TAAT Global Alternatives, the maker of a non-nicotine cigarette which is targeted at the global market of existing smokers, seems to be making great strides with its sales strategy. The company announced last week that wholesale reorders now account for 48% of its sales volume during fiscal Q1 2022.
This is a big step forwards for TAAT, as it clearly demonstrates the company is getting traction with end customers, namely smokers aged 21+, both in the US and further afield.
Big increase in global store count
TAAT says that its global store count is now in the thousands, with more than 2000 confirmed retailers in the US alone, and with many more stores taking its cigarettes through cash-and-carry wholesale warehouses. We spoke with CEO Setti Coscarella about the news and about the company’s prospects in 2022.
“In the beginning, this was all about pushing our product, but now we are seeing both push and pull dynamics in action,” he said. “This is setting up recurring revenue streams for TAAT.”
This is not just a US phenomenon either: TAAT is also seeing distributors in the UK, a relatively new market for the company, asking for more supplies. Coscarella says most of the international wholesalers are still working through their initial orders, but in time he will have more detail on re-orders from these markets as well.
Reassuringly, he confirmed that the TAAT production facilities in Nevada remain equal to the task of meeting demand for the company’s proprietary alternative to tobacco.
Multiple touch points for distribution
Another important process has been the creation of multiple touch points, helping to generate brand awareness. Orders have started to come in from stores that are not part of the wholesale network, where owners have become aware of the success of the product in competitor stores, and have started to place their own orders for it.
TAAT anticipates the return to more physical trade shows in the course of 2022 will also be a major bonus for the company, creating the opportunity to meet more wholesale partners. These have proved very successful already in setting up the required relationships.
Investors should also note that much of TAAT’s existing expansion has occurred during the pandemic, and with massive disruption from the virus. Coscarella said that he anticipates the return to normality in key markets will provide a fillip to sales, both because it will mean an increase in footfall from bricks and mortar shoppers, but also because he anticipates more social mixing will cause more smoking.
Target market is existing smokers
The company has always targeted existing smokers who are looking for a solution that helps them to give up on nicotine. Coscarella is on the record as saying he believes nicotine to be “the most useless drug ever”. TAAT’s Beyond Tobacco replicates the smell and taste of tobacco, but without the addictive qualities of nicotine. It is designed as a solution that can assist smokers with kicking their nicotine habit.
“Given the amount of smokers aged 21+ who are actively looking for a better alternative to tobacco cigarettes, it is relatively easy to convert one-time initial purchases of just about any novel approach to delivering nicotine; whether that may be a vaping device, nicotine patches, or consumables such as gums and lozenges,” Coscarella explained. “While the companies who make these alternative solutions will often boast about their initial popularity, you won’t frequently hear them talking about whether or not that popularity was sustained.”
