Toronto-based Flow, which launched its first products in 2015, posted a 40% increase in net revenues in fiscal 2020 to $CAD23m, and a net loss of $CAD48.1m.
In the six months to April 30, 2021 (first half of fiscal 21), the company's growth rate accelerated, with net revenues surging 97% to $CAD20.3m with a net loss of $CAD31.9m, said Flow CEO and former Nestlé Waters boss Maurizio Patarnello, who was lured out of retirement by Flow founder Nicholas Reichenbach earlier this year.
“We are very pleased with the 97% net revenue growth in the first half of fiscal 2021. We have also materially improved gross margin, increasing to 32% in the first half of fiscal 2021 and growing to 35% in Q2 2021.
“We are accelerating our growth strategy by expanding distribution with leading North America retailers and through our direct-to-consumer and subscription models. We continue to invest in brand awareness and activation at the point of sale, and have reinforced our leadership team to support our future growth.”
New Tetra Pak manufacturing lines have increased manufacturing capacity to 350m+ units/year
Historically, the playbook for a successful venture-backed beverage brand has been to “get to north of $100m and then a big guy would come along and buy you,” Reichenbach told FoodNavigator-USA in March.
But the Beyond Meat IPO changed the game, claimed Reichenbach, who launched his first products in Tetra Paks in 2015 and is now selling Flow in 20,000+ stores in the US and Canada from Whole Foods to CVS, Walmart, Target, and Vitamin Shoppe, with celebrity fans from Kim Kardashian to Gwyneth Paltrow re-hydrating with the brand (pH 8.1), which now includes flavored, collagen-infused, and vitamin-infused variants.
“It made the capital markets and the market at large aware that you could take a mid- to long-term growth view on a high growth emerging category leader and finance it through the public markets. So we saw a window open up for similar companies to build scale.”
Meanwhile, raising money in this way doesn’t mean an acquisition is off the table down the line, he noted, “People buy public companies all the time.”
While the US retail market for bottled water excluding c-stores grew a respectable 5.2% in the year to March 6, 2021 (Nielsen xAOC), the action is at the premium end of the market where Flow plays, said Reichenbach, who seeks to double his U.S. footprint over the next 18 months, and recently installed new TetraPak manufacturing lines that increased manufacturing capacity to 350m+ units per year.