Inventory in Second Iteration of Beyond Tobacco™ Retail Market Testing Sells Out in Under 72 Hours
In July 2020, Taat undertook a test production run for Beyond Tobacco™ cigarettes with its manufacturing partner, which confirmed initial production estimations of one million sticks per day. An allocation of the batch of Beyond Tobacco™ cigarettes from this test production run was reserved for market research purposes, with the balance to be offered to select retail stores in Nevada that participated in the Company’s initial retail market testing in early May 2020. Less than 72 hours after the selected stores began selling Beyond Tobacco™ cigarettes, it was confirmed that their inventories had been sold out at price points aligned with the Company’s planned pricing strategy. Purchasers continued to provide positive feedback about Beyond Tobacco™ cigarettes, in addition to expressing enthusiasm about the planned Q4 2020 launch.
LAS VEGAS and VANCOUVER, British Columbia, Aug. 13, 2020 (GLOBE NEWSWIRE) — TAAT LIFESTYLE & WELLNESS LTD. (CSE: TAAT) (OTC: TOBAF) (FRANKFURT: 2TP2) (the “Company” or “Taat”) is pleased to announce that after providing inventory of Beyond Tobacco™ cigarettes from its most recent test production run to select points of sale in Nevada, the participating stores confirmed all of their inventory had completely sold out as of August 12, 2020, less than 72 hours after being made available to purchase. Retail stores in Nevada that participated in the May 2020 retail market testing of Beyond Tobacco™ cigarettes were offered the limited-time opportunity to order from the remaining supply from the Company’s July 2020 test production run. Because more than 75% of the retailers who carried Beyond Tobacco™ cigarettes in May 2020 reordered the product after their supply sold out during market testing, the Company anticipated that availing the product to such retailers again this month would allow them to capitalize on this proven demand. The Company would also stand to benefit from additional feedback about Beyond Tobacco™ cigarettes obtained in connection with sales of the product through these channels. Market reception far exceeded expectations with Beyond Tobacco™ cigarettes having rapidly sold out at the selected retail stores. Overall, purchasers provided stellar feedback about the product, with many expressing eagerness to purchase Beyond Tobacco™ cigarettes again after their official launch. In response to this anticipated demand, the management of the selected retail stores indicated they would increase their next orders of Beyond Tobacco™ by a minimum of 200%.With an objective of overcoming the tobacco epidemic, Taat has developed Beyond Tobacco™ tobacco-free and nicotine-free cigarettes to satisfy the one element that is overlooked by all other producers of tobacco alternatives; familiarity. Tobacco smokers who attempt transitioning to alternatives such as vaping often go back to cigarettes in merely a few weeks or months. Many industry players appear to believe that nicotine is the sole component of a cigarette that inclines them to continue smoking. While nicotine is a highly addictive drug, the relatively low efficacy of cigarette alternatives that contain nicotine (e.g., patches, gums, lozenges, vaping) suggests that consumers of such alternatives tend to abandon them in favour of returning to tobacco cigarettes for reasons besides nicotine. Beyond Tobacco™ cigarettes are distinguished by their similarity to traditional tobacco cigarettes in respect to their experience, taste, and smoking ritual while delivering a molecule that is far superior to nicotine, a drug that is generally inefficient and does not impart any benefits to the consumer. Taat’s mission is to eliminate the persisting global health issue of nicotine addiction by offering consumers a far better choice than tobacco. The Company intends to continue innovating and providing the market with unique alternatives to tobacco cigarettes by actively seeking to understand pain points for tobacco smokers who aspire to leave nicotine behind, to ultimately drive lasting positive change.Beyond Tobacco™ cigarettes are meticulously engineered to closely emulate the experience of smoking a traditional cigarette, which the Company has sought to achieve by using a combustible stick format that can be used in the same manner as a regular cigarette. Despite containing no tobacco, a proprietary blend of tobacco flavouring allows users of Beyond Tobacco™ cigarettes to enjoy the taste and aroma of tobacco to which they are accustomed. Additional elements of the Beyond Tobacco™ user experience include an enhanced volume of smoke exhaled and the use of cigarette-style packaging. It is expected that tobacco cigarette smokers could find Beyond Tobacco™ cigarettes appealing due to their content of cannabidiol (“CBD”, a non-psychoactive derivative of hemp), which has been shown to mitigate tobacco withdrawals and reduce dependency upon tobacco. Along with the “Original” product, Beyond Tobacco™ cigarettes will also be offered in a “Menthol” variety to appeal to smokers of menthol cigarettes. The Company anticipates that Beyond Tobacco™ cigarettes will launch in the United States in Q4 2020.Initial retail market testing of “test” versions of Beyond Tobacco™ cigarettes, which began in early May of 2020 and was detailed in the Company’s June 29, 2020 press release, consisted of more than 50 retail stores in Nevada and Southern California carrying the product and offering it for sale. Participating retailers were encouraged to solicit feedback from users regarding their opinion of Beyond Tobacco™ cigarettes, and how they compare to legacy tobacco products. Sentiments from these users generally reflected the opinion that Beyond Tobacco™ cigarettes would be an acceptable replacement for tobacco cigarettes given the comparable sensations with no significant experiential differences. In the testing period that occurred in early May of 2020, more than 75% of participating stores reordered Beyond Tobacco™ cigarettes after their initial inventory was sold out.A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/a1ea0d69-85bd-40f1-bf29-a94703189420In July 2020, the Company completed its first full-scale test production run of Beyond Tobacco™ cigarettes which confirmed initial production capacity estimations of one million sticks per day. An allocation of Beyond Tobacco™ cigarettes from this test production run was reserved for use in studies such as focus groups. The balance was to be utilized in further iterations of retail market testing, so that additional feedback could be collected. In the second iteration of retail market testing that occurred this month with selected retailers in Nevada, retailers were once again encouraged to prompt feedback from customers about their impression of Beyond Tobacco™ cigarettes.
