Kona Gold Beverage Inc - CEO
Letter
April 16, 2021
-- InvestorsHub NewsWire -- To Our Shareholders:
I am very pleased to be able
to communicate with our shareholders directly and to give you an
update on the exciting progress and
Company guidance
for 2021.
Kona Gold Beverage, Inc., a holding company, has positioned itself as
a leader in the functional beverage
and
better-for-you sectors with the development
and
marketing of products such as its popular Kona Gold
Hemp
Energy Drinks, HighDrate -
the
markets first CBD energy
water,
Storm CBD High Alkaline Water, and Ooh La Lemin
Lemonade. We continue our
efforts
to become
a national
branded Company with our portfolio of
beverage products by growing the company
through new distribution partners,
creating market awareness
through strategic
sponsorships and partnerships, and by developing
phenomenal
products
that taste
amazing and resonate with our consumers.
A Look Back at
2020
2020 was a challenging
year due
to the unforeseen Covid-19 pandemic, not only for Kona Gold
Beverage, but for all companies. The COVID-19
disrupted businesses and
affected
production and sales across a range of industries, as well as
causing volatility in the financial markets. The extent
of the impact of the COVID-19 pandemic on the Company's consumer
demand, sales, and financial performance presented a new set of
challenges. During 2020,
the
Company saw a big shake up in the
beverage industry, including
consolidation
of
beverage
companies, distributors delaying or
not
launching new
products, and many beverage brands and small distributors
were
forced to
close their doors. Kona Gold Beverage and its subsidaries,
were blessed in that we have continued
to ride out the
storm. During 2020, the Company
took a step back,
realigned our objectives and strategies, and put the Company in a
very successful position for 2021 and beyond.
While many beverage
companies were looking for ways to either
downsize or just stay afloat in 2020 during
the COVID-19 pandemic, Kona Gold Beverage took the opportunity to
focus on expanding its beverage
portfolio, uplisting to the higher OTCQB
market
tier, and becoming a fully
reporting entity by filing its Form S-1 Registration
Statement
with the
SEC.
In April of 2020, Kona Gold
Beverage, which was previously Kona Gold
Solutions, met all requirements and
uplisted
to the
higher market
tier, the
OTCQB Venture Market. Less than three months later, in July,
the Company filed its Form S-1
Registration Statement with the SEC, raising $1
million in
capital via an accredited investment
firm. The capital raised through the S-1 was utilized to fund
the S-1 Registration process, product production,
and provide cash flow during the COVID-19
pandemic. The S-1 Registration
Statement became effective on December
31, 2020, and the Company became fully
reporting with the SEC as of this
date.
With COVID-19 impacting
sales, and continuing to create
roadblocks and
hurdles for the Company to
distribute CBD beverage
products
in the
market, and in some cases Hemp
beverage products, the Company sought out to acquire a better-for-you brand
to
distribute in
mainstream
markets. On January 25, the Company
announced the acquisition of Lemin Lemonade, which
was already
distributed through Kona Gold Beverage's
subsidiary, Gold Leaf Distribution. The acquisition of Lemin
Lemonade gave the Company
a mainstream
brand in its portfolio, which is opening doors and creating
new opportunities for its existing brands, while adding a new
revenue
stream for
the Company.
Kona Gold Beverage closed out
2020 with just over $900,000 in revenue. Although revenue was
far off of Company's projections, which were
set before
the unforeseen COVID-19 pandemic, Kona Gold Beverage as a
whole, accomplished several key milestones during 2020
at a time when
other
brands were struggling to stay afloat. These accomplishments have set
the foundation for the Company to build upon, and we anticipate a
very successful
2021 and beyond.
2021 Guidance
Kona Gold Beverage has
set revenue
projections of $2.5-$3 million for
2021. While we anticipate
the
COVID-19 pandemic will still have an impact on
sales, and
we are unable to predict the extent of that impact,
the
Company strongly believes the
Covid-19
impact
will be
dwindling down as
we move further into 2021. Driving
revenue projections will be revenue
from the Company's newly acquired and rebranded Ooh La Lemin
Lemonade, and from the growth of the Company's
subsidiary, Gold Leaf Distribution. Revenue projections for Gold Leaf
Distribution alone are anticipated to be
$1-$1.2
million.
Kona Gold Beverage raised an
additional $1.5 million in capital in early 2021. Portions of
the proceeds from this current round of funding
were
used to acquire
S&S Beverage (Lemin Lemonade). The remaining proceeds will be
used for product production, expanding the Company's
national sales team, growing our distribution footprint,
expanding our market share, and on going
business operations. The Company will be hiring regional
sales reps that will be tasked to grow sales within our
distribution partners' territories by working
on-site with each distribution
partner's sales
team. Additionally,
Kona Gold has
partnered with several beverage brokers who have relationships with
national and regaional chains. These brokers provide the
Company with additional sales power by utilizing their established
relationships with buyers in key markets and chains.
Kona Gold's sales team
continues to focus on growth of its Kona Gold Hemp Energy Drinks,
the leading hemp energy drink on the market. The recent
acquisition of Lemon Lemonade has created new distribution
opportunities for Kona Gold Hemp Energy Drinks, and we anticipate many of
those opportunities will to come to frution in mid
2021. The Company's HighDrate CBD Energy Waters continue
to have
very strong sales in the markets it is in, and has the potential to see
exponential growth once the FDA provides guidence on CBD food and
beverage products.
Kona Gold
Beverage's newly acquired Ooh La Lemin Lemonade has surpased sales
expectations in new and existing markets with its new branding,
which was launched in chains in late February. The rebranding
to Ooh La Lemin has seen up
to an 800%
sales increase from the previous year in existing key accounts such
as Plaid Pantry. Ooh La Lemin has been launched in new
exciting chains
around the country, and we anticipate exceptional
growth with this brand as consumers find it in coolers and on
shelves at popular retail locations.
Gold
Leaf Distribution,
our distribution subsidiary, has grown to over 600
retail accounts and has
experienced strong month-over-month
revenue growth over the last year. Gold Leaf is nearing
profitability as it continues to distribute its solid portfolio of products
in Florida and
South Carolina. With March
2021
revenues of over
$80k, we anticipate Gold Leaf to be producing monthly sales of over
$100k in the coming months.
In closing,
I want to thank
each and every one of our shareholders for your continued support
of Kona Gold Beverage, Inc. The Company
experienced phenomenal growth in 2019, and a pull back
in
2020
due to COVID-19
Pandemic, but has positioned itself for
exciting growth in 2021 and beyond. I encourage you to
contact us at investorrelations@konagoldbeverage.com
regarding any
questions you may have about the Company. As always, stay safe, stay
healthy!
Sincerely Yours,
/s/ Robert
Clark
Robert Clark
Chief Executive Officer