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TAAT Global Alternatives moves into the heat not burn sector in the US

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TAAT Global Alternatives (CSE:TAAT/OTCQX:TOBAF), the maker of non-nicotine, non-addictive smoking products, has received the first batch of samples for its heat-not-burn (HNB) offering, which it plans to launch in the US market by the end of this year. TAAT completed its development of an HNB device in February, which will use heatable TAAT sticks.

TAAT said it had now made minor adjustments to the base material to allow it to be used optimally in this product category.  The new offering will consist of a heat-not-burn device which is reusable and reverse-compatible with the heated tobacco sticks sold by its competitors. The plan is to offer TAAT’s proprietary menthol and original flavours in the first instance.

Heat not burn launch scheduled for 2H

TAAT said the hardware and heatable sticks will be marketed and sold under the TAAT brand name in the US starting in either Q3 or Q4. By providing an additional nicotine-free and tobacco-free alternative to popular tobacco products, TAAT said that it believes it can further expand its existing market share within the global tobacco industry.

“Tobacco companies have invested heavily into the development of heat-not-burn solutions for the simple reason that many adult smokers worldwide are on the lookout for something different,” said TAAT CEO Setti Coscarella. “Although combustible products such as cigarettes remain dominant, heat-not-burn seems to have a relatively high user retention rate compared to other alternatives on the market.”

TAAT is a manufacturer of non-tobacco cigarettes designed for existing smokers who are seeking a new way to wean themselves off nicotine. It’s products are designed specifically to mimic the taste and smell of tobacco cigarettes, but have no addictive qualities.

Expanding global distribution footprint

The company continues to expand its global distribution footprint. Last week it expanded its product range offering with the Par Mar Stores network in Ohio, Pennsylvania and West Virginia, all three key tobacco markets in the US. It is now selling TAAT  Twos, two sticks on TAAT cigarettes in a single packet designed for smokers who want to sample the product before buying a full pack.

TAAT is also launching an incentive program for chain retailers to enhance in-store conversion rates for distribution of TAAT Twos as samples leading to first time purchases of TAAT packs by adult smokers. Retailers will be able to earn incentive payments by distributing free TAAT Twos samples to adult smokers who are buying tobacco cigarettes.

“Adult tobacco smokers tend to be very loyal to their preferred brand of cigarettes, and this can be a major obstacle when it comes to persuading them to try switching to alternatives such as TAAT,” said Joe Deighan, founder of TAAT. “In most other CPG categories such as soft drinks, candy, snacks, beer, and liquor, it is standard for there to be ‘single-serving’ offerings available for purchase….that do not require the consumer to purchase a ‘pack’ or ‘case’ of several single servings at once, even just to try it for the first time.”

TAAT also confirmed it has now fulfilled purchase orders for an initial supply of its product to 23 franchised convenience stores in California, part of a global convenience store chain with over 70,000 stores globally, and 9,300 in the US. TAAT said that these new relationships are the dividends now paying off from its ability to attend tobacco trade shows in the US and Europe and meet distributors in person.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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