Water Bottles Sales Grow Online Due to DTC

Beverage containers are more than just a must-have accessory to stay hydrated. These often colorful and distinct vessels have become a highly-recognizable status symbol with many consumers going all-in on one brand.

According to the latest research from Grips, Yeti (YETI), the maker of insulated containers ranging from coolers to water bottles to tumblers, generated an estimated $95.1 million in e-commerce revenue in the United States during the first five months of 2023, making it the nation’s leading brand in the Food & Beverage Carrier category. By comparison, Hydro Flask (HELE), another recognizable brand, generated $23.6 million online during the same period. 

Grips data further reveals that 86 percent of e-commerce sales of Yeti-branded merchandise and 60 percent of Hydro Flask products are sold through their direct-to-consumer (DTC) sites. And DTC business is good. 

Julien Mininberg, CEO of Hydro Flask parent Helen of Troy, reported an increase in online channel sales during fiscal Q1 despite seeing an overall decline in the insulated beverage category. Grips data confirms that e-commerce revenue generated by HydroFlask.com in the US was up a relative 8.5 percent year-over-year for the three month period ending May 31, 2023. DTC sales on Yeti.com were also up with revenues growing by 13 percent year-over-year during the same period. Furthermore, revenues from Yeti.com are on a strong upward trajectory since February pointing to a strong H2. 

Interestingly, DTC sales were highest in November and not (as this analyst expected) during the warmer summer months. This not only speaks to the consumer interest in keeping beverages warm but also to the gift-able nature of premium beverage containers which can easily sell for $50 or more.

Looking just at retail sales (excluding DTC), Grips shows that throwback brand Stanley (SWK) is mounting a strong comeback. In a three-way race between Stanley, Yeti and Hydro Flask, Stanley saw their online share of sales from retailer partners grow from 16 percent in August 2022 to 32 percent in May 2023. Much of Stanley’s success came at the expense of Yeti with Yeti’s share of retailer revenue dropping to 41 percent in May from 55 percent in August ‘22. Meanwhile, Hydro Flask’s share remained stable.

Stanley may owe some of its newfound success to embracing a unique retail partner strategy. Grips data shows that Amazon.com is the top retailer driving online sales for all three brands and DicksSportingGoods.com ranks second for both Yeti and Hydro Flask. But the similarities largely end there.

Setting Yeti apart from the competition is the fact that TotalWine.com is in their top five, where they are no doubt focusing on promoting their tumblers and other insulated barware. Meanwhile, Etsy.com is the third biggest online driver of revenue for Hydro Flask, being the brand of choice for many creators offering custom printed beverage carriers.

Interestingly, Stanley does not generate significant e-commerce revenue from Dick’s Sporting Goods or similar retailers. Instead, Walmart and Urban Outfitters are Stanley’s second and third top-performing retail partners.

Focusing on Gen Z (for whom beverage carriers are second only to mobile phones as must-haves) and Walmart shoppers (many of whom may fondly remember the Stanley brand from their affiliation with camping and other outdoor activities) is a strategy that will likely help it continue to grow in the months ahead. 

One thing I hope to look at in a future post are the sales of Yeti, Hydro Flask, Stanley and similar brands broken down by type, such as water bottles versus tumblers and mugs.

Hydro Flask’s Chief Operating Officer Noel Geoffroy said herself that the brand continues to see consumer interest shifting from bottles to tumblers. This is not good news for Hydro Flask given that most of their products are bottles. Stanley and Yeti, on the other hand, are already more heavily biased towards tumblers putting them in a better strategic position to capitalize on shifting consumer preferences.