Flow Beverage Corp Could Get A Boost In Path To Profitability As Nonalcoholic Beverage Market Heads For A Summer Rally

Rhea-AI Summary

Flow Beverage Corp positioned to capture surging demand in non-alcoholic beverage sector

Positive

• Flow brand net revenue grew 98% in Q2 2023, driven by new distribution agreements
• Healthy revenue gains, growing 26% YoY in 2022

Negative

• None.

TORONTO, ON / ACCESSWIRE / August 23, 2023 / The National Oceanic and Atmospheric Administration (NOAA) forecasted a hotter-than-normal summer for most of the United States. As Americans look to stay cool and avoid heat exhaustion, sales across the beverage sector are expected to rise. Some of the biggest spikes in demand are expected in categories across the non-alcoholic segment as consumers look for beverages that offer health or wellness benefits.

Flow Beverage Corp (TSX:FLOW)(OTCQX:FLWBF), one of the fastest-growing sustainable water brands in North America, is better positioned than ever to capture more of that surging demand thanks to expanded retail distribution, a growing e-commerce storefront and a portfolio of premium water products that cater to the shifting priorities of today's consumers.

Growth In The Non-Alcoholic Beverage Segment Driven By Increasing Consumer Focus On Wellness And Sustainability

The demand for nonalcoholic beverages really began to take off in the middle of the pandemic. When COVID-19 first hit, 60% of American adults reported drinking more alcohol than they used to, citing both stress and boredom as pandemic lockdowns swept the globe and upended daily life.

But, by about a year into the pandemic, the trend started to shift. Sales of non-alcoholic beverages began to spike, reaching $11 billion by 2022 as consumers became more conscious about their health and wellness.

The non-alcoholic beverage trend extends to related wellness segments, too. Functional beverages - including sports drinks, nutraceutical drinks and other beverages that offer health or wellness benefits - have grown substantially as consumers become more conscious about their drink choices. In 2019, before the pandemic, the global functional beverage market was valued at just over $90 billion. By 2022, it had surpassed $204 billion. That growth was largely driven by increased demand for beverages offering immune support or enhanced hydration.

Likewise, that growing shift toward making more intentional purchases is happening alongside a greater emphasis on sustainability. Consumers are increasingly fed up with single-use plastic, for example, both for its environmental hazards and the potential health risks of chemical leaching. A global survey last year found that 75% of consumers wanted to ban single-use plastic.

Meanwhile, 45% of consumers are already actively making an effort to avoid plastic packaging when they can. That's helping the sustainable packaging market grow from an estimated $266 billion to nearly $534 billion over the next 10 years.

Flow Beverage Is Positioning Itself As The Premium Water Brand For Today's Wellness And Sustainability-Minded Consumer

Flow Beverage Corp's commitment to renewable packaging, responsible sourcing and premium ingredients has helped it develop a product that meets every need of the globe's increasingly wellness-oriented and eco-conscious consumers.

The sustainable beverage brand offers a portfolio of naturally alkaline spring water that's rich in electrolytes and minerals and packaged in a plastic-free carton that's 100% recyclable and up to 75% renewable.

This year, Flow also launched a new line of vitamin-infused waters in three refreshing flavors like elderberry, cherry and citrus. The waters are infused with vitamin C and zinc to cater to consumers looking for immune-supporting beverage options.

The shifting consumer trends have already helped the premium water company enjoy healthy revenue gains, growing 26% year-over-year in 2022. In its earnings release for the second quarter, it reported CA$23.8 million in net revenue for the first six months of 2023, which was up nearly $3 million compared to the first half of 2022.

Flow brand net revenue grew 98% in the second quarter of 2023, driven largely by new food service contracts, including those with major retailers like Costco and Starbucks. Recent distribution agreements like these added over 10,000 locations to its distribution network, bringing the total to more than 54,000 locations across the U.S. and Canada.

Those same distribution agreements are expected to make Flow's portfolio of premium water products well-positioned to capitalize on the seasonal uptick in demand for hydration this summer, giving investors a reason to look forward to Flow's next earnings release in September.

Featured photo by Maddi Bazzocco on Unsplash.

Contact:

Marc Charbin
investors@flowhydration.com

SOURCE: Flow Beverage Corp

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