The Calmer Co International Ltd (ASX:CCO) has signed a 24-month Master Supply Agreement with a US-based functional beverage company to supply premium CO₂-extracted kava ingredients that is expected to deliver approximately $2 million in revenue per annum.
The agreement supports its B2B ingredients strategy and provides improved revenue visibility, with the contract structured around a quarterly supply framework aligned to the customer’s production planning.
“This agreement represents a significant milestone in the execution of our B2B ingredients strategy. Securing minimum contracted revenue provides strong revenue visibility and validates our investment in vertically integrated sourcing and advanced CO₂ extraction capability," founder and CEO, Zane Yoshida, said.
"The structure of the agreement allows both parties to scale volumes over time as demand for kava-based functional beverages continues to expand in the US market.”
Revenue outlook
Calmer Co has secured a minimum revenue commitment of AU$1,581,884 over the 24-month term.
Customer inventory requests indicate demand could “likely” translate to revenue of about AU$2 million per annum during the contract period, although this will depend on production scheduling, delivery timing and foreign exchange movements. Pricing is USD-denominated, with review mechanisms linked to raw material movements.
Key commercial terms
The agreement is non-exclusive, allowing Calmer Co to continue supplying other customers globally. While the customer is not required to purchase a minimum quantity each quarter, Calmer Co has agreed to maintain a minimum level of quarterly inventory at the customer’s request, with any shortfall against the overall commitment to be purchased by the end of the contract term.
The agreement includes standard supply provisions such as warranties, insurance requirements, deposits and payment terms, and the sale price may be adjusted based on the purity of kavalactone delivered. Either party may terminate on 30 days’ notice for an unremedied breach.