Ontario, Canada-based Flow Alkaline Spring Water opened this month a $15.5 million, 55,000 square foot manufacturing facility in Augusta County, Virginia.
Flow founder and CEO Nicholas Reichenbach told BevNET that the facility will act as a new “homebase” for manufacturing of products sold in the U.S. while its Canadian operations will serve the international market. The new plant’s Shenandoah Valley location also strategically places Flow’s U.S. production about 15 minutes from a major Amazon distribution center, Reichenbach said, reducing both shipping costs and carbon emissions.
“The number one reason why we’re here is it allows us to deliver on the quality of the product that we want for our existing consumer base, but then it also reduces the environmental impact we have against delivering that to them,” Reichenbach said. “We can ship the product within one trucking day, lower our carbon emissions, but also deliver our customers a U.S. made product from a U.S. heritage spring. That’s the reason why we’re here.”
According to Area Development, Flow is also “eligible to receive Sales and Use tax exemptions on manufacturing equipment,” and could also receive benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program and the Virginia Port Tax Credits Program. Through a grant, the Virginia Opportunity Fund will also provide $250,000 to Augusta County to assist Flow.
The new facility is expected to create 51 jobs, of which Reichenbach said 40 have already been filled. The remaining 11 jobs are expected to be added next year when Flow installs additional production lines.
According to Reichenbach, the new facility draws water from Seawright Springs. The water is naturally alkaline and features a “near identical” mineral makeup to Flow’s Canadian water source. In locating a serviceable U.S. water source, Reichenbach said he surveyed more than 20 springs before finding a location that matched Flow’s taste profile.
“Not only does the spring have almost identical water to our Canadian source, it’s also within one trucking day of 65% of the [U.S.] population,” he said. “It really provides a great U.S. expansion foothold for us as we deal with the immense growth that we’re seeing.”
Flow launched in the U.S. in 2017 and is currently available in about 10,000 retail stores nationwide. In addition to Whole Foods, the brand is available in Sprouts, Safeway, H-E-B, Tom Thumb, and Stop & Shop stores among other natural and conventional grocery chains. According to Reichenbach, the brand recently entered more than 4,500 CVS locations as a part of the retailer’s cold vault program. Moving forward, Reichenbach said Flow will “continue to dominate” natural grocery accounts and will begin adding more drug, mass, gas station and convenience retailers by 2021.
“As we broaden distribution, we are going to heavily invest in the U.S. to really build a classic DSD model, fortifying our channels and heavily investing in the brand,” he said.
Flow has seen 400% year-over-year growth, Reichenbach said, with an estimated 60-70% coming from the U.S. market. In 2018, Flow revenue growth compounded 15-25% month-over-month. Reichenbach estimates that the brand currently has a repeat consumer base of about 8 million people worldwide, up from 4.5 million last year.
Reichenbach noted that the new Virginia facility will allow the brand to promote itself as an American made product “sourced from an American heritage spring.” The label, he said, will appeal to American consumers who prefer domestically manufactured products.
Earlier this month the company welcomed pop star Shawn Mendes and his manager Andrew Gertler as investors and advisors. According to Reichenbach, Mendes — a Canadian native — was an early customer of Flow prior to its U.S. launch. Mendes will serve as the brand’s Sustainability Ambassador.
“It’s not just about someone’s money. It’s about what we are going to do together,” Reichenbach said. “Shawn, myself, Andrew, our entire team, and even Tetra Pak are starting to lobby around Shawn’s vision to remove one plastic bottle at a time and replace it with a more environmentally friendly alternative.”