GRANT, Fla., Oct. 5, 2021 /PRNewswire/ -- Kaival Brands
Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the
"Company," "we," "us" and "our"), the exclusive global distributor
of products manufactured by Bidi Vapor, LLC ("Bidi Vapor"), today
announced its plan to launch distribution of its products in the
United Kingdom.
Kaival Brands to Launch UK Market, represents attractive
opportunity for Bidi Vapor's initial international rollout
INTERNATIONAL EXPANSION
Following the U.S. Food and Drug Administration's ("FDA")
decision to deny marketing authorization for flavored electronic
nicotine delivery systems ("ENDS"), which Bidi Vapor is challenging
with respect to its BIDI® Stick, Kaival Brands and Bidi
Vapor are excited to announce they are augmenting their focus on
and attention to international markets where they have full market
and product approvals to distribute the entire BIDI® Stick product
line (including non-tobacco flavors).
While flavored ENDS face hurdles to get back on the U.S. market,
the products remain legal in much of the world. Throughout the past
twelve months, Bidi Vapor has received marketing and distribution
approval in 11 global markets, including the United Kingdom ("UK") and Russia. Given the favorable dynamics of the UK
market (outlined below), Bidi Vapor and Kaival Brands are now
focusing substantial time and strategic efforts on targeting the UK
market. The Company believes that it has the budget to commit to
marketing, staffing, and executing a successful strategy in the UK.
Simultaneous to building out our UK infrastructure, the Company is
actively discussing formalizing international distribution
agreements with some of its current U.S. customers who also have
global distribution capabilities.
THE UK VAPE MARKET: ATTRACTIVE FIT FOR BIDI VAPOR
We
believe the UK is an attractive market in which to launch our
products internationally, with subsequent plans to roll out across
the European Union, which represents a current ENDS market of
$2.5 billion, and is expected to
reach $3.9 billion by
2023.1
UK Market Snapshot:
- Mature market of adult consumers
- Average consumer age range of 35-45 years old, versus 18-24 in
the United States
- Adult consumers (cigarette smokers) are motivated to transition
to vape products2
Bidi Vapor created the BIDI® Stick to serve as a true, effective
alternative for adult smokers of traditional combustible
cigarettes, not as a product designed to attract first-time
nicotine users. We believe that the UK market presents a strong fit
as a market, as UK ENDS consumers are largely composed of current
and former smokers, with under 3.5% of the total adult ENDS
consumer population being represented by "never smokers."
CONTINUED U.S. DOMESTIC MARKET OPPORTUNITY
The FDA
received PMTAs covering over 6.5 million ENDS products from over
500 manufacturers prior to the September 9,
2020 court-ordered PMTA submission deadline. To date,
the FDA has not approved a single PMTA for an ENDS product, and has
rejected millions of applications for flavored ENDS. The FDA
has indicated applications are still pending for review for tobacco
and menthol ENDS; importantly, we believe PMTAs outstanding for
closed-system tobacco and menthol ENDS are representative of 10 or
fewer companies, making Bidi Vapor one of a select group. As
such, while Bidi Vapor is hopeful that the courts will grant relief
in its marketing denial challenge, either way we anticipate Bidi
Vapor will eventually receive authorization for its tobacco and
menthol BIDI® Sticks. While the FDA's recent actions with respect
to PMTAs have likely eliminated a significant number of suppliers
to the ENDS market, we believe that the actions will have minimal
impact on adult consumer demand for ENDS products. In fact,
we view the dynamics of the U.S. ENDS market to be more favorable
to Bidi Vapor after the PMTA decision process than before.
Prior to the recent PMTA update, there were hundreds of companies
competing in the marketplace. Now, a much smaller number of larger
companies with sufficient resources to develop the scientific
evidence needed to meet the FDA's high public health protection
standard have a chance to complete the rigorous PMTA process for
tobacco and menthol ENDS
BLUE SKIES AHEAD
We have a fortified balance sheet and
are laser-focused on resuming our revenue growth. Our near-term
focus will be on the growth opportunities that we see in the UK and
Europe, and having obtained
necessary marketing and distribution approvals outside of the U.S.
in the past year, we believe that we are now in a strong position
in regards to executing our international plan. In the U.S.,
with reduced competition, we intend to reclaim our dominant market
share in the U.S. for non-flavored vape products and anticipate
enjoying higher visibility of orders as well as higher order price
points.
"We have weathered two storms: COVID-19 and the FDA's universal
decision on flavored ENDs. These events had negative consequences
for our business, but we believe the storm is over. After the rain,
the sun comes out. We are well capitalized, and it is my belief we
have the best ENDS product on the market for adult consumers. Our
goals are to have a strong first year in the UK and to recapture
our leading market share in ENDS in the U.S.," notes Kaival Brand's
Founder & CEO, Niraj Patel.
About Kaival Brands Innovations Group, Inc.
Based in
Grant, Florida, Kaival Brands is a
company focused on growing and incubating innovative and profitable
products into mature and dominant brands in their respective
markets. Our vision is to develop internally, acquire, own, or
exclusively distribute these innovative products and grow each into
dominant market-share brands with superior quality and recognizable
innovation. Kaival Brands is the exclusive global distributor of
all products manufactured by Bidi Vapor.
1.Source: Statista.
2.Action on Smoking and Health (ASH): "Use of
e-cigarettes (vapes) among adults in Great Britain," June
2021
Forward Looking Statements
This press release includes
statements that constitute "forward-looking statements" within the
meaning of federal securities laws, which are statements other than
historical facts that frequently use words such as "anticipate,"
"believe," "continue," "could," "estimate," "expect," "forecast,"
"intend," "may," "plan," "position," "should," "strategy,"
"target," "will," and similar words. All forward-looking statements
speak only as of the date of this press release. Although we
believe that the plans, intentions, and expectations reflected in
or suggested by the forward-looking statements are reasonable,
there is no assurance that these plans, intentions, or expectations
will be achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied, or forecasted in
such statements. Our business may be influenced by many factors
that are difficult to predict, involve uncertainties that may
materially affect results, and are often beyond our control.
Factors that could cause or contribute to such differences include,
but are not limited to, our near-term plans for focusing on the
European markets; the timing and results of the FDA's PMTA process;
the scope of future FDA enforcement of regulations in the ENDS
industry; the FDA's approach to the regulation of synthetic
nicotine and its impact on our business; the duration and scope of
the COVID-19 pandemic and impact on the demand for the products we
distribute; the actions governments, businesses, and individuals
take in response to the pandemic, including mandatory business
closures and restrictions on onsite commercial interactions; the
impact of the pandemic and actions taken in response to the
pandemic on global and regional economies and economic activity;
the pace of recovery when the COVID-19 pandemic subsides; general
economic uncertainty in key global markets and a worsening of
global economic conditions or low levels of economic growth; the
effects of steps that we could take to reduce operating costs; our
inability to generate and sustain profitable sales growth;
circumstances or developments that may make us unable to implement
or realize anticipated benefits, or that may increase the costs, of
our current and planned business initiatives; changes in government
regulation or laws that affect our business; significant changes in
our relationships with our distributors or sub-distributors; and
those factors detailed by us in our public filings with the
Securities and Exchange Commission. All forward-looking statements
included in this press release are expressly qualified in their
entirety by such cautionary statements. Except as required under
the federal securities laws and the Securities and Exchange
Commission's rules and regulations, we do not have any intention or
obligation to update any forward-looking statements publicly,
whether as a result of new information, future events, or
otherwise.
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SOURCE Kaival Brands