Thomas Warner speaks to Callum Sommerton, CEO of Chill Brands Group PLC (LSE:CHLL, OTCQB:CHBRF), on the company's agreement with a top-five UK supermarket to stock its nicotine-free vape products.
This deal marks a substantial expansion for Chill Brands, increasing its UK outlet presence to over 2,100 stores and setting the stage for a surge in revenues.
Sommerton delved into the transformative journey of Chill Brands in 2023, highlighting its strategic shift from legacy CBD products to nicotine-free offerings and the launch of its online marketplace, Chill.com.
Thomas Warner (TW): Callum, following the announcement of Chill Brands' deal with a top-five UK supermarket, could you shed some light on the impact this deal will have on your distribution and revenue?
Callum Sommerton (CS): Absolutely, Thomas. This deal is a major step forward for us, placing our Chill ZERO nicotine-free vapes into 1500 stores of a top-five UK supermarket. While I can't specify which supermarket at this stage, this expansion boosts our UK stockist count to over 2100 outlets. We're confident this will significantly drive our revenues, pushing us past the £2 million mark soon. It's a testament to our growing presence and the appeal of our products in the market.
TW: 2023 has been quite a transformative year for Chill Brands. Could you talk more about the shift in your product focus and your overall strategy?
CS: Indeed, 2023 has been transformative. We've shifted our focus from legacy CBD products to nicotine-free offerings like Chill ZERO, in both the US and UK markets. This strategic pivot is vital for our growth. Additionally, we launched Chill.com, an online marketplace hosting over 40 brands. Our partnership with Smoker Friendly in the US is also key, introducing Chill ZERO across various states. We're laying down strong foundations for financial growth and diversification.
TW: With your share price growth, what do you attribute this positive market response to?
CS: I believe our consistent effort and strategic pivot have been instrumental. We've been clear about our direction and have delivered on our promises. While there's no magic formula, our turnaround story and hard pivot have given the market hope and a clear growth opportunity to invest in. Our share price reflects this optimism and the potential for further value creation.
TW: As we look ahead, what are Chill Brands' main focuses and strategies for 2024?
CS: Our focus for 2024 is on continuing our expansion and product development. We'll be driving sales to the brands on Chill.com and introducing new ones. The growth of our Chill ZERO range, both in the US and UK, will remain a priority. We're also targeting marketing efforts and responsible product development that aligns with regulatory changes. Furthermore, we plan to expand into other European territories, leveraging our omni-channel approach that includes retail, online, and Amazon.co.uk.
TW: Finally, considering the evolving market for nicotine-free products, how confident are you about the demand for such products in the future?
CS: We're very confident about the demand for nicotine-free products. Industry leaders like Smoker Friendly in the US and major UK supermarkets are backing this category, indicating it's more than just a trend. We believe that with continuous innovation and agile response to market needs, we can capitalize on this growing segment effectively.