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Flow Water CEO thinks big: We could emulate the success of Evian and Fiji

By Elaine Watson+

17-Apr-2017
Last updated on 17-Apr-2017 at 19:15 GMT2017-04-17T19:15:44Z

Flow Water could be as big as Evian or Fiji, says CEO

It’s one of the biggest beverage success stories to emerge out of Canada in the recent years, but can naturally alkaline spring water brand Flow Water – one of a new breed of waters packaged in a Tetra Pak - hit the big time in the US market? Early signs are highly encouraging, says founder and CEO Nicholas Reichenbach. 

“The taste profile is unique owing to the geological conditions," he told FoodNavigator-USA.

"The water is naturally filtered through sand and silt and migrates towards a limestone and dolostone aquifer from which our production well draws water [Reichenbach’s family owns the land – Blue Lake Springs - in Bruce County, Ontario, Canada, where the water is sourced], which gives it its heavy mineral count [potassium, magnesium, calcium, bicarbonate] and natural alkalinity of pH 8.1."

He added: “We launched in April 2015, we’ve since gone from zero to 4,500 locations, and we’re moving up to 6,500 in Canada. So in the US, we believe we can emulate this and get to 2,000 locations in year one, 4,500 in year two and 6,500 in year three.”

Flow secured national distribution with KeHE and UNFI for its US launch last year, partnering with Acosta’s Natural/Specialty Sales (NSS) division and IGNITE Sales Management, added Reichenbach, a serial entrepreneur who had an epiphany at the Burning Man festival in Nevada in 2013 that got his entrepreneurial juices flowing (“When I left I just remember seeing this huge mountain of plastic bottles, and I thought there has to be a better way...”).

Ultimately, says Reichenbach - who says you have to adopt a Go Big or Go Home mentality if you’re going to get into a business as capital intensive as bottled water – Flow could be a sizeable global brand.

“I really believe we can build Flow to be the size of Evian and Fiji because of the quality of the water, and our incredible partnership with TetraPak [Flow uses the Tetra Prisma Aseptic  pack]. It’s my aim to build Flow Water into an iconic social brand.”

Upon extraction from the aquifer, the water passes through double filtration and gets UV treated prior to entering the filling machines at a Tetra Pak aseptic production facility in the greater Toronto area (water is tankered from the source to the bottling facility).

The water source – at Blue Lake Springs, Ontario, Canada – is “self-sustaining, self-replenishing by rain, always protected and never drained,” claims Flow Water founder and CEO Nicholas Reichenbach. 

When the data started coming back from stores, I knew we were onto something

While it takes a huge level of confidence – and even larger piles of cash – to get into the bottled water business, Reichenbach was able to tap into both in order to turn his vision into reality, teaming up with some high-profile industry players including Joe Mimran, founder of Joe Fresh and Club Monaco, former Loblaw execs Joe Jackman and John Lederer, and former Fiji Water president and CPG veteran John Cochran to get Flow, well, flowing.

But if you think of the multi-billion dollar size of the prize, says Reichenbach, coupled with the fact that the beverage industry consistently yields some of the highest exit multiples for investors, it’s a high-risk, but high-reward scenario.

“When the data started coming back from stores, and we saw that we had higher velocities than most of the premium waters on the market, I knew we were onto something, and I thought we have to take this national, and double down on our investment. And in the US, we’re seeing almost double the velocities that we're seeing in Canada.”

In April 2016, Flow Water also raised $5m on the TSX Private Markets, a platform enabling it to raise sizeable sums without going public.

The #1 thing we anchor the brand on is the quality of the water

So what’s driving sales of Flow? While the alkaline pH is something that’s flagged up on the front of pack, and may appeal to some consumers, Flow doesn’t make any health claims about it, while Reichenbach says the taste and the quality are key purchase drivers.

“The #1 thing we anchor the brand on is the quality of the water, and it has an amazing silky smooth taste with naturally occurring minerals and electrolytes. Consumers also feel good about drinking Flow because it’s in a more sustainable package.”

Bottled water and sustainability

He added:  “We use clean energy to power our facility and we use Tetra Prisma Aseptic packs that are made with up to 70% renewables [paperboard from trees harvested in responsibly managed forests] – a figure we want to see rise to 100% [the rest of the package contains aluminum and polyethylene].

 

“Not everyone has access to Tetra Pak recycling facilities, but the percentage of places that do is rising all the time and it has a higher recycle rate than plastic bottles. We also deliver water to people’s homes via a subscription service [Flow Direct] in cities including Vancouver, Montreal and Los Angeles using electric delivery vehicles.”

Of course cynics might argue that any company that drives water to people’s homes (albeit in electric vehicles) when they could simply turn on the faucet and drink municipal water instead shouldn’t win any prizes for saving the planet.

Bottled water associations, however, point out that most of the growth in bottled water is coming from consumers switching from other packaged soft drinks such as carbonates (that have a higher environmental footprint), not from people ‘trading up’ from tap to bottled water.

And if you’re going to drink bottled water, says Reichenbach, Flow Water has a lower environmental impact than the competition, because of the renewable materials use in the cartons, the fact it takes less water to produce Tetra Pak than PET, and the fact rectangular Tetra Pak cartons can be packed more efficiently on a truck or shelf.

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