View from the C-Suite: Flow wants to keep surging

Former Nestle Waters CEO and chairman Maurizio Patarnello sees plenty of room for expansion in the North American marketplace.

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When Maurizio Patarnello left Nestle Waters to join Toronto’s Flow Alkaline Spring Water as its CEO in March, he did so because he saw opportunity.

The company, which started trading on the TSX last month, is one of the fastest-growing premium water brands in Canada, and it is “perfectly positioned” at the intersection of three rapidly expanding categories in the space: premium, sustainable and functional.

But Patarnello is determined to keep driving growth for the brand, which is why Flow has brokered a distribution agreement with Honickman – a group of companies that includes PepsiCo Bottling Company New York, Canada Dry Potomac Corporation and Canada Dry Delaware Valley Bottling Company.

That deal will see Flow’s products land on more shelves in the New York area, as well as counties of Virginia, Maryland, Pennsylvania and Delaware and in Washington, D.C., expanding the business to a market of 40 million potential new customers.

It’s all part of a plan to keep scaling Flow within North America that Patarnello discussed with strategy.

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You recently took on the role of CEO at Flow from Nicholas Reichenbach. How has your approach differed from his, and what plans have you been implementing since taking on the job?

The company has made significant efforts in the past few years to get started, and it took a lot of effort and entrepreneurship to do that. But I bring my longtime experience in the category to the company. I’ve been in the beverage business for more than 18 years, and I was the chairman and CEO of Nestle Waters, which is the largest company in the world in the packaged water business. I’m putting that experience at the service of the company, which is entering into a new phase where it is public and that means significant change. I’m looking to use my experience to move the company forward.

As someone with longtime experience in the category, what opportunities do you see for Flow?

The reason why I joined Flow after my retirement from Nestle Waters is I see a great opportunity to take this brand all of the way. That means making it one of the leading brands in the premium water space. The strength of the brand is that it is at the intersection of the three fastest growing segments in the category. Number one is functional – Flow is natural alkaline spring water, which is one of the fastest-growing segments in the category for a number of years. At the same time, the brand is in the sustainability space, which is also growing very fast in the beverage business specifically and the world of business generally. And it’s a premium brand, which has been growing continuously for the past five years. It’s perfectly positioned in these three segments, which makes the brand absolutely unique and gives it numerous points of differentiation.

What are the marketing priorities for Flow?

The loyalty of our consumer is unbelievable, so the focus has been on expanding our distribution, creating trial with new consumers, and shaping the image of the brand as one that is functional, has great taste and a sustainability story. These are the differentiating points of the brand on which we are focusing to create a distinctive image with the consumer.

The company is on a growth trajectory that is still very fast. We published our first-half results when we went public and they show a net revenue growth of 97%, which is substantial in a category that’s already well-established. It’s our aim to expand the business and make sure it touches as many consumers as possible, widening distribution and investing in the brand to shape its image. The brand is loved by its target consumer, starting with the health and wellness movement, and now we’re expanding into other groups.

Are there any markets in particular that Flow has its eye on?

The North American business is huge. The U.S. and Canada together make the largest premium water market in the world. There are so many opportunities in North America that we want to seize. We’re expanding into adjacent categories. We’re in flavoured water with our organically certified flavours that are award winners worldwide; we’re in collagen water, which we launched last year; and also we announced we are going to be in vitamin water at the beginning of next year. The opportunities are so great in North America that we are going to be busy growing in these markets.