Wholesale Reorders Account for 48% of TAAT™ Sales Volume in the U.S. for Fiscal Q1 2022

Rhea-AI Summary

TAAT Global Alternatives Inc. (CSE: TAAT, OTCQX: TOBAF) reported that about 48% of its U.S. sales volume in Q1 2022 came from wholesale reorders. The company has reached over 2,000 retailers in the U.S. and has begun placements in the U.K. Its marketing strategies include new billboard campaigns and distribution of smaller sample packs to enhance consumer trials. CEO Setti Coscarella expressed optimism for 2022, citing sustained interest from smokers and planned expansions in its market presence.

Positive

• 48% of U.S. sales volume from wholesale reorders indicates strong existing account performance.
• Expansion to over 2,000 retailers in the U.S. and initial U.K. placements.
• Innovative marketing strategies like billboards and sample packs could enhance consumer engagement.

Negative

• None.

LAS VEGAS and VANCOUVER, British Columbia, Jan. 18, 2022 (GLOBE NEWSWIRE) -- TAAT™ GLOBAL ALTERNATIVES INC. (CSE: TAAT) (OTCQX: TOBAF) (FRANKFURT: 2TP) (the “Company” or “TAAT™”) is pleased to announce that during its fiscal first quarter of 2022 (November 1, 2021 through January 31, 2022) approximately 48% of its overall sales volume in the United States is derived from wholesale reorders made by existing accounts. The global store count of TAAT™ retailers is now in the thousands, between more than 2,000 confirmed retailers in the United States and additional independent store placements made through “cash-and-carry” wholesale warehouses (detailed in the Company’s January 11, 2022 press release), as well as initial store placements of TAAT™ in the United Kingdom starting in Croydon (London’s southernmost borough). Through its nationwide network of distribution partners in the United States, TAAT™ continuously evaluates its performance in specific markets and has leveraged such insights to drive recurring orders from existing accounts while continuing to add new store locations. As the Company seeks to further expand its market share in the tobacco industry during TAAT™’s second year of being sold at retail, it is instituting distinct strategies for both acquiring new points of sale as well as maintaining productive relationships with existing retailers in the interest of generating long-term value.

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Throughout 2021, TAAT™ carried out several campaigns to attract the interest of smokers aged 21+ in the United States with the objective of prompting them to try TAAT™ as a nicotine-free and tobacco-free alternative to tobacco cigarettes. In addition to targeted online advertisements directing smokers aged 21+ to the Company’s TryTAAT landing page (http://trytaat.com) where requests for a sample pack can be made, in 2021 TAAT™ also ran its first “Out-of-Home” video advertisements on 10,442 gas pump displays in Ohio, and sponsored the entourage of heavyweight champion boxer Floyd Mayweather during his June 6, 2021 fight against Logan Paul resulting in millions of impressions of the TAAT™ brand globally. The Company intends to build upon the brand awareness momentum it gained in 2020 and 2021 by introducing new marketing tactics such as the following:

• Billboard Advertisements: In a December 14, 2021 press release the Company announced a seven-state billboard campaign for TAAT™; a form of advertising that U.S. tobacco companies have been prohibited from engaging in since 1998¹. TAAT™ billboards will be located in major cities to include Houston, Las Vegas, Detroit, and Atlanta.
  
  
• Presence at Trade Shows: In July 2021 TAAT™ began exhibiting at its first trade shows in the United States, which promptly yielded 68 new initial purchase orders as of the first week of August 2021. TAAT™ participated in the invitation-only SSE (Smoke Shop Events) conference in Tampa, Florida in January 2022, securing purchase orders from more than 90% of buyers who met with TAAT™, including a pallet order from a large wholesaler. At this time, TAAT™ has also arranged to be an exhibitor at and sponsor of the CHAMPS Las Vegas trade show (February 2-5, 2022) as well as the Tobacco Plus Expo (January 26-28, 2022) where TAAT™ will also have extensive logo placements during an official after-hours social event at the SAHARA casino resort in Las Vegas.
  
  
• “TAAT™ Twos” Samples for Retailers: Anecdotal feedback from TAAT™ retailers throughout 2020 and 2021 suggested that smokers aged 21+ were sometimes hesitant to purchase an entire 20-stick pack to sample TAAT™ for the first time, therefore suggesting that a small-format sample could bolster trials and conversions. To enhance existing in-store activation tactics, the Company plans to begin distributing two-stick packs of TAAT™ Original, Smooth, and Menthol as part of its wholesale offerings, called “TAAT™ Twos”. Retailers of TAAT™ would then have the option to offer TAAT™ Twos to smokers aged 21+ who are interested in trying TAAT™ without the requirement to purchase a full pack.
  

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Furthermore, the Company announced in a press release dated September 3, 2021 that the advanced formulation of Beyond Tobacco™ using reconstituted material was finalized, yielding overwhelmingly positive feedback from tobacco wholesalers in the United States as well as the United Kingdom, Ireland, Germany, Poland, France, and Switzerland. Characteristics of the advanced formulation include a more “realistic” similarity to actual tobacco in taste and smell, as well as adjustments to its burning tendencies to align the “puff count” with that of a standard tobacco cigarette of the same length while also ensuring TAAT™ sticks do not extinguish prematurely after being ignited. These improvements to the experience of smoking TAAT™ for smokers aged 21+ made possible by the Beyond Tobacco™ advanced formulation appear to have been beneficial to conversion rates, which could also be a contributing factor to the Company’s wholesale reorder rates, now at an all-time high.

