Flow Beverage Corp. head Maurizio Patarnello has stepped down from the CEO role effective immediately, the company announced today, and will be replaced by Flow’s founder and executive chairman – and former chief executive – Nicholas Reichenbach.
According to a press release, Patarnello – who served as the CEO and chairman of Nestlé Waters prior to joining Flow last year – resigned his position for personal reasons, opting “to be closer to his family and loved ones in Europe.” He will remain with the company as a strategic advisor to the company’s board of directors “to ensure continuity” as Reichenbach returns to the CEO position.
“I was honoured to serve as Flow’s CEO, and I will continue to support the Company in my new role as Strategic Advisor and as a committed shareholder of the Company,” Patarnello said in the release. “I am certain that Flow’s brand will continue to pursue its innovative growth path and inspiring role within the premium water category in North America. I will continue to offer my experience and passion to the Company to ensure that it realizes its ambitions as a leader in sustainability and premium hydration.”
Founded in 2014, Flow produces a line of premium alkaline spring waters in Tetra Pak packaging. Headquartered in Canada with operations in Virginia, the company went public on the Toronto Stock Exchange last year. Patarnello was named as CEO in March 2021 to help lead Flow as it transitioned into a public company.
“Flow’s Board of Directors wish to thank Maurizio for having guided the Company during this critical period. His leadership, experience and disciplined approach have delivered continued growth, furthered innovation and increased distribution while transforming Flow into a public company,” Reichenbach said in the release. “I personally wish to thank Maurizio on behalf of our shareholders for his many contributions to our brand and the growth in both Canadian and U.S. markets. I am looking forward to continuing our work together on strategic development and, together with our Executive Team, continuing the cost discipline, focus and priorities as laid out in our strategic framework.”
In its Q1 fiscal year 2022 earnings report for the three months ending January 31, Flow reported year-over-year consolidated net revenue growth of 32% to $11.9 million for the quarter. Net revenue for Flow’s packaged beverages was up 48% in retail and 27% in ecommerce, for a combined 40% increase. Net revenue from co-packing operations grew 27% in the quarter.
According to the press release, Flow’s waters are currently available in over 30,500 retail doors across the U.S. and Canada.
Updated (June 2, 2022):
Speaking to BevNET on Wednesday, Reichenbach said the company had agreed prior to hiring Patarnello that he could continue to live in Europe for much of the year while serving as CEO, but would need him to be on site in Canada and the U.S. “at least 50% of the time, if not 75% of the time.” He credited Patarnello with overseeing Flow’s transition to a public company, establishing a new strategic framework, and improving sales in the U.S. market.
“We accomplished a lot of our goals that we set forth from a management perspective,” Reichenbach said. “And the traveling, obviously, it’s pretty intense with the current climate as well. So he wanted to be closer to his loved ones and his family after doing this for 30-plus years of his career. He thought it was a good time, and the company was ready for him to step down and me to step back in on the day-to-day as a CEO.”
Reichenbach noted that in his role as executive chairman he was still active in the brand’s daily operations, responsible for running capital markets and shareholder relations. While he worked closely with Patarnello on key decisions, Patarnello was primarily responsible for managing the executive team. Moving back into the CEO position, Reichenbach said he now feels comfortable running a public company after the past 15 months of experience.
“Before hiring Maurizio, I hired every one of the executives that are currently working,” he said. “So I’ll continue to do that, and that’s the only difference, I’ll be running the day-to-day operations on top of running the capital markets and shareholder relations [in coordination] with the CFO.”
Flow’s returning CEO backed the brand to hit its current guidance of 45% to 55% top-line growth this fiscal year. The company will announce its Q2 FY2022 earnings results on June 14.
“We’ve provided guidance of 45 to 55% top line growth on the Flow core branded products, and we’re still confident on that guidance,” he said. “And at the same time we’re starting to learn how to run the company as a lean public company. So we’re moving towards a path to profitability and our EBITDA losses were going at a range of a reduction of 45 to 50%, so we feel we’re well in our target range of that.”