Flow Water and BeatBox Beverages are extending their manufacturing agreement for a further year while raising its high minimum total revenue by nearly $100 million, the companies announced in a press release this morning.
The deal is being financed by BeatBox’s commitment to purchase a $2 million convertible note by October 31 secured against the assets of Flow, a publicly traded company on the Toronto Stock Exchange.
The upgraded projections – with minimum total revenue increasing from $115 million to $213 million over the five-year term – will require the addition of two production lines at Flow’s Aurora, Ontario facility “to satisfy the increased demand for co-manufacturing from BeatBox, in addition to other co-manufacturing agreements recently announced and to accommodate anticipated growth in the Flow brand.”
Though the deal was announced last November, BeatBox did not officially begin commercial production at the Aurora facility until June, due to the installation of a fourth TetraPak line and additional equipment to accommodate the increased volume.
For Flow, the move reflects its decision to take the facility off the market. Flow founder/CEO Nicholas Reichenbach had previously spoken about how co-packing deals with brands such as Joyburst and Biosteel were intended to boost the plant’s value to prospective buyers.
“We are thrilled to be expanding our relationship with BeatBox by helping them scale in a sustainable way,” said Reichenbach in a press release. “Our co-pack operation has achieved a number of milestones in the past year, which include welcoming new partners, adding a fourth production line and upgrading the Aurora production facility to produce alcoholic beverages.”
BeatBox sells its ready-to-drink boozy punch (11.1% ABV) in 16.9 oz./500 ml TetraPak cartons in more than 83,000 stores in North America.
“As we continue our industry-leading growth, we are excited to expand our partnership with Flow, securing our capacity needs well into the future, and doing so with a partner that shares our commitment to environmental and social responsibility,” said BeatBox CEO Justin Fenchel. “Our mission is to make the world more fun while doing right by our people and the planet, and this milestone is a significant step towards achieving that.”