It is always good when we are tracking a retail stock to get some sales data. It helps to reinforce the case for the company’s products, providing a good indicator of where it sits on the shelves with the consuming public.
HempFusion, which we have been following since it was just the glimmer of an IPO in the Toronto Stock Exchange’s eye, has just produced some key sales numbers for its OTC Topical Products.
HempFusion’s strength is its distribution
Regular readers will know that one of the things that really impressed us about HempFusion was the sheer breadth of its distribution network. Since then it has also acquired authorisation in Ireland and is seeking approval for distribution in the UK.
HempFusion told us that according to a recent NielsenIQ share report, it ranked top in both sales dollars and units sold at a major US Food & Drug Mass (FDM) retailer. This is very good news, demonstrating both HempFusion’s reach and consumer demand. While the retailer concerned remains undisclosed, we are told that it is a top five US grocery chain with national distribution.
“Consumers are validating our team’s mission of providing best in class products that adhere to the highest standards of regulatory compliance,” said Jason Mitchell, N.D., the Company’s Co-Founder and Chief Executive Officer. “Since its inception in 2015, HempFusion’s goal has been to develop and provide consumers with the highest quality products on the market, without compromise.”
HempFusion is meticulous in sourcing the right raw materials, ingredients, and delivery methods to help consumers live a more balanced lifestyle, and the FDM channel provides the company with an unprecedented distribution opportunity to help it reach those consumers, The FDM channel represents the largest sales opportunity for its products by dollar volume.
FDM remains a key part of HempFusion distribution strategy
A key factor with HempFusion has been this emphasis on distribution within the company’s culture. Many of its strategic decisions are taken with an eye on the regulatory requirements surrounding the sale of CBD products in the OTC market. The FDM channel has been a significant focal point of its strategic distribution plan.
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According to the Brightfield Group in Q3 2020 41% of CBD consumers reported they had started shopping in store again for products that specifically contain CBD. Specialty retailers and pharmacies reported an uptick in consumer-reported purchasing.
The numbers bear out the HempFusion distribution strategy of producing premium products with a focus on regulatory compliance, consumer messaging and at the right price point. This seems to be resonating well with US shoppers. HempFusion confirmed it is in talks with other top FDM retailers both in the US and abroad.
Note that HempFusion already distributes across all 50 US states via 4000 retail locations. It has 48 SKUs, including tinctures, proprietary FDA drug listed OTC topicals and doctor/practitioner lines.
We think that the market for CBD products is really just getting started in Europe, and the fact that HempFusion is already in Irish stores and should soon be in British stores is testament to the forward thinking management team led by Mitchell.