Well hydrated: Hydrapak CEO Matt Lyon sees sales double on increased OEM deals

It's been a busy spring for outdoor hydration product manufacturer Hydrapak, including several new OEM customers and successfully fending off a competitor lawsuit in court. SNEWS sits down with Hydrapak CEO Matt Lyon to find out how the company is growing, plus insight for what lies ahead in the hydration category.

It’s been a busy spring for outdoor hydration product manufacturer Hydrapak and its CEO Matt Lyon.

In March and April, the Oakland, Calif.-based company announced several new original equipment manufacturer (OEM) deals to provide its water reservoirs to The North Face, Shimano and Quicksilver. Hydrapak also came away with a recent victory in court, fending off a competitor lawsuit.

In an interview with SNEWS, Lyon tells us how the company has doubled its sales during the past few years. Read on to see where Lyons sees the hydration market heading, including better tailoring fluid delivery for every activity:

Where is Hydrapak seeing the most success and growth in the hydration category?

Hydrapak has experienced tremendous growth over the last few years. From 2009 to 2011, the business doubled in revenue, and the growth has accelerated so far in 2012. We serve two main customer groups — brands that use our systems as original equipment in their own product offerings (OE), and distributors that sell our hydration systems, bottles and backpacks directly to retailers. The largest growth has come from OE customers, and we now have more than 40 quality brands that incorporate Hydrapak hydration into their product lines. For us, this is a real validation of our technology and reliability from the most educated buyers in the marketplace. Our distributor business has also posted annual gains, although not at such a steep growth rate.

What are the top trends in new hydration products heading into Outdoor Retailer Summer Market?

Shape-control was a big story in hydration last year, with pack designers looking to reservoir features to help tackle the issue of controlling water and providing for a more comfortable backpack pack fit. Pressurized hydration was also a new-comer to the market, providing a whole new twist on the benefits of a hydration system. This year, I think those trends will continue, and we will see focus on smaller sized reservoirs in lots of new configurations, especially for trail runners.

You recently announced a favorable judgment in a patent infringement lawsuit filed by another hydration company. In layman’s terms, can you explain what the case was about and the end result?

We were sued for patent infringement for the closure system used in our Reversible II Reservoirs. It is a wide-mouth system that fills from the top, and the user folds the reservoir closed and then slides a sealing bar across to make a seal. Our product is not the only one in the market that operates in that manner, and we were sued by the other company that has a similar operation. However, both products achieve their seal in very different methods, and each method is patented. The differences are obvious, and the judge required no discovery to make her decision. The case should never have been filed, and the judge agreed by awarding our motion for sanctions so that our competitor would have to pay for our legal fees.

Did the favorable legal result open up any new business for you? Were some clients waiting on the result of this case?

We were fortunate in that our product was quite obviously not infringing the patent, and didn't affect our current customer base. In fact, we continued to have customers switch from their products to ours over the last six months. Having said that, one major retailer that is not a current customer has already indicated that they were waiting for the outcome of the case and are now ready to move forward.

What’s ahead for Hydrapak? Any other areas you’re looking to expand into?

We think there is lots of room for new solutions in the hands-free hydration space. For the most part, consumers are offered one solution for every application. This is the "any color you want, as long as it's black" approach. We feel that each activity deserves its own tailored solution, and different brands can offer different sets of features that match their customer needs. We also have lots of ideas for innovation in the hands-on hydration space and look forward to launching many new products over the next few years.

--Compiled by David Clucas


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