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TAAT Global doubles down on Texas with GAMA distribution deal

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TAAT Global Alternatives Inc. (CSE:TAAT, FRANKFURT:2TP) continues to build out its presence in Texas with its cooperation agreement with the Greater Austin Merchants Cooperative Association (GAMA).

From November the company’s nicotine-free cigarettes will be carried by over 600 stores in central Texas serviced by GAMA, most of them located in Austin, Texas.

TAAT develops, manufactures, and distributes alternative tobacco products which are nicotine- and tobacco-free using a patent-pending base material formulation. With over CAD 80 million in overall gross revenue annually, TAAT’s facilities include an operations centre in Nevada, as well as a distribution centre and multiple convenience stores in Ohio.

Scaling up Texas sales, first Buc-ee, now GAMA

Having achieved strong sales growth earlier this year in the Los Angeles area, where in store sales rose by 200% month on month over the summer, the company has now turned its focus on Texas, a state of 29.5 million people where adult smokers make up just under 15% of the overall population. The Texas rollout of TAAT’s tobacco-free, nicotine-free cigarettes started in September with Buc-ee, a regional chain of 43 petrol stations and travel centres in the Southern US.

The scale of GAMA, which represents just over a third of all the convenience stores in Austin with a combined revenue of over $1billion, will allow TAAT to significantly expand its Texas presence. GAMA also owns and operates its own warehouse and distribution centre in the town of Austin and is in the process of adding a 300,000 square foot warehouse in Georgetown.

The role of B&B Beyond

TAAT formed its relationship with GAMA in September through B&B Beyond which is representing TAAT among a network of convenience industry contacts in the US.

B&B Beyond is currently leveraging its relationships to present TAAT to the management teams of national and regional convenience store chains, industry associations, and wholesale buying cooperatives. B&B Beyond is owned and operated by two experienced convenience store executives, Brent Taylor and Brad Call, whose combined experience should help to enhance TAAT’s ability to further disrupt the $812 billion global tobacco industry.

Wholesale buying cooperatives such as GAMA provide the platform to penetrate hundreds of independent retailers, in a manner that is similar to standard chain account sales, the company said. TAAT will work closely with GAMA on educating retailers, staff, and adult smokers about the company’s Beyond Tobacco products.

“Groups such as GAMA diligently identify opportunities for their members to improve store profitability, which will be a major selling point of TAAT as a product with significantly higher profit margins for retailers compared to what they earn selling tobacco cigarettes. Texas is an important market for the Company, and we look forward to working with GAMA as part of our expansion plans,” said TAAT’s chief executive Michael Saxon.

One eye on Europe

While the company’s main focus is currently firmly on sales in the US the company’s chief executive travelled to the UK earlier this autumn to explore potential partnerships which would introduce TAAT products into the UK market.

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

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