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Fiji Kava forms strategic partnership with Chemist Warehouse Group

Chemist Warehouse will provide sales and marketing services over three years and in return, Fiji Kavaa will issue shares and will emerge with 10% of Fiji Kava's expanded issued capital.

Fiji Kava Ltd - Fiji Kava forms strategic partnership with Chemist Warehouse Group
Fiji Kava will become platinum supplier and receive greater marketing and promotional benefits

Fiji Kava Ltd (ASX:FIJ) has signed an equity-linked partnership with Chemist Warehouse Group that will also see the Australian-Fijian health & wellness company becoming a platinum supplier. 

The partnership will see Chemist Warehouse receive up to 12,995,454 shares in Fiji Kava at 11 cents per share in a strategic association that will expand Fiji Kava's presence in Chemist Warehouse stores in Australia and New Zealand. 

As a platinum supplier, Fiji Kava will also receive greater marketing and promotional support across Chemist Warehouse's global network, in return for a marketing and promotional fee, to be paid via the equity agreement.

“Strong and meaningful endorsement”

Fiji Kava CEO Dr Anthony Noble said: "This partnership is a strong and meaningful endorsement of Fiji Kava.

“To have Australia's leading pharmacy brand take a strategic equity stake in our business only two months after our unique noble kava varieties were launched in Chemist Warehouse stores and online is transformational for us.”

Deepens relationships and aligns commercial interests

Noble added: "At a time when the market for natural remedies for anti-anxiety is soaring in light of the global pandemic, not only will this partnership increase the availability of our products and awareness of our brand globally, it also deepens our relationship and aligns our commercial interests to the long-term success of Fiji Kava.

“There are natural synergies with this partnership as we both look to capitalise on the pharmacy network is the single largest domestic channel for Australian consumers purchasing complementary medicines.

"We look forward to working with Chemist Warehouse to maximise the distribution and marketing opportunities now available to Fiji Kava across their large global pharmacy network in Australia, New Zealand and Ireland, with the launch of our products on Chemist Warehouse's Tmall Global store we also see another key avenue for growth in sales in China.”

“Strong belief in Fiji Kava”

Chemist Warehouse chairman and co-founder, Jack Gance said: "This investment signals our strong belief in Fiji Kava as a company that has something truly unique to offer in the natural medicine market.

“Pharmacy is the clear leader for kava consumers, with this strategic alliance deepening our relationship with Fiji Kava while providing our global consumer network with access to their high-quality noble kava varieties.”

The first half of the investment

Under the agreement, Chemist Warehouse will make the first half of their investment by the end of 2021 and will take a hands-on role in driving marketing and sales of Fiji Kava products across all Chemist Warehouse markets.

The partnership also includes active participation in new product development, market research and intelligence.

The scope of partnership also includes Chemist Warehouse’s support for product communication, labelling, design, packaging promotion and improvement opportunities. 

The second half of the investment will be recognised following the achievement of target sales in FY23 and will see a further delivery of co-funded advertising, sales, and marketing activities.

Gance said: "By investing in a genuine market leader in the kava sector, we clearly believe this partnership will be mutually beneficial especially as their products become more widely available across our network.”

Becoming a platinum supplier

Overall, the new equity partnership with Chemist Warehouse will include the sale of Fiji Kava's full range of Noble Kava™.

This includes Noble Kava™ extract capsules and the three uniquely formulated varieties of Noble Sleep™, Noble Calm™ and Noble Body™, as well as the pipeline of new products Fiji Kava will be launching this financial year including Noble FocusTM and its range of Fiji Kava medicinal teas.

By becoming a platinum supplier, Fiji Kava will also benefit from its products being available on Chemist Warehouse's Alibaba Tmall Global store and this will further expand Fiji Kava's presence in China with Chemist Warehouse being one of the largest health retail stores on Alibaba.

Gance said: “Demand for kava in China also presents another opportunity, which we look forward to unlocking via our Alibaba Tmall Global store.”

"We only partner with organisations that share our values and have a clear strategy to deliver on their ambitions for growth.

“As we've witnessed over the past two months, Fiji Kava has both.

“We certainly believe in the global opportunity of kava and our investment ensures we work collaboratively to realise kava's international potential.”

Quick facts: Fiji Kava Ltd

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