CANADA'S CHOICE STRIKES SUPPLY DEAL WITH FLEMING

BRIAN DUNN

TORONTO -- Canada's Choice Spring Water Inc., here, has entered into a supply agreement with Fleming Companies Inc., Kansas City, Mo., for its newly launched Canada's Choice Rocky Mountain Water.

Terms of the agreement were not revealed, but Canada's Choice expects sales will jump from $2 million (Cdn $3 million) last year to about $10 million this year as a result of the new deal, according to company executive vice president Randy Von Hagen.

"Fleming is the second-largest food wholesaler in the United States and supplies about 3,000 retailers. Our initial agreement with them will see our products distributed in about 250 retail outlets in Arizona, New Mexico, Nevada, Texas and California," Von Hagen said. The stores include ABCO, Southwest Supermarkets, IGA and Value King.

In order to meet the increased demand, Canada's Choice has spent close to $700,000 to retrofit its plant in High River, Alberta, with high speed PET bottling equipment, which now has a capacity of 500 bottles a minute. The natural spring water will be priced between European imports and local state bottled water, said Von Hagen.

"Although there's a lot of competition in this category, when consumers see the brand is from Canada, at least they'll stop and look at our product," he added. "It will also be featured on the front page of the June issue of Fleming's magazine it distributes to retailers."

This is the company's initial entry into the U.S. southwest market. It has been selling private-label products in the northeastern U.S. for the past four years and launched its Canada's Choice brand there last year. The eastern market is served by the company's distribution center in Grafton, Ontario.