Dive Brief:
- Functional water brand Oxigen closed a $15 million Series B funding round with backing from notable celebrities including country music singer Brett Eldredge and Cleveland Cavaliers forward Kevin Love, according to a release.
- The pH balanced water with electrolytes and boosted oxygen will use this infusion of capital to build further brand awareness through increased marketing and further scaling its national distribution.
- Functional waters have been exploding in popularity recently, and funding has followed this trend. Oxigen has been particularly active in recent months with the Golden State Warriors’ point guard Stephen Curry joining as an investor and owner of the brand in August.
Dive Insight:
As the demand for functional and better-for-you beverages has expanded over the past several years, Oxigen has benefited by growing its year-over-year sales between 300% to 400% for the past several years and more than doubling its nationwide store count. That exponential growth has attracted big-name celebrity investors that could bring their fan base to the brand.
In addition to Love and Eldredge, the brand said in the release that it is also backed by famous faces like Michael Meldman, co-founder of Casamigos Tequila; Richard A. Gephardt, former Majority Leader of the U.S. House of Representatives; and Neal Moritz, producer of the Fast & Furious film franchise. Curry is already the face of the brand, appearing in Oxigen ads, but adding on these new investor names could help in the company’s quest to continue to raise brand awareness.
Oxigen’s competition in the space include brands like Essentia and Flow. Even legacy companies are getting into the game. In 2018, Keurig Dr Pepper announced it would buy premium water brand Core Nutrition for $525 million and last December, Nestlé announced it would launch Nestlé Pure Life Plus as its initial foray into functional water with three varieties: magnesium, zinc and potassium. PepsiCo also recently launched Driftwell, a functional water aimed at combating stress and inducing relaxation.
More could be looking to move into the space as well since functional waters, like raw water, hydrogen water and alkaline water, are a $2.1 billion market, according to Campaign. Technavio analysts projected the global functional water market will see an annual growth rate of nearly 9% between 2018 and 2022.
Although this growth shows that consumers are interested in water that does more than just hydrate, there is little scientific evidence to support the efficacy of many of the claims made by functional water brands such as oxygenation. According to research, there’s not much science to back up claims that hyper-oxygenated water has health benefits and the FDA has cited those issues before. The lack of evidence to support many claims from functional water brands has led to consumer litigation for other brands. Oxigen boosts its water with oxygen, which the company said “is central to many health benefits, including faster recovery.”
Despite those issues, several professional sports athletes have signed on to endorse and invest in Oxigen. This vote of financial confidence lends credence to the brand’s claims that its formulation is beneficial for recovery — particularly after sports. Having the seal of celebrity approval also offers the functional water brand an air of legitimacy and brings attention to Oxigen in a very crowded segment.
In addition to its functional attributes, Oxigen touts its packaging, which is made from 100% recycled plastic. Studies show 50 billion water bottles are consumed every year in the U.S. alone and the negative environmental impact can be huge. Producing plastic bottles takes three times the amount of water that’s actually contained inside of them, and only about 30% of plastic bottles are recycled.
