Vancouver-based Rritual Superfoods (CSE:RSF / FSE:0RW), a specialist maker of mushroom-based organic health supplements, has announced purchase orders worth CAD $306,000 in the last week of May. The news follows hot on the heels of another announcement earlier last week that it has already exceeded its ‘aggressive’ 2021 retail distribution goals, which are being revised upwards.
“We are extremely excited to have had such a strong launch in our first month of full-scale commercial operations,” said Rritual CEO David Kerbel. “We fully expect that these initial orders from our cornerstone retailers will establish Rritual products on shelf with regular re-orders to follow. As we establish our distribution foot-print, we will continue to execute our marketing strategies to support our retail partners.” Rritual, listed on Canadian Stock Exchange, commencing trading on 5 March.
Rite Aid deal key to distribution strategy
Rritual has a sales and a marketing strategy that has targeted major retailers across the USA to build and expand their distribution network. Rite Aid, a national chain of drugstores, is a key piece in the Rritual marketing strategy. The company delivers healthcare and other retail products to more than 1.6 million Americans every day. It sells whole being health products and services through 2,400 retail pharmacy locations in 17 states.
The popularity of Rritual products has exceeded expectations, prompting distribution partner Rite Aid to expand the number of stores taking the Rritual product range by 20%. A further 100% more Rite Aid locations will also carry Rritual’s variety pack product. This is on the back of initial retail activity, with distributors now asking to increase their initial orders.
Rritual said that its products are currently available in more than 2,400 retail locations and at 10,000 points of distribution. But with an aggressive expansion strategy has raised that target to 6,000 stores and 20,000 points of distribution by the end of 2021. If successful, this would achieve a monthly run rate in the US market of CAD $1,300,000, achieving blended margins of about 31%-42%.
Emerging European distribution strategy
Rritual is also in discussions with European retailers, as part of an international expansion, and is in meetings with Superdrug, Holland & Barret, Boots, Clicks, Stephenson’s, BIPA Parfumerien, Ocean Healthcare and Laboratories URGO, among others. Kerbel said: “We’re placing a strong emphasis on international expansion and have set aggressive growth targets for the rest of this year and beyond.”
Rritual specialises in adaptogens, which are plant-based, healing blends of medicinal mushrooms, super herbs, roots and fruit powders. They are regarded as the next big thing for health food buffs and high performance athletes. Rritual’s core products are Reishi Relax, Chaga Immune and Lion’s Mane Focus products, and all three draw on organic adaptogens from mushrooms. The market for adaptogens is expected to grow at a CAGR of 8.55% to $4m by 2025, according to data from Research & Markets.
We believe the company is well-positioned to dominate a segment where demand and sales are growing exponentially. Grandview Research says the global functional food market is projected to reach $276 billion by 2025, growing at 7.9% each year with consumers putting more emphasis on health and wellness. The market is anticipated to expand at a CAGR of 7.9% during the forecast period. Increasing demand for nutritional and fortifying food additives is one of the major growth drivers.