Kava boom in Australia as consumers seek healthier alternative to alcohol – The Calmer Co
One core group of kava consumers are those looking for products to cope with anxiety and to support sleep, the Queensland-based company said in its FY2024 Q4 report.
E-commerce is a key sales channel, with daily sales exceeding AUD$18.5k (US$12k), which is equivalent to over 500 per cent growth in the past year.
“Segments driving this growth are health-focused consumers looking to replace alcohol with a healthier alternative, followed by consumers looking for a supplement to reduce anxiety and aid sleep,” said the report.
Kava is traditionally consumed by Pacific Islanders to support mind and body relaxation.
“Driven by digital advertising primarily in Meta platforms and through Google search, we have grown our database to over 30,000 customers and we have grown repeat customers sales via email remarketing campaigns in Q4,” the report added.
Its Q4 revenue was up 194 per cent versus the same time last year to AUD$1.8m (US$1.18m). Australia was the largest revenue contributor with 70 per cent sales coming from the market.
The Calmer Co sells its products derived from Noble Fijian Kava under its flagship brand FijiKava that consists of powder drinks, tea and supplements. Its other brand Taki Mai focuses on powder drinks and ready-to-drink kava shots, while the brand Danodan sells cannabidiol (CBD) tinctures.
The Calmer Co also sells its kava products in the US, China, New Zealand, and Fiji, and it hopes to replicate e-commerce success seen in Australia in the US.
“Our digital and retail strategy in the US market is both in their infancy, but we have seen some early sales traction through both our Shopify (including referrals via Walmart.com) and a full 12 months of strong performance on Amazon.com,” said the company.
For the entire FY24, The Calmer Co is expecting total sales of at least AUD$4m.
Offline expansion
Building on its strong e-commerce performance, the company is expanding its offline reach by stocking its products in more Coles outlets.
The company’s products are now ranged in 799 out of the 840 Coles stores across Australia.
Its bestseller is its FijiKava Instant Kava 150g powder drinks.
Two other SKUs are also available in Coles, namely FijiKava Instant Kava 50g and Taki Mai Kava Shot 50mL. Through the expansion, the former is sold in 799 Coles stores and the latter in 752 stores.
“Our retail footprint across Australia has extended significantly after Coles elected to expand our product listings and stock Fiji Kava and Taki Mai products in 799 Coles locations Australia-wide, demonstrating again that kava appears to be part of a broader based health trend,” said CEO Anthony Noble.
As part of the expanded ranging, the company will be running an advertising campaign in New South Wales from late August through September.
“The campaign will increase awareness of the products available in Coles, as well as highlight in-store location and the weekly specials across the range,” said Noble.
Oversubscribed capital raise
On the other hand, the company saw an oversubscribed capital raise of AUD$2.65m (US$1.73m) in Q4.
Funds raised will be used for expanding its manufacturing facility in Fiji and increasing inventory. With the factory upgrades, it is expanding to increase its processing capacity by more than double.
