Early projections were announced in early January that Kaival Brands (OTCMKTS: KAVL) could do $400-$450M in revenues for 2021, but we feel the company is being very conservative and that the electronic vaping company could flirt with that magic $1 billion in sales milestone by year end. In a short period of time, Kaival Brands and Bidi® Stick have become synonymous with excellence and premier product offerings within the ENDS industry. Another segment of business is how their increase in distribution, along with the roll out of their smokeless pouches will be synonymous with sales growth.
Right now, as we speak, the company has increased their potential distribution network by an impressive 440% in just 3 short months by going from nearly 10,000 stores to a potential network of 54,000 stores. Our stretch that the company could actually do $1 billion in sales requires a little math, but it’s as simple as this. If they did $100 million with 10,000 stores, then 54,000 stores would equal $540 million right? But let’s not stop there, the company as of 2/1/2021 is shipping bidi pouches so stores are potentially ordering 2x the amount of product from Kaival so $540m x 2 = $1.08 billion. Sure, there are plenty of “what ifs” but then again we are not even factoring in the increase of product sales month over month from new and repeat buyers becoming more familiar with the bidi brand. One store owner tracking his sales showed the progress of averaging 3 sticks a week to 5, then 7 and now 11 bidi sticks per week as repeat business picks up. The company also knows that the more convenience stores that sell their brand, the more self-advertising and easily consumable for customers to be repeat buyers knowing they can purchase them at multiple stores rather than primarily Circle K and 7-Eleven as in 2020. The last “what if” we want to mention is… do you honestly believe management is stopping at 54,000 stores? Of course not, the team will be aiming to achieve an even larger distribution network and we are not even factoring potential territory expansion outside of the U.S. or additional smokeless products or flavors brought to market.
