Flow Beverage will be filling a few extra TetraPak’s ahead of the planned divestment of its Aurora, Ontario production facility. The company announced today it signed a new co-packing agreement with beverage brand Joyburst that will see 15 million Joyburst Hydration branded beverages produced from the facility each year.
The deal is a win-win for Flow and Joyburst, the former of which believes this new co-packing agreement will make the facility more attractive to prospective buyers. Per terms of the deal, Joyburst is “guaranteed” that the facility will make a total of 45 million units over the course of its three-year contract.
“This agreement reinforces our commitment to maintaining our extraordinary 200% year-over-year growth rate since our inception,” said Brad Woodgate, founder and CEO of Joyburst. “The beverage industry is incredibly competitive, and for us to sustain this level of growth into 2024, it signifies not only the strong support and resonance we have with our valued retail partners but also the growing demand among consumers for healthier alternatives within the hydration sector.”
Canada-based Joyburst was launched as a zero sugar energy drink line in October 2021 and this past April, expanded the platform further with the launch of Joyburst Hydration.
The new line comes in Peach, Strawberry Lemonade and Watermelon flavors; each 16.9 oz. TetraPak carton contains a blend of Vitamin B1, B3, B6 and B12 in addition to magnesium, phosphorus, potassium and calcium. Joyburst Hydration is available online and at Costco stores for $36.99 per 12-pack or $2.10 per carton.
Woodgate is also the founder of Wellnx Life Science (Slimquick) and No Sugar Company. Joyburst’s flagship-seven SKU energy line contains 200 mg of caffeine per 12 oz. can and it also sells two stick pack versions of the energy products in Frosé Rose and Peach Mango flavors.
According to Woodgate, Joyburst has been strategically expanding the distribution of its hydration products and will be on-shelf at Costco stores in the retailer’s Canada East, West, Mexico, LA Region and San Diego regions. He said Joyburst has also secured agreements with “several highly sought-after gas/convenience channels across North America” which are set to launch in Spring 2024.
While the deal brings substantial production capacity to Joyburst’s operations, Flow will see some near term wins from the agreement as well. The publicly traded Canadian business is in the process of divesting the facility as it works to shift to an asset-light business model; according to Flow CEO Nicholas Reichenbach, the agreement helps unlock more value in the interim, which, when it opened in 2017 was said to have a daily production capacity of 120,000 cartons.
“It’s a significant win for the co-packing segment of our business,” said Reichenbach. “The stronger our co-packing business, the better the expected outcome on the sale of Aurora. This deal is great for the divestment process because it demonstrates the demand for Tetra Pak production, it will add to the facility’s profitability and Joyburst is a great partner with attractive growth prospects.”
Proceeds from the eventual sale of the facility will be utilized to help push Flow to profitability in the near term. Reichenbach said the facility has generated interest from prospective buyers and the company is considering a variety of deal structures.
“Ultimately, we need the best partner to continue to grow the flow, provide cash to invest into the brand and ultimately get to profitability,” said Reichenbach “The type of buyer could be a world class manufacturer, CPG company or a private equity group all of which are great strategic partners for Flow’s long term goals.”