Flow Alkaline Spring Water announced today it has closed a $45 million Series D funding round, backed by a group of investors that includes pop star Post Malone and former MLB champion Chase Utley. The financing will go towards the company’s goal of scaling distribution and production and doubling its consumer base by next year.
Also joining in the round were singer and existing investor Shawn Mendes and his manager Andrew Hertler, artist managers Austin Rosen and Dave Holmes, and former Uber director of engineering Curtis Chambers. Private equity firm Ruttenberg Gordon Investments also contributed.
According to founder and CEO Nicholas Reichenbach, the round comes as Flow has reported roughly 250% year-over-year growth and is aiming to sell over 100 million units this year. The brand is currently available in about 25,000 retail stores globally and 18,000 doors in the U.S. with an 80% ACV in the natural channel. The brand anticipates it will double its consumer base to 20 million by next year.
“The bulk of the investment is there to pave the way and get much deeper penetration, because Flow is going to be the next premium water [leader],” Reichenbach said. “In the 80s and 90s it was evian, then in the early 2000s it was Fiji and then VOSS had a little blip. Now it’s Flow’s time to be number one.”
Having recently completed a national launch at Walmart, Reichenbach said the company plans to add Target stores and roughly 5,000 additional grocery doors this year, including Albertsons/Safeway, Harris Teeter, Meijer, as well as drug accounts including CVS, Duane Reade and Walgreens.
He noted that the company has signed 15 new distribution agreements with DSD houses on the East and West Coasts, with Boston, the greater New York area and Washington, D.C. being key regions. Flow has also hired an additional 15 sales associates to support the expansion.
Flow is based in Ontario, Canada, but Reichenbach said 85-90% of the new financing will be directed towards supporting the company’s U.S. business, including expansions to its Augusta County, Virginia production facility. Last year, Flow opened the 115,000 square foot plant, with costs running in excess of $30 million following subsequent upgrades, according to Reichenbach. The company has added night shifts to meet increased demand during the COVID-19 pandemic and has hired 15 new employees for manufacturing with plans to hire an additional 20 staff members over the summer.
Investor and musician Shawn Mendes (Left) with CEO Nicholas Reichenbach (Right).
Flow has reported a continued surge in sales during the coronavirus crisis, with sales up 25% in the brand’s retail accounts and 50% in the ecommerce channel. According to Reichenbach, Curtis Chamber will help the brand to upgrade its ecommerce channel and grow subscription rates, bringing experience in technology and app development.
“We’re going to crack the code because our water subscription business is up substantially and we have a whole ecomm team out of New York that is optimizing our funnel and making sure we can acquire new customers during COVID and keep them happy all the way through,” Reichenbach said.
Some of Flow’s more well-known new investors will look to help increase awareness about the brand through their social media platforms, Reichenbach said, though he said the company does not expect them to treat the partnership as an “endorsement deal” with specific promotion requirements. However, many have already been active in promoting the brand: last month, Post Malone featured the brand during a livestream concert which Reichenbach estimated generated over 50 million impressions.
On May 15, Flow will launch its previously announced collagen water line online in the U.S., followed by a roll out to 5,000 retail doors, including Sprouts, on June 1. The brand will launch three additional flavors on the collagen line at Natural Products Expo East this fall and is developing a new infused product to be introduced next year during Natural Products Expo West.
During the pandemic, Flow has partnered with the Federal Emergency Management Agency (FEMA) to donate $1 million worth of product to healthcare workers at hospitals in New York, Virginia and Guam.
“We’re super grateful to be able to close this round during this time and the money is going to be used to fuel the United States again and help get the economy back up and doing our part there,” he said. “So we’re crushing innovation and promotions on the brand and it’s time for Flow to take a lead position next year — and we’re well on our way to doing it.”
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May 05, 2020 at 12:20AM
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Flow Alkaline Spring Water Raises $45M to Support US Growth - BevNET.com
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