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TAAT Global Alternatives (CSE:TAAT / OTC:TOBAF) has announced numbers for its first full quarter since it started selling its proprietary Beyond Tobacco at retail. This constitutes a great barometer for the company’s progress as it seeks to provider smokers with an alternative to the addictive qualities of nicotine.

Revenue at TAAT rose more than 300% sequentially over the previous quarter, reflecting a faster-than-anticipated rollout and strong uptake at both the distributor and end-customer levels.

A successful alternative to nicotine tobacco

TAAT is currently blazing a trail with a proprietary alternative to tobacco which has no addictive qualities yet tastes and smells like tobacco. Unlike other challenger brands to Big Tobacco, TAAT is only targeting existing smokers, especially those seeking a solution that can help them give up. This still represents a global market of staggering size.

During the period to 30 April TAAT launched its e-commerce strategy to complement retail sales. It also upgraded its common shares to the OTCQX Best Market. TAAT cigarettes are now sold in more than 300 Ohio retailers, it has new store placements in both Illinois as well as Georgia, and an international distribution relationship in the United Kingdom and Ireland.

Ohio has been the centrepiece of TAAT’s distribution strategy to date, but the company is obviously making steps in other states. Ohio has furnished it with valuable store level market intelligence which has aided in its successful positioning of its three Beyond Tobacco flavours. The company’s leadership has lengthy Big Tobacco experience with a solid grasp of how to get a new product like this out into the market.

“I am pleased to say that the rollout of TAAT is ahead of schedule, as reflected in our second quarter financial and operating performance,” said Setti Coscarella, TAAT CEO. “We generated outstanding quarter-over-quarter revenue growth, and we expect that the trend will remain highly positive in the quarters to come as customer awareness and demand steadily increase.”

Promotional efforts are building awareness

TAAT said that promotional efforts in the quarter enhanced awareness of TAAT among smokers aged 21+, positioning it to continue gaining market share. Feedback on TAAT brands has been highly favourable, which confirms the positive responses received in an extensive market research study conducted in Q2.

The company said it is rapidly growing its store rollout in Ohio, expanding to other states, and responding aggressively to unsolicited strong demand and positive market dynamics in Europe.  A listing o the Nasdaq Capital Market is also pending.

Listen: Podcast with Joe Deighan, Founder and Director of Research, TAAT Lifestyle and Wellness

Watch for further success in Georgia

The period under review does not include the results of an expected roll out of Beyond Tobacco in Georgia, which we reported on earlier this week. We would anticipate further sales from this an online will make a significant impact on revenues over the next few months.

Based on our own discussion with the TAAT leadership, we know that some Big Tobacco companies are looking for alternatives to their own nicotine-based product strategies. This is climbing up their list of priorities and solutions like TAAT are only going to look more attractive as it continues to compete successfully on the ground in the US.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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