$KAVL Kaival Brands to Launch UK Market https:/

$KAVL Kaival Brands to Launch UK Market

https://www.prnewswire.com/news-releases/kaiv...92778.html

GRANT, Fla., Oct. 5, 2021 /PRNewswire/ -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the "Company," "we," "us" and "our" , the exclusive global distributor of products manufactured by Bidi Vapor, LLC ("Bidi Vapor" , today announced its plan to launch distribution of its products in the United Kingdom.

INTERNATIONAL EXPANSION

Following the U.S. Food and Drug Administration's ("FDA" decision to deny marketing authorization for flavored electronic nicotine delivery systems ("ENDS" , which Bidi Vapor is challenging with respect to its BIDI® Stick, Kaival Brands and Bidi Vapor are excited to announce they are augmenting their focus on and attention to international markets where they have full market and product approvals to distribute the entire BIDI® Stick product line (including non-tobacco flavors).

While flavored ENDS face hurdles to get back on the U.S. market, the products remain legal in much of the world. Throughout the past twelve months, Bidi Vapor has received marketing and distribution approval in 11 global markets, including the United Kingdom ("UK" and Russia. Given the favorable dynamics of the UK market (outlined below), Bidi Vapor and Kaival Brands are now focusing substantial time and strategic efforts on targeting the UK market. The Company believes that it has the budget to commit to marketing, staffing, and executing a successful strategy in the UK. Simultaneous to building out our UK infrastructure, the Company is actively discussing formalizing international distribution agreements with some of its current U.S. customers who also have global distribution capabilities.

THE UK VAPE MARKET: ATTRACTIVE FIT FOR BIDI VAPOR
We believe the UK is an attractive market in which to launch our products internationally, with subsequent plans to roll out across the European Union, which represents a current ENDS market of $2.5 billion, and is expected to reach $3.9 billion by 2023.1

UK Market Snapshot:

Mature market of adult consumers
Average consumer age range of 35-45 years old, versus 18-24 in the United States
Adult consumers (cigarette smokers) are motivated to transition to vape products2
Bidi Vapor created the BIDI® Stick to serve as a true, effective alternative for adult smokers of traditional combustible cigarettes, not as a product designed to attract first-time nicotine users. We believe that the UK market presents a strong fit as a market, as UK ENDS consumers are largely composed of current and former smokers, with under 3.5% of the total adult ENDS consumer population being represented by "never smokers."

CONTINUED U.S. DOMESTIC MARKET OPPORTUNITY
The FDA received PMTAs covering over 6.5 million ENDS products from over 500 manufacturers prior to the September 9, 2020 court-ordered PMTA submission deadline. To date, the FDA has not approved a single PMTA for an ENDS product, and has rejected millions of applications for flavored ENDS. The FDA has indicated applications are still pending for review for tobacco and menthol ENDS; importantly, we believe PMTAs outstanding for closed-system tobacco and menthol ENDS are representative of 10 or fewer companies, making Bidi Vapor one of a select group. As such, while Bidi Vapor is hopeful that the courts will grant relief in its marketing denial challenge, either way we anticipate Bidi Vapor will eventually receive authorization for its tobacco and menthol BIDI® Sticks. While the FDA's recent actions with respect to PMTAs have likely eliminated a significant number of suppliers to the ENDS market, we believe that the actions will have minimal impact on adult consumer demand for ENDS products. In fact, we view the dynamics of the U.S. ENDS market to be more favorable to Bidi Vapor after the PMTA decision process than before. Prior to the recent PMTA update, there were hundreds of companies competing in the marketplace. Now, a much smaller number of larger companies with sufficient resources to develop the scientific evidence needed to meet the FDA's high public health protection standard have a chance to complete the rigorous PMTA process for tobacco and menthol ENDS

BLUE SKIES AHEAD
We have a fortified balance sheet and are laser-focused on resuming our revenue growth. Our near-term focus will be on the growth opportunities that we see in the UK and Europe, and having obtained necessary marketing and distribution approvals outside of the U.S. in the past year, we believe that we are now in a strong position in regards to executing our international plan. In the U.S., with reduced competition, we intend to reclaim our dominant market share in the U.S. for non-flavored vape products and anticipate enjoying higher visibility of orders as well as higher order price points.

"We have weathered two storms: COVID-19 and the FDA's universal decision on flavored ENDs. These events had negative consequences for our business, but we believe the storm is over. After the rain, the sun comes out. We are well capitalized, and it is my belief we have the best ENDS product on the market for adult consumers. Our goals are to have a strong first year in the UK and to recapture our leading market share in ENDS in the U.S.," notes Kaival Brand's Founder & CEO, Niraj Patel.