

Hydrogen & Bubbles

Though hydrogen-infused water itself may be a new category, the explosive popularity of sparkling water may be the key to unlocking its appeal for mainstream consumers.

That’s the idea for HyVIDA, the first carbonated hydrogen water on the market. Presented in brightly colored slim cans that shy away from the more direct functional call outs on competitors’ packaging, the Michigan-based company is positioning itself as a fun, accessible brand that can be enjoyed on any occasion.

“Clearly we are still going after people who are very health conscious, but it’s about where will they embrace the product in their daily routine?,” said Rick Smith, HyVIDA founder and CEO, noting that the product offering falls somewhere in between the natural hydration of coconut water and the everyday appeal of La Croix. “Because it’s carbonated, where they embrace it is going to be different.”

Smith, a former engineer searching for a new business project, was introduced to hydrogen water by fellow entrepreneurs. The original idea was to import the product in from Japan, but when Smith flew out to visit the facility, he realized the process was too slow and expensive to bring across the Pacific. In order to make the numbers work, Smith would have to manufacture domestically and pivot into a more brand-centered mindset.

“In technology, if you are doing something like medical imaging, you can switch; if a different product has the same technology, people will buy it,” he said. “But in the beverage world, we are selling the mystique of spring water from Mt. Fuji. If you switch to a domestic source, you could lose a lot of customers.”

Recognizing an opportunity to reinvent the brand, Smith decided to make the switch. He spent several months working on an alternative process for infusing hydrogen gas that could work with carbonated drinks. That process is now patent-pending, giving HyVIDA a unique point of differentiation and the convenience of working with a U.S.-based copacker.

“I guess they say necessity is the mother of invention,” Smith said.

HyVIDA’s route to market strategy is designed to capture health conscious consumers. As such, he’s targeted higher end natural and specialty retailers, like Whole Foods and Sprouts, to help build the audience for the brand. The company is in the process of getting pre-commitments from retailers and is set to launch in April, when it will be sold for a suggested retail price of $2.25 per 12 oz. can.