Winston Ibrahim didn’t expect a global pandemic to boost demand for his products by more than 100% or to open up new sales channels. But that’s what happened in March and April, as consumers started flocking to buy the sustainable water filter and hydration bottles, carafes and pitchers, sold by Hydros, his San Francisco-based company, increasing sales from both e-commerce and retail stores.
That’s good news, or course. But meeting those orders hasn’t been easy. “We’ve been able to meet the demand, just barely,” says Ibrahim. “COVID-19 was a significant sales driver for us.”
Ibrahim launched his company in 2009 to sell just one product, a sustainable water bottle with a filter, aimed at providing an alternative to disposable versions. Demand grew steadily, according to Ibrahim, but it wasn’t economically feasible to produce on a mass scale. So he hired Cleveland-based product development and design firm Nottingham Spirk, to re-engineer his wares.
The process, everything from the redesign to finding suppliers, took about five years. The outcome: Instead of one bottle, they created three products—pitchers, carafes and bottles—made without ionic plastic resins and all using the same, universal, speedy filter. That fast flow, according to Ibrahim, also allowed them to eliminate the bulky plastic reservoirs used in many other water-filtration products, thereby reducing the amount of material needed and waste produced.
In addition, it let them make what he calls, “an extremely healthy profit margin”, which, in turn, meant they could sell the products at an affordable price. Ibrahim introduced his new line in late 2018 and sales grew at a healthy clip.
Then came COVID-19 and demand exploded. Sales increased 150% in March and 120% in April, according to Ibrahim. How come? For one thing, according to Ibrahim, before the pandemic and lock down orders, consumers were less focused on buying their own fast-acting, eco-friendly alternative to bottled water. “You were getting filtered water in your office. You were getting filtered water in the gym,” he says. “Now you’re stuck at home with your whole family. How can you deal with a water filtration system that’s going to take 30 minutes to do the job?”
Plus there was the panic buying, with stores limiting the amount of bottled water customers could buy. According to Ibrahim, a variety of mom bloggers also started writing about his products. “It was a big thing for us,” he says. And with more consumers concerned about their budgets, they also liked the potential cost savings. The average single American spends about $300 a year on plastic bottles; the average family, perhaps $1,000 a year, according to Ibrahim.
The sales spike happened not only in the company’s e-commerce operation. It also occurred among retail stores, something that was entirely unexpected. Example: Ace Hardware did a pilot and sold out in about one week, according to Ibrahim. The products are also now sold at Harris Teeter, a chain of more than 230 supermarkets. And Ibrahim is in talks with other retailers, too. “We had this major spike in e-commerce sales, well beyond expectations, and then in brick and mortar retail, as well,” he says.
Fulfilling all those orders, however, required some ingenuity. Hydros’ supply chain was hit early on in the pandemic, when production at the company’s manufacturer in China—it uses one facility there to produce and assemble all the many components of its products—came to a standstill. Ibrahim is only now getting back to optimal inventory levels. To deal with the demand from brick and mortar retailers, Ibrahim scrapped his bundles—say, two pitchers and a bottle, sold at a discount—the better to pull inventory from those offerings and sell one-off products.
At the same time, for Ibrahim, the stepped-up interest from brick and mortar retailers has provided a unique distribution opening. Many companies have pulled their products from all but the largest, top- tier mass market retailers until the fall, according to Ibrahim. As a result, “There’s a golden opportunity for us to move into the right brick and mortar retail now,” he says.
Recently, the company placed an order of more than three times the size it had previously anticipated pre-pandemic. So far, it’s sold through about half of that as commitments to retailers, according to Ibrahim. He attributes part of his ability to get such a large order geared up to the time and effort he spent testing out the manufacturing and delivery system before re-introducing his product line. With about 20 parts in Hydros’ pitchers and 30 in its bottles, he went through a process of about a year making sure there were no glitches. “All the factory had to do was wait for people to get back from their lock downs and they were ready to go,” he says.