The Hydration Pharmaceuticals Company (ASX: HPC) (trading as Hydralyte North America) has recently signed and commenced its partnership with prominent Canadian celebrity Shay Mitchell, who will act as a brand ambassador and equity partner for the company.
Under an agreement secured in March, Ms Mitchell will help increase Hydralyte’s brand awareness by consulting on social strategy, using her own social channels and curating promotional events.
Described as a prominent North American actress, mother and entrepreneur, Ms Mitchell is known for her roles in Pretty Little Liars and You, and is currently starring in Hulu’s Dollface.
She will promote Hydralyte’s products across social media channels (including Instagram, Twitter, YouTube and TikTok), conduct promotional appearances and attend meetings with retailers.
Ms Mitchell has a large social media presence, which at the time of the announcement included 33 million Instagram followers, 3 million Twitter followers, 4.23 million YouTube subscribers and 7 million followers on TikTok.
As part of the deal, Ms Mitchell is considered a partner and investor in Hydralyte and will collaborate with the company on a new flavour of the product.
She will be issued with an initial tranche of shares in Hydration Pharmaceuticals Company to the value of approximately $354,000, followed by a second tranche to the same value.
Social media posts
The partnership kicked-off in May, with the first of many social media posts on Ms Mitchell’s Instagram account, which highlighted her daily ritual of drinking Hydralyte to tackle a busy schedule.
The Hydration Pharmaceuticals Company chief executive officer Oliver Baker said he was confident Ms Mitchell would have the ability to unlock a number of value accretive opportunities for the company.
“We anticipate the agreement will provide access to a large addressable market through Shay’s established social media following in North America,” he said.
“She has a track record of building brands with style, passion, fun and authenticity [and] being Canadian gives us a unique opportunity to work with her in one of our larger operating markets.”
Ms Mitchell’s social media follower base is focused across the company’s target demographic, which is expected to provide considerable advantage for it to tap new customers.
Hydration Pharmaceuticals Company specialises in the development and sale of a range of liquid, tablet and powder hydration solutions to large, addressable markets across the US and Canada.
While the Hydralyte brand was established in Australia in 2001, The Hydration Pharmaceuticals Company made its ASX debut last year after a $17 million initial public offering via the issue of 59 million shares at $0.29 each.
On listing, the company had an indicative market capitalisation of $46.7 million.
Funds raised are being directed into a scaled-up marketing effort through online and traditional retail channels, the progress of new product development initiatives and for general working capital.
The company’s board and management include former executives from major vitamin brand Swisse wellness, which has since been acquired by Hong Kong stock Exchange listed H&H Group.
Mr Baker is the former Swisse Wellness North American general manager. The Hydration Pharmaceuticals Company chairman George Livery was Swisse’s director of strategy and corporate.
Former Swisse chief executive officer Radek Sali is also the company’s second largest shareholder.
The Hydration Pharmaceuticals Company’s financial performance has gained momentum since its ASX listing.
The company’s revenue for the first quarter of this year increased 119% on the previous corresponding period’s result of $900,000 and 9% on the prior quarter’s $2.45 million.
The rise was attributed to ongoing product uptake in the US and Canada through traditional bricks and mortar retail stores, as well as continued growth in online sales.
Marketing spend remained flat to the previous quarter at $1.3 million as the company continued to invest in the marketing flywheel with initiatives including a China distribution partnership, e-commerce website revamps and the promotion of online sales growth.
The Hydration Pharmaceuticals Company held $12.61 million in cash at the end of the March quarter.
The company says it is financially equipped to progress growth initiatives and revenue-generating opportunities in the coming US summer, which is traditionally a period of high-volume sales and increased revenues.
Mr Baker said the company is positioned to grow its footprint in the healthy hydration solutions category, which generates annual sales of up to $1.58 billion in North America.
“With a significant rise in year-on-year revenue, our sales and marketing investment has also increased which reflects our ongoing focus of increasing brand awareness, top line growth and broadening stockists … we anticipate an investment into our sales representatives and digital advertising will unlock numerous revenue-generating opportunities in the coming months,” he said.