Canada-based Flow Beverage Corp. has struck a new agreement to manufacture drinks for BioSteel.
The three-year deal will see Flow Beverage manufacture and package BioSteel beverages in the Tetra Prisma format, an octagonal carton. The business has manufactured BioSteel-branded beverages since 2020.
The estimated take-or-pay revenue to Flow Beverage is set to be over $19m throughout the term of the agreement.
Flow Beverage founder and CEO Nicholas Reichenbach said having “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”.
He added: “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.”
The agreement provides for the “committed purchase of 12 million units” within the first four months of the deal, according to a statement.
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Circa one million packs per month will be produced for the remainder of current calendar year, followed by a cumulative minimum production of 24 million packs for each subsequent calendar year.
Founded in 2009, BioSteel produces ready-to-drink sports drinks and powders that have been on sale in North America. The nutritional sports drinks producer was bought by Canopy Growth 2019 for an undisclosed sum.
Last December, BioSteel Sports, a recently incorporated company controlled by Dan Crosby, acquired certain assets that were previously owned by BioSteel Sports Nutrition from DC Holdings.
Dan Crosby, CEO of BioSteel Sports, added that the agreement “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,” he said.
Canopy Growth was given the green light in November to sell the assets of its struggling BioSteel brand to two separate buyers.
Meanwhile, last January, Flow Beverage announced an internal restructuring as the group strives to reach profitability and accelerate towards an “asset light operating model”.
The alkaline spring water company reduced its workforce as it shut down a production facility in Virginia and enacted a plan to “further optimise the company’s operations” with an internal restructure, thought to save the group roughly C$17m ($12.6m).