The new ownership group at sports drink brand Biosteel has forged a three-year manufacturing partnership with fellow Canadian beverage maker Flow Beverage Corp.
The deal, announced today, is valued at around $19.3 million in revenue over the term, and commits Biosteel to the purchase of 12 million units within the first four months and a cumulative minimum of 24 million packs for the second and third year.
The agreement also has a take-or-pay provision requiring that BioSteel Sports pay Flow the equivalent of 80% of the value of the difference between the minimum annual volume and the actual volume purchased during the relevant 12-month period over the term.
Securing a production contract ensures that bottles of Flow, packaged in Tetra Prisma format, will keep coming off the line for DC Holdings Ltd., the Canadian sports nutrition portfolio company that purchased Biosteel’s Canadian business unit – including the brand’s IP, formulas and the bulk of its inventory – in November.
Manufacturing had been a sticking point for Biosteel in the past; after paying $19.5 million for Flow’s production facility in Verona, Virginia in November 2022, the company announced a shift to co-packing last July prior to its sale. That facility was subsequently sold to New Jersey-based Gregory Packaging Inc., producers of SunCup juice.
“I’m excited to announce that we’ll be starting production of the very popular ready-to-drink BIOSTEEL products at Flow,” said Biosteel CEO Dan Crosby. “This ensures our retailers will always have a steady supply. Our partnership with the Flow team has been fantastic, and we’re eager to keep BIOSTEEL’s momentum going strong in the market.”
For Flow, the move adds another name to its list of manufacturing partners alongside Beatbox Party Punch and Joyba. The alkaline water brand has been actively recruiting co- packing clients for its Aurora, Ontario production facility as part of a planned sale, with Flow founder and CEO Nicholas Reichenbach noting in a previous interview “The stronger our co-packing business, the better the expected outcome on the sale of Aurora.”
“Having also recently added BeatBox Party Punch alcoholic beverages and Joyburst energy drinks as co-pack partners, our Aurora production facility is scaling to meet this increased demand from brands and their consumers for premium and functional beverages offered in an environmentally conscious manner,” Reichenbach said in a statement. “The growth in our co-pack business is expected to contribute to ongoing improvements to profitability that have also included our restructuring, a transition to third-party logistics and the addition of a fourth production line in Aurora.”