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A pricey playbook led sports nutrition brand BioSteel to bankruptcy, but its new owner has a different strategy


A pricey playbook led sports nutrition brand BioSteel to bankruptcy, but its new owner has a different strategy

BioSteel’s eight-year deal with the NHL and NHLPA lasted less than two years.Getty Images

In July 2022, Canadian sports nutrition brand BioSteel signed an eight-year deal worth approximately $14 million annually to become the official sports drink of the NHL and NHLPA. It was the largest sports marketing investment to date in a portfolio that already included deals with Patrick Mahomes, the Los Angeles Lakers and US Soccer.

However, it was this kind of aggressive spending that proved to be a deciding factor in BioSteel’s sudden demise. Ontario-based Canopy Growth bought a 72% stake in the brand for $37 million in 2019, but BioSteel filed for bankruptcy last September. It was eventually purchased by Dan Crosby, a Canadian businessman who believed he was in a position to prosper in his second life.

“What the previous ownership achieved was tremendous brand awareness,” said Crosby, whose Coachwood Group of Companies now owns the brand. “They put a lot of money into it – it was almost a no-brainer when this came up.”

BioSteel was founded in 2009 by entrepreneur John Celenza and former NHL player Mike Cammalleri, and with a product formulated by famed hockey coach Matt Nichol, it quickly gained traction in hockey circles. Throughout the 2000s, BioSteel built a roster of athlete endorsers, including top NHL and NBA draft picks Connor McDavid and Andrew Wiggins. BioSteel has also dipped its toes into team deals, purchasing the naming rights to the Toronto Raptors’ training facility for an undisclosed sum in 2015.

A pricey playbook led sports nutrition brand BioSteel to bankruptcy, but its new owner has a different strategy

The brand seemed poised for a breakthrough when it was acquired by Canopy Growth in 2019, which was eyeing the potential integration of CBD into some BioSteel products. Constellation Brands, a major beverage distributor and an investor in Canopy, is set to provide BioSteel with a broad presence in the United States. In a 2021 report, Goldman Sachs described the brand as “an emerging disruptor in the sports drink category” that is “reminiscent of early-stage body armor.”

But red flags started popping up during Brand’s first season with the NHL. With Canopy’s core cannabis business already faltering, the company fired Celenza from BioSteel in March 2023, along with 20 other employees. Two months later, the publicly traded company revealed that it had been the subject of an SEC investigation after self-reporting “material errors” in recent filings related to BioSteel’s revenues. After review, the company found that it overstated BioSteel’s 2022 revenue by $7.3 million. It later determined that it had materially overstated the value of the brand, and recognized a goodwill impairment loss of $41.8 million.

Last September, Canopy halted its financing of BioSteel and filed for bankruptcy protection for the brand, calling it a “significant drag on Canopy Growth’s profitability and cash flows.” Sales doubled in fiscal 2023 to $69.6 million and market share in Canada tripled to 12%, an indication that the NHL deal has had an impact north of the border. But with the brand burning through $15 million in cash a month and failing to regain traction in the US (market share was less than 1%), costs outpaced revenues by $40.6 million.

“Canada has been a strong business,” Celenza said. “In the US, we got all our calculations based on relationships, the effectiveness of the product, the fact that it was fundamentally different, and the athletes who had an association with it, but sales growth in the US definitely needs time to develop.”

The NHL topped BioSteel’s list of unsecured creditors with $6.4 million. Other players on the list include the Lakers ($1.9 million), Miami Heat ($697,000), USA Football ($494,000), Andrew Wiggins Enterprises ($494,000), Brooklyn Nets, Barclays Center ($457,000) and Blue Jays owner Rogers Media. ​Inc ($313,000) and Philadelphia. 76ers ($217,000) and USA Hockey ($144,000).

When BioSteel went up for sale in a court-supervised process, Crosby wasn’t the only one looking forward to it. The NHL has expressed interest in buying the company out of bankruptcy, though it has not finalized bidding, multiple sources said. Celenza, BioSteel’s longtime CEO, also led the group that made a presentation.

“Our bid was very competitive, and it was a group made up of all the people who cared deeply about the brand and made it what it was before the acquisition,” Celenza said. “I’m not going to lie, it was a huge blow when we lost.”

Crosby’s Coachwood group of companies bought the BioSteel brand, while a separate group bought the US manufacturing facilities. Canopy’s total revenue from the two sales was $22.4 million, and one source suggested the brand likely represented about a third of that amount.

