This week The Armchair Trader had the opportunity for our first discussion with Setti Coscarella, CEO of TAAT Lifestyle & Wellness [CSE:TAAT/FRA:2TP2], who joined us on our podcast. This is a good opportunity to hear more from TAAT about its Beyond Tobacco product, designed to replicate the experience of smoking for smokers, without the associated addictive qualities of nicotine.
TAAT has taken a leaf out of Beyond Meat’s playbook by developing an alternative to tobacco that could be used by smokers to help them to give up. Coscarella tells us on the podcast about how he noticed that for many smokers, the habits and rituals of daily smoking are an important part of the entire habit. He realised that by removing the nicotine from the cigarettes, what he terms “a useless drug” on the podcast, TAAT could create an alternative cigarette that might actually prove to be more useful to smokers than nicotine patches or vaping.
Targeting a market of 1.5 billion tobacco users
TAAT is effectively targeting a 1.5bn market of smokers globally, many of whom would like to give up smoking. Coscarella is at pains to point out that he is not interested in creating new smokers.
TAAT is starting with the US market, where its Beyond Tobacco product is shortly going to go on sale in Ohio. The management team at TAAT, including Coscarella himself, as distinguished by their considerable experience working for Big Tobacco companies. This grants them significant knowledge of the manufacturing and distribution obstacles they face.
The team has established a manufacturing facility in Nevada, which they have recently upgraded as they have reported considerable anticipated demand from potential customers in Ohio. Distribution in Ohio will be through the outlets typically used to sell nicotine cigarettes, like convenience stores and gas stations. Because the TAAT product does not contain tobacco or nicotine, it can also compete against traditional cigarettes at a much lower price point.
Launch of Beyond Tobacco in Ohio is imminent
Launch of Beyond Tobacco in Ohio is imminent. TAAT has said it is confident it is going to be able to distribute in the US in the next few weeks. It will be using ADCO Distributors Inc, a large local tobacco wholesaler which has access to 5000 tobacco points of sale through direct and indirect relationships. ADCO already works with the likes of Altria Group, ITG Brands and RJ Reynolds Tobacco Company, the latter being a subsidiary of British American Tobacco.
“As I anticipated, reactions from retailers for this product have been overwhelmingly positive,” said Pat Bell, Chief Operating Officer at ADCO. “In addition to providing distribution of TAAT to tobacco retailers in Ohio, we have already established redistribution agreements with several other wholesalers who also predict TAAT can sell successfully in this market.”
TAAT is rolling out its Beyond Tobacco cigarettes in three flavours, Original, Smooth and Menthol. It has started in-store initiatives which include placing promotional material in conspicuous areas of a given point of sale.
“With expert tobacco category sales leadership on the ground in Ohio, I am very pleased with the progress we have made in laying the groundwork to establish a sales pipeline in our launch market,” Coscarella said. “I look forward to getting into motion in Ohio as we work towards a successful launch, which I hope we can replicate in new markets, both in the United States and globally.”
The company has said it is currently producing over 600lbs of Beyond Tobacco per day, which is enough to make a pallet of 1440 10-pack cartons.