NEXE Innovations Inc (TSX-V:NEXE, OTC:NEXNF, FRA:FRA: NX5) said on Wednesday a commercial partner has begun transitioning a significant portion of its single-serve coffee pod volumes from plastic to the company’s compostable platform, a move expected to scale up production and support revenue growth.

The materials company said the phased transition, set to unfold over the coming months, could lift annual partner volumes to between 10 million and 15 million compostable pods.

The decision follows a validation process that included testing more than 10,000 cases across multiple distribution channels, with the partner reporting strong consumer feedback and confidence in the product’s performance and sustainability credentials.

The company has steadily increased production since launching commercially, with annual pod volumes rising from about 232,000 units in 2023 to 573,000 in 2024 and 1.8 million in 2025.

In preparation for higher demand, NEXE said it has shipped an additional 350,000 compostable pods across eight stock-keeping units, including two newly launched products, to customers such as ecoBeans Coffee, Bridgehead and a North American office coffee services distributor.

President Ash Guglani said the partner’s decision followed extensive testing and signals that the company’s platform is ready to support larger-scale volumes.

“(Their) confidence is a direct endorsement of our technology and operational readiness,” Guglani told investors.

“In parallel, we are actively evaluating strategic opportunities to accelerate commercialization and maximize shareholder value.”

He added that NEXE’s vertically integrated Windsor facility provides the capacity to absorb growth without significant additional capital investment, positioning the company to benefit from operating leverage as volumes increase.