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TAAT™ Chief Executive Officer Setti Coscarella commented, “Given the amount of smokers aged 21+ who are actively looking for a better alternative to tobacco cigarettes, it is relatively easy to convert one-time initial purchases of just about any novel approach to delivering nicotine; whether that may be a vaping device, nicotine patches, or consumables such as gums and lozenges. While the companies who make these alternative solutions will often boast about their initial popularity, you won’t frequently hear them talking about whether or not that popularity was sustained. This is for the simple reason that these alternatives do not offer the sensory-motor experience of pulling, lighting up, smoking, flicking, extinguishing, and safely discarding a combustible stick. As such, smokers aged 21+ will often abandon these alternatives shortly after trying them in favour of returning to that experience, save for ‘Heat-not-Burn’ products which tend to have far higher retention rates compared to other alternatives to cigarettes. Because TAAT™ can offer a set of motions and sensations that are substantially similar to those enjoyed by smoking a tobacco cigarette, it is clear that many smokers aged 21+ who try switching to TAAT™ are sticking with it. This has been reflected by our rate of repeat wholesale orders, which currently makes up nearly half of our overall sales volume in the United States in the current fiscal quarter. With a steady stream of initial wholesale orders from new distributors, as well as direct-to-consumer orders from smokers aged 21+ in the United States, I am thrilled that we have matured to the point that we are building the width of our footprint by adding stores both domestically and internationally, while also deepening that footprint with sustained popularity of TAAT™ among current smokers. We believe this foreshadows an exciting year to be had in 2022 as we ramp up our commercialization efforts at a global level.”

Sources

1 - https://truthinitiative.org/research-resources/tobacco-industry-marketing/what-do-tobacco-advertising-restrictions-look-today

On behalf of the Board of Directors of the Company,

TAAT™ GLOBAL ALTERNATIVES INC.

“Setti Coscarella”

Setti Coscarella, CEO and Director

For further information, please contact:

TAAT™ Investor Relations
1-833-TAAT-USA (1-833-822-8872)
investor@taatglobal.com

THE CANADIAN SECURITIES EXCHANGE (“CSE”) HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE, NOR HAS OR DOES THE CSE’S REGULATION SERVICES PROVIDER.

About TAAT™ Global Alternatives Inc.

The Company has developed TAAT™, which is a tobacco-free and nicotine-free alternative to traditional cigarettes offered in "Original", "Smooth", and "Menthol" varieties. TAAT™'s base material is Beyond Tobacco™, a proprietary blend which undergoes a patent-pending refinement technique causing its scent and taste to resemble tobacco. Under executive leadership with "Big Tobacco" pedigree, TAAT™ was launched first in the United States in Q4 2020 as the Company seeks to position itself in the $814 billion¹ global tobacco industry.

For more information, please visit http://taatglobal.com.

References

¹ British American Tobacco - The Global Market

Forward-Looking Statements

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking information and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur, or be achieved. Forward-looking information in this news release includes statements regarding the anticipated performance of TAAT™ in the tobacco industry, in addition to the following: The Company’s ability to sustain its current reorder rate, potential future placements of TAAT™ and TAAT™ Twos in retail stores, successful execution of marketing tactics beginning in 2022. The forward-looking information reflects management’s current expectations based on information currently available and are subject to a number of risks and uncertainties that may cause outcomes to differ materially from those discussed in the forward-looking information. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed timeframes or at all. Factors that could cause actual results or events to differ materially from current expectations include: (i) adverse market conditions; (ii) changes to the growth and size of the tobacco markets; and (iii) other factors beyond the control of the Company. The Company operates in a rapidly evolving environment. New risk factors emerge from time to time, and it is impossible for the Company’s management to predict all risk factors, nor can the Company assess the impact of all factors on Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking information. The forward-looking information included in this news release are made as of the date of this news release and the Company expressly disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable law.

The statements in this news release have not been evaluated by Health Canada or the U.S. Food and Drug Administration. As each individual is different, the benefits, if any, of taking the Company’s products will vary from person to person. No claims or guarantees can be made as to the effects of the Company’s products on an individual’s health and well-being. The Company’s products are not intended to diagnose, treat, cure, or prevent any disease.

This news release may contain trademarked names of third-party entities (or their respective offerings with trademarked names) typically in reference to (i) relationships had by the Company with such third-party entities as referred to in this release and/or (ii) client/vendor/service provider parties whose relationship with the Company is/are referred to in this release. All rights to such trademarks are reserved by their respective owners or licensees.

Statement Regarding Third-Party Investor Relations Firms

Disclosures relating to investor relations firms retained by TAAT™ Global Alternatives Inc. can be found under the Company's profile on http://sedar.com.

FAQ

What percentage of TAAT's sales volume in Q1 2022 came from wholesale reorders?

Approximately 48% of TAAT's overall sales volume in the U.S. during Q1 2022 was from wholesale reorders.

How many retailers are selling TAAT products in the U.S.?

TAAT products are currently available at over 2,000 retailers across the United States.

What new marketing strategies is TAAT implementing in 2022?

TAAT plans to use billboard advertisements and distribute smaller sample packs to boost consumer trials in 2022.

What are TAAT's plans for market expansion?

TAAT intends to expand its market share in the tobacco industry by increasing both store placements and maintaining relationships with existing retailers.