Deliveries to the selected stores were finalized on August 9, 2020, at which point they were authorized to offer Beyond Tobacco™ cigarettes for sale. Three days later, it was confirmed that the inventory of Beyond Tobacco™ cigarettes at the participating stores had been completely sold out. During this period, Beyond Tobacco™ cigarettes were offered at a price point that is in line with the Company’s pricing strategies for the product upon its planned launch in Q4 2020. Feedback from users continued to indicate a great degree of satisfaction with Beyond Tobacco™ cigarettes, both as a favourable alternative to cigarettes that they would be inclined to use, as well as a good value for the price in comparison to tobacco cigarettes and other alternatives.Taat CEO Setti Coscarella commented, “One advantage we have is that Beyond Tobacco™ cigarettes are a completely intuitive product for anybody who smokes tobacco. There’s nothing to learn and nothing to adapt to – it’s something you use exactly the same way you would use a tobacco cigarette. The product essentially sells itself because of this, which I believe is precisely why the Nevada retailers who participated in the second iteration of retail market testing managed to sell out of Beyond Tobacco™ cigarettes in less than 72 hours despite being a new product with no advertising or promotion done to date. From this three-day period of selling the product, we picked up great feedback from users who continued to validate Beyond Tobacco™ cigarettes as a product with a smoking experience comparable to that of a tobacco cigarette. The retailers who carried Beyond Tobacco™ cigarettes in this timeframe are now even more enthusiastic about carrying the product, and we look forward to having them on board as part of our early-stage network of retailers.”On behalf of the Board of Directors of the Company,TAAT LIFESTYLE & WELLNESS LTD.“Setti Coscarella”Setti Coscarella, CEOFor further information, please contact:Jamie Frawley
[email protected]About Taat Lifestyle & Wellness Ltd.Taat Herb Co., the flagship brand of Taat Lifestyle & Wellness Ltd., is an early-stage life sciences company based in Las Vegas, Nevada innovating nicotine-free and tobacco-free alternatives to traditional cigarettes. With a unique proprietary blend of all-natural ingredients and meticulous engineering of the user experience, Taat Beyond Tobacco™ cigarettes are designed to emulate every aspect of legacy tobacco products with no significant difference to the user. Taat Beyond Tobacco™ cigarettes provide benefits that include mitigation of tobacco withdrawals, and reduction of tobacco dependency. With an expert-led go-to-market strategy, the Company’s objective is to position itself in the US $814 billion (2018)1 global tobacco industry to capitalize on the growing worldwide demand for better-for-you alternatives to traditional cigarettes.For more information, please visit http://taatusa.com.References1British American Tobacco – The Global MarketStatement Regarding Effects of CBD on Smoking CessationThe Beckley/Exeter research program (University of Exeter) carried out a pilot study that found after several weeks following cannabidiol (“CBD”) treatment, CBD helped tobacco smokers to reduce the amount of cigarettes smoked by as much as 40%. A follow-on study is planned, which will include a brain imaging component to examine the brain activity patterns underlying the probable therapeutic effects of CBD.Source: https://beckleyfoundation.org/cbd-for-smoking-cessation/
Link to Study: https://www.sciencedirect.com/science/article/abs/pii/S030646031300083XForward Looking StatementsThis 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 potential launch of Taat hemp cigarettes, in addition to the following: Potential reorders of Beyond Tobacco™ cigarettes by Nevada retailers who participated in the second iteration of retail market testing. 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 and CBD 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 FirmsDisclosures relating to investor relations firms retained by Taat Lifestyle & Wellness Ltd. can be found under the Company’s profile on http://sedar.com.