Crosby had the option to retain some of BioSteel’s existing sponsorship agreements after purchasing the brand, including the NHL deal, but felt at the time that he needed to abandon them due to the uncertainty surrounding BioSteel’s revenue situation.

“There was no guarantee that some retailers would reserve shelf space for BioSteel,” Crosby said. “So it was very difficult to be able to take on those fixed costs without any idea who was going to sell the product.”

A pricey playbook led sports nutrition brand BioSteel to bankruptcy, but its new owner has a different strategy

BioSteel has been a common sight in the Toronto Blue Jays dugout, as well as its other sports partnerships.Getty Images

BioSteel’s bankruptcy led to a diaspora among athletes and sponsored properties. McDavid was quickly acquired by Coca-Cola’s BodyArmor brand as part of its entry into the Canadian market earlier this year and replaced BioSteel in US Soccer. Mahomes, Raptors and Lakers have allied with Prime Hydration, founded by boxers/influencers Logan Paul and KSI, which has gained significant market share. The Blue Jays started the new MLB season with PepsiCo-owned Gatorade products in their dugout.

The NHL held discussions with six brands when it returned to the market earlier this year for a new sports drink partner. BioSteel, now owned by Crosby, has made a bid to retain sponsorship rights, which a source said includes an undisclosed but smaller guaranteed fee as well as a sales revenue sharing component. The league preferred a deal with more guaranteed revenue.

It gets that with BodyArmor, which was announced as the league and players union’s new sports drink partner last month as part of a deal that began during the playoffs and will continue through the 2028-29 season. While the duration of the deal is shorter than that with BioSteel, the annual value is roughly the same as the agreement at $14 million per year.

In the months after taking office, Crosby was able to quickly resume production of key BioSteel products and re-establish important retail relationships with Canadian Tire, Costco and others. While he eventually wants to bring production in-house, Crosby has signed a three-year deal worth at least $19 million to have manufacturer Flow Beverage produce BioSteel.

The recovery has been so rapid, in fact, that Crosby now says the company could have kept the deal former BioSteel ownership signed with the NHL and NHLPA if it had known then that it would ultimately retain several major retailers.

“Looking back four months from that point, I would have done it [kept the previous NHL deal] “Because we’ve been able to keep Costco, Sobeys, Loblaws, Sport Chek, Canada Tire, Pro Hockey Life, 7-11, Sport Experts and Pure Hockey in the U.S.,” Crosby said. “We ended up keeping almost all the major retailers that we really needed to keep the brand relevant.”

Previous BioSteel marketing partners and their new sports drink partners

Brooklyn NetsBarcode
Los Angeles Lakersprime minister
Toronto Raptorsprime minister
Patrick Mahomes (Chiefs QB) – prime minister
Philadelphia 76ersPure fuel
Toronto Blue JaysEnergy drink
FootballBody armor
NHL/NHLPABody armor
Connor McDavid (Oilers C) — Body armor

With BioSteel back at major retailers and free of heavy sponsorship commitments, Crosby is focused on building brand loyalty through youth sports, grassroots initiatives and influencer marketing, primarily in Canada, for the foreseeable future. Crosby said 80% to 90% of sales come from Canada, and the plan is to focus U.S. distribution on hockey-centric markets where the brand is well known, primarily the Northeast and Midwest.

Last month, the company acquired a prep school hockey program in Windsor, Ontario — now called BioSteel Sports Academy — in partnership with Powertech Hockey Training. Crosby expects to add more sports, including baseball, basketball and golf, to the academy’s offerings.

“We will document the path to becoming elite athletes and incorporate some of the elite athletes that we will have access to outside of our camps and academy,” Crosby said. “It will be an easy way to create the content, marketing and advertising that we will be able to produce.”

The company has also partnered with smaller organizations in Canada, such as the Ontario Minor Hockey Association, and has built relationships with so-called nano and micro-influencers, from a 6-year-old hockey prodigy with 15,000 Instagram followers to a former hockey player. Minor league hockey player turned podcaster, Daniel “Diamond Hands” Amesbury.

It’s a far cry from the expensive playbook that built the BioSteel brand, but one that Crosby believes will allow him to build a sustainable business with a loyal following.

“You’ll see us come back as a stronger brand,” Crosby said. “It may not be as tall as a house under construction, but at least it won’t be a house of cards.”





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