View from the C-Suite: Flow taps the power of celebrity

How founder and CEO Nicholas Reichenbach plans to overtake the brand's chief competitors in premium packaged water.

Flow_CEO

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Flow Alkaline Spring Water continues to gain momentum.

The premium packaged water company, launched in 2015, made news on a few occasions this year. In June, it announced a partnership with Gwyneth Paltrow (and an extended partnership with the celebrity’s lifestyle brand, Goop). It also teamed up with artist Shawn Mendes and his manager Andrew Gertler, bestowing the former with the title of “sustainability ambassador.”

And last week, it expanded production to the U.S., where it has seen 400% year-over-year growth, and will begin sourcing its naturally alkaline mineral spring water directly from the Seawright Springs in Augusta County, Virginia.

Today, the Canadian brand sees 60% of its sales come from the U.S., 20% from Canada and 20% from other international markets, mainly Europe and China, according to founder and CEO Nicholas Reichenbach. It currently has six million customers across North America  and is moving towards 12 million by the end of this year  and is expected to deliver 120 million packs of Flow in 2020.

That gives it roughly 10% market share in the premium water category, according to Reichenbach. But it won’t stop there: Flow may currently be about a third of the size of its chief competitors, Fiji and Avion, in the U.S., but Reichenbach believes it may eventually overtake them, becoming the number one premium water brand by 2021 or 2022. Strategy sat down with the founder to chat about the company’s current growth trajectory and marketing plans.

GP

You spoke to strategy back in 2017, when Flow was first named a certified B Corp. How has your marketing strategy evolved since then? 

There’s hasn’t been a shift, more of an evolution of our consumer. In 2017, we had fewer than a million customers. By the end of 2018, after we moved into the United States, we had 4.5 million customers. That year, we [commissioned] two or three independent consumer reports and realized that we had a strong product-market fit and that people that drank Flow were predominantly the wellness women, on average aged 39 to 41, and into health, wellness, fitness, and shopping for organic, natural and better-for-you products [with] better-for-you packaging. That evolution really started us thinking about how to build a marketing platform to celebrate this customer. That brought us to signing Gwyneth Paltrow as our first wellness celebrity spokesperson. Since then, we have garnered more than 800 million impressions and launched our first international marketing platform, focused on the wellness woman and on building international exposure for the brand.

Tell us about the scope of your partnership with Goop, which Paltrow launched as a natural health company in 2008. Many people have called into question some of the other products or claims Goop promotes. Was that a concern for you? 

It’s a 360 integrated marketing campaign. The deal [spans] all their media platforms. We sponsor their Goop Wellness Summits; they integrate us into their content strategy on their website and sell our products through their ecommerce platform. And we’re bringing it into our retail environment with a campaign called “Supernatural.” It’s a 360 approach to combining our audiences, which are exactly the same audiences.

We’re both dominating in the wellness woman [segment]. More than 70% of our customers are female. So we have a consumer match. I’ve had nothing but amazing experiences with Paltrow and her team. Our brand and product strategies are very aligned, and the way that we market our products, they’re very similar. So we’ve never had any [issues] with the way [Goop] markets and promotes its other products in conjunction with ours. In fact, they’re very complementary.

Last month, you also signed a deal with artist Shawn Mendes and his manager Andrew Gertler. Do Mendes and Paltrow serve different roles as brand ambassadors? 

Absolutely. Gwyneth is all about our alkaline mineral water and eco-friendly pack. Shawn represents the younger version of our target audience, the 20 to 35-year-old female. He’s very much the inspirational drive behind the brand evolution. Shawn came on to advance our sustainability platform within his audience and [outside], to really show that we can really make a positive impact on the planet by displacing plastic bottles one purchase at a time. So they’re different, but connected by our brand values which are “better for you, better for the planet.” Shawn’s really helping us build out the better for your planet message, and Gwyneth is helping us build out the better for you.

Consumer perceptions of health and wellness have changed since Flow launched and continue to evolve rapidly. What are you doing next to try to make the most of emerging opportunities? 

There are two innovations that we’re working on for next year. Our first CBD-infused, functional beverage line, called Flow Glow, launches in Canada and the U.S. on December 15. We’ll then be releasing another three products with multiple flavours to really grow within our core audience, with functional, organic ingredients mixed with our alkaline mineral water. The first is an oxidant beverage with grape-seed and grape-skin abstract [combined] with CBD. Then we’ll be launching into other segments next year, both in Canada and the U.S. From an innovation perspective, we’re moving more into organic beverages and providing a functional beverage for each needs-state throughout the day. The second thing is we’re advancing our package at the end of this year and going to 97% renewable resources. We’re only 3% off from having a fully compostable package. That’s a huge advancement for our sustainability platform.

This interview is part of a series for Strategy C-Suite, a weekly email briefing on how Canada’s brand leaders are responding to market challenges and acting on new opportunities. Sign-up for the newsletter here to receive the latest stories directly to your inbox every Tuesday.

The interview has been edited for length and clarity.