Industrial hemp seed grower ECS Botanics (ASX: ECS) will soon see its hemp oil products being sold in 850 Woolworths (ASX: WOW) stores across Australia after its distribution partner Just Foods secured a deal with Australia’s largest supermarket chain.
Woolworths currently operates a total of 995 stores across Australia and employs as many as 115,000 staff across its operations. By having its products sold in over 80% of Woolworths stores, ECS Botanics could potentially see boosted sales of its hemp oil and expand its Australian market share within a quickly growing sector.
Moreover, there is an even more important potential eventuality in the form of wider brand recognition and helping to educate consumers about the benefits (and safety) of cannabis-derived consumable products.
In a recent interview, ECS Botanics founder Alex Keach explained that hemp is the vehicle to bring about radical positive global change on an environmental, economic, social and health levels and declared that “this is why our mantra is healthy products, healthy people and a healthy planet”.
“The hemp industry was shut down in the 1930s due to the threat it posed to the cotton and pharmaceutical industry. Prior to this, it was used as a food, medicine and material for over 3,000 years. Now the time has come to relearn and rebuild an ancient industry,” explained Mr Keach.
Expanding Australian supply
The deal announced today could also be synergetic given Woolworth’s current market strategy.
According to the supermarket chain, it is in the process of refocusing on working more closely with Australian growers and farmers to deliver quality products to Australian consumers. With the domestic market becoming a greater priority, ECS Botanics wants to fill that particular gap given its Tasmanian operations, roots and heritage.
ECS Botanics’ product portfolio, specialised supply chain and specialised farmer network have positioned the company to be a significant player in the Australian hemp market with products being sold around Australia now on the horizon.
The terms of the deal state that ECS Botanics’ 250ml hemp oil product will be stocked at Woolworths stores as soon as 13 January 2020. However, ECS Botanics did not disclose expected revenue figures and said that its forecast is “uncertain at this time, with no minimum volumes guaranteed”.
Considering the strong demand for hemp-derived products in general given their naturality and appeal to health-conscious consumers, ECS Botanics explained that it will wait and see before announcing firm sales and revenue figures.
“This is a very large step in our commercial strategy and shows the strength of our new distribution partner JFA, who has delivered very early on in the relationship,” said Alex Keach, managing director of ECS Botanics.
“We expect to update the market regarding wider distribution of ECS Botanics products as retailer range reviews are completed and JFA meets with further retail groups,” he added.
Despite a lack of expected sales figures, this morning’s news helped ECS Botanics shares to jump by almost 22% up to $0.05.