REG - Chill Brands Group - Business and strategy update

Chill BrandsAnnouncement

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RNS Number : 9973D  Chill Brands Group PLC  20 October 2025

 

20 October 2025

Chill Brands Group plc

("Chill Brands" or the "Company")

 

Business and strategy update

Chill Brands Group plc (LSE: CHLL), the consumer packaged-goods distribution
company, is pleased to provide the following update on its business operations
following the start of its new financial year on 1 October 2025.

Over the past 12 months, the Company has undergone a significant
transformation in both structure and focus, marking a period of strong
operational progress. Having transitioned from an own-brand operator to a
diversified distribution and services group, Chill Brands is now working with
a growing portfolio of global and emerging partners across the fast-moving
consumer goods ("FMCG") sector, including the rapidly expanding nicotine
alternatives market.

This announcement provides shareholders and investors with a detailed overview
of the Company's current activities, commercial agreements and strategy as it
continues to build a scalable, multi-channel business with multiple revenue
streams and long-term growth potential.

Highlights

·    Completed transition from an own-brand business to a diversified,
cash-generating distribution and services group.

·    Streamlined costs base through the closure of non-performing US
operations, eliminating annual costs estimated to be in excess of US $650,000.

·    Appointed by RELX and other leading global nicotine brands to provide
UK nationwide sales and distribution services.

·    Entered into partnership with SYP Global for development of novel
nicotine delivery technology.

·    Established a warehousing and fulfilment centre to reduce costs and
increase operational flexibility.

·    Preparing to launch Chill Connect online wholesale platform for
independent retailers to order directly for delivery.

·    Planning the creation of a trade compliance division to help brand
partners maximise retail performance and promotional value.

·    Continued refinement of Chill.com marketplace with focus on stress
prevention, reduction and relief.

·    Increased investment in paid advertising and multi-channel marketing
to drive traffic and sales growth.

Callum Sommerton, Chief Executive Officer of Chill Brands, commented:

"Chill Brands today is a very different company to the one it was at the start
of 2024. We have evolved into a diversified distribution and services business
with multiple routes to market, supported by new infrastructure and a sharper
consumer proposition on Chill.com. Through our work with both high-growth
start-ups and established global partners, we are building a scalable model
that is agile and positioned for long-term growth.

"The Company has also demonstrated resilience through what was an
exceptionally challenging period. Chill Brands did not just survive - it
reinvented itself, emerging with a stronger model, new capabilities as a
services business, and the confidence of global brand partners who see value
in our platform.

"Our strategy gives investors exposure to a portfolio of brands and categories
that are shaping the next generation of consumer products. Our focus now is on
execution - delivering value for our partners, our customers and our
shareholders."

Overview of Chill Brands' business

Following a major shift in its business activities over the past 12 months,
and the significant progress made in developing its operations, Chill Brands
now operates as a distribution-led consumer goods business that connects
innovative brands with retailers and consumers.

The Company provides a comprehensive route-to-market solution encompassing
sales representation, logistics and marketing support. Through its Chill
Connect distribution network, Chill Brands sells and distributes products from
leading global and emerging brands into the UK convenience and FMCG sectors,
including the rapidly expanding nicotine alternatives category. In parallel,
through Chill.com, the Company operates a direct-to-consumer e-commerce
marketplace that showcases complementary wellness and lifestyle products.
Together, these operations provide opportunities for the Company in multiple
growth channels across both B2B and B2C segments of the consumer goods market.

Chill Brands' strategy provides investors with indirect exposure to a
portfolio of brands that are shaping the next generation of consumer products,
including in the high-growth and rapidly evolving market for nicotine
alternative products - a category characterised by recurring consumer demand,
constant innovation and strong opportunities for revenue growth. Through its
mix of distribution agreements and brand partnerships, the Company sits at the
intersection of established global players and emerging challenger brands,
offering access to growth in multiple segments of the consumer goods
landscape.

The Company's model combines recurring service fees from consulting and field
sales representation contracts with repeat distribution income from product
sales. Once relationships are established, the Company's revenues can scale
without proportional increases in cost, creating the potential for operational
leverage over time.

The recent appointment of Chill Brands by leading companies such as RELX and
other internationally recognised brands demonstrates the confidence of
established operators in the Company's ability to deliver sales growth and
retail coverage in the UK market. These partnerships also validate the
Company's infrastructure and commercial execution capabilities.

With a growing network of supplier and retail relationships, Chill Brands is
actively engaged in discussions with additional brand owners seeking entry
into the UK market. The Board expects to announce further partnerships as this
business grows.

Strategy update

Transition to a distribution model

Over the past year, Chill Brands has recalibrated its business from an
own-brand model to that of a distribution and route-to-market partner. This
shift has established a more diverse and resilient platform for growth.

The Company now operates its Chill Connect retail distribution division under
a flexible model tailored to the needs of its brand partners in the following
ways:

·    High-growth start-ups - Chill Connect provides consulting services,
commercial strategy support and access to its national sales network for a
recurring retainer fee;

·    Established brands - Chill Connect secures distribution rights,
purchasing and reselling products to retail and wholesale customers, earning a
margin from the distribution value chain; and

·    Hybrid arrangements - bespoke structures combining consulting and
distribution, depending on the brand's maturity and objectives.

The Company's distribution-led model also offers a number of advantages over a
traditional own-brand approach. By working with multiple brand partners rather
than relying on a single proprietary product line, Chill Brands reduces
concentration risk and gains exposure to a wider range of categories and
revenue opportunities. This approach provides diversification, scalability and
resilience - insulating the business from regulatory, supply chain or
category-specific shocks that can materially affect single-brand operators. It
also enables the Company to leverage its expertise, infrastructure and sales
network across a portfolio of partners, generating recurring income streams
without total exposure to the capital intensity or marketing spend required to
build and sustain an individual consumer brand.

Competitive advantage

The Company's prior experience operating its own brands, including its Chill
ZERO nicotine-free vape range - which secured listings in WHSmith Travel,
Morrisons and other major retailers - has provided valuable insight into the
commercial and operational challenges faced by brand owners. This background
enables Chill Brands to add value far beyond the role of a traditional
distributor.

In addition to its logistics and distribution infrastructure, Chill Brands
deploys a nationwide field sales team that provides in-store representation
for partner brands. These sales teams engage retail staff, ensure correct
merchandising, and maximise product visibility at the point of sale -
delivering an advantage over wholesale-only competitors.  Moreover, the
Company's large global partners possess the scale and compliance capability to
adapt to evolving regulation in the nicotine alternatives space. This dynamic
creates opportunity - regulatory change now serves as a catalyst for
innovation rather than a threat to operations.

Many traditional distribution models overlook the importance of selling
directly into independent convenience retail, instead focusing primarily on
large key accounts or relying on decentralised wholesaler and cash and carry
networks. Chill Brands' model