Canadian Packaging

Clearly Canadian Strives For Profitability With Cott Co-packing Deal


October 28, 2008
by Canadian Packaging Staff

Sparkling water products distributor Clearly Canadian Brands of Toronto has struck a North American bottling deal with beverage co-packing giant Cott Corporation in hopes of extending the former B.C. company’s market reach across the continent.

Described as part of a larger corporate revamp aimed at getting the money-losing company back to profitability by the end of the fourth quarter of 2008, the agreement calls for Cott to produce a rebranded line of Clearly Canadian flavored waters in 20-ounce and one-liter PET (polyethylene terephthalate) containers at various “strategically-located” Cott plants across North America.

While Clearly Canadian plans to continue selling its existing line of glass-bottled water products, the company has decided to hold off on its earlier-announced acquisitions of specialty foods producers Baldwin Street Kosher and Crofters Foods in order to improve its financial position.

“This agreement allows us to team up with one of the largest beverage bottling and retailing organizations in the world,” says Clearly Canadian’s chief executive officer Bobby Genovese.

“With this agreement, we will begin producing and delivering our popular drinks in a cost-effective manner, resulting in a more profitable business model and better pricing for the consumer.”

Genovese says recent acquisitions of niche drink producers My Organic Baby and DMR Foods and a change in its production operations, including a focus on making drinks from concentrate, “is resulting in a drastic reduction in the production and delivery cost that have plagued our beverage division for years.”

Couple with the Cott distribution deal, these changes are projected to enable the company to double its annual revenues to about $30 million, according to Genovese’s recent open letter to the firm’s shareholders, adding that the company is also planning to seek a Canadian stock listing.

States Genovese: “We are very focused on the success of all our current divisions. Our healthy snack divisions and our organic baby-food divisions are growing and we are incredibly excited about the launch of the new Clearly Canadian sparkling flavoured waters.

“We expect to gain significant market share over the next few years,” Genovese asserts, “and feel our resources are currently better used towards the expansion of this now very profitable product line.

“Through the building of our existing businesses and the move to profitability, we feel we will then be in a superior position as market and credit conditions improve to bring new acquisitions into our fold.”