Medicinal wellness company Fiji Kava (ASX: FIJ) has unveiled a major new agreement with Blackmores’ (ASX: BKL) subsidiary BioCeuticals to develop a co-branded product for the Australian and New Zealand markets.
Minutes after cutting the red ribbon on the “milestone” deal and making it public, Fiji Kava’s shares were temporarily paused on the ASX “pending a further announcement”.
The agreement represents Fiji Kava’s first major collaboration to supply its noble kava extract which is expected to increase both profitability and endorse the company’s product range.
In parallel, as one of Australia’s leading natural health companies, Blackmores develops products focusing on a natural approach to health and leveraging vitamins, minerals, herbs and nutrients as opposed to artificial synthetics.
Blackmores has classified as a pharmaceutical company which has allowed it to remain operational at its facility in Victoria despite severe stage four lockdown restrictions being enacted across the state.
Fiji Kava manufacturers what it calls “natural noble kava” products for the complementary and alternative medicine market, as a natural alternative to prescription medicines to promote sleep, soothe and calm the nerves, support muscle relaxation and relax the mind. The industry is on course to swell to over US$210 billion by 2026.
According to the company, the agreement will see BioCeuticals licencing the use of Fiji Kava’s noble kava extract for its clinical AnxioCalm product – a unique blend of herbs to support symptomatic relief of mild anxiety, tension and stress, formulated to calm and support the nervous system and to minimise stress.
As the first foreign company with approval from the Fijian Government to operate in the kava industry, Fiji Kava has established a traceable supply chain of noble kava via its kava tissue culture laboratory and a 111-acre nucleus farm in Levuka, on the Fijian island of Ovalau.
According to the deal terms, AnxioCalm products will be co-branded with Fiji Kava’s “authentic Fiji Kava” trademark on each product sold and will be available through BioCeuticals’ existing network of qualified healthcare practitioners across Australia and New Zealand.
“This is another milestone for the company that will not only increase the availability of our noble kava in Australia and New Zealand but is another strong endorsement by a leading healthcare provider of the quality and uniqueness of our Fijian noble kava,” said Fiji Kava founder and chief executive officer Zane Yoshida.
“We are proud to support BioCeuticals with our water extracted Noble Fiji Kava, as allowed by the TGA in Australia. We are able to deliver this to BioCeuticals and our other partners through our vertically integrated supply chain, guaranteeing a sustainable and 100% traceable supply of unadulterated Noble Fiji Kava,” he said.
After announcing the deal, Fiji Kava said it intends to continue scaling-up its production in Fiji to produce required inventory, as well as, to meet growing demand from the BioCeuticals licence agreement and other developments such as ranging in Coles Supermarkets nationally.
Gearing up for kava
Fiji Kava is currently attempting to build a vertical supply chain and deep distribution channels into large Australian stores including Coles and other retailers.
According to Fiji Kava, the agreement continues a period of “strong and sustained progress” being made by the company on its commercial strategy to grow the availability of its Fijian noble kava.
The company claims it has secured cornerstone retail agreements in targeted markets, such as Coles supermarkets in Australia and Green Cross Pharmacy in New Zealand, while also expanding its e-commerce presence on Amazon in the US and “exploring opportunities” to tap into Chinese marketplaces.