Tammy Eckenswiller senior vice-president of brand creative, Nicholas Reichenbach Flow’s founder and chairman and Maurizio Patarnello CEO of Flow Beverage Corp., are photographed at their office in Toronto on Wednesday, July 14, 2021.Tijana Martin/The Globe and Mail
Shares of Flow Beverage Corp., which sells flavoured water in sustainable packaging and targets health-conscious women, closed down more than 30 per cent on their first day of trading on the Toronto Stock Exchange on Wednesday.
Founded in 2014, Flow’s alkaline spring water lines the shelves of health-oriented grocers and restaurants, featuring flavours such as strawberry rose and cucumber mint. It also sells unflavoured water. The product is in more than 20,000 stores across North America, and uses recycled, plant-based packaging. The company has also built an e-commerce sales business.
The Toronto-based company is going public via reverse takeover, combining with RG One Corp. – which was formed with the sole intention of acquiring another company – at the end of June. Shares will trade under the ticker FLOW. Nicholas Reichenbach, Flow’s founder and chairman, said the company raised $98.9-million as part of the transaction.
“We moved directly to the big bulletin because of the maturity of the company and the brand equity,” he said. Flow shares closed at $5.67 on Wednesday, dipping 31 per cent from its $8.25 opening price.
Flow’s annual revenue has grown in recent years, while operating at a loss. It posted $22.9-million in net revenue in its fiscal 2020, ended Oct. 31, while recording a $41.8-million loss. In fiscal 2016, it earned $6.1-million in net revenue, recording a $21-million loss. Revenue growth has accelerated in 2021, with Flow earning $11.3-million in the three months ended April 30, a 97-per-cent increase from the same period in 2020.
“We have built over these few years a very solid infrastructure,” said Maurizio Patarnello, Flow’s chief executive officer, who had the same role at Nestlé Waters. “We are a vertically integrated company, we have two manufacturing [facilities]. … We will make sure that we strike a balance between improving the profitability and continuing to expand.”
The company, which has celebrity ambassadors such as Canadian singer Shawn Mendes and actress Halle Berry, is a certified B Corporation, which obliges it to uphold high environmental, social and governance standards. Investors have placed increasing importance on ESG compliance in recent years.
“Sustainability is in the DNA of everything that we do,” Mr. Reichenbach said. “We believe in the triple bottom line: people, profit and the planet.”
Flow’s target customers are women between 25 and 45 who prioritize health and wellness. Tammy Eckenswiller, Flow’s senior vice-president of brand creative, came up with the name of the company. She is also Mr. Reichenbach’s wife.
Tammy Eckenswiller senior vice-president of brand creative is photograph at the office in Toronto on Wednesday, July 14, 2021.Tijana Martin/The Globe and Mail
“Seventy-five per cent of our 18 million customers are female, they’re the wellness woman,” Mr. Reichenbach said. After surveying customers, Flow recently launched collagen-infused water, which is meant to improve skin health.
“Once we saw that our consumers wanted that, it made it very obvious for us to go into adding that nutrition and functional support into our water.”
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