The stakes have become high in the functional beverage category with enhanced and fortified waters being taken on by the likes of Coca-Cola - meaning innovation and marketing clout will be key drivers in this category.
Based in Vancouver, Clearly Canadian's brands include Clearly Canadian sparkling flavored waters and Clearly Canadian dailyEnergy, dailyVitamin, and dailyHydration natural enhanced waters. These are distributed in both the US and Canada, as well as in various other countries.
In order to render its business more secure and not rely on only the water category, the company recently acquired the DMR Food Corporation and My Organic Baby. It marked its first steps into the organic and natural products industry with a full line of organic baby and toddler branded foods.
Under the current financing scheme, the Company will receive gross proceeds of approximately $9mn. This is by means of the sale of a senior convertible note with a $2.33 conversion price and a 9 percent interest rate. The investors were also issued 4,017,167 five-year warrants. Net proceeds will be used for general working capital.
"With the completion of these transactions, we will have over $10 million of cash to expand the execution of our growth plan and to fulfill our commitment to deliver consumers healthier choices," stated Brent Lokash, CEO of Clearly Canadian.
The company is looking to continue strengthening and diversifying its brands outside the enhanced water category.
"Now, with the support of experienced financial institutions, we have the tools necessary to once again achieve the success this company enjoyed when it helped launch the alternative beverage industry," said Lokash.
This year, Coca-Cola made waves in the fortified water industry when it purchased the maker of Vitaminwater, Energy Brands, for $4.1bn. And with beverage giants getting in on the action, the competition looks set to only get tighter.
According to Euromonitor, in the US alone, the market for functional/fortified bottled water ballooned from $206mn in 2002 to $1.4bn in 2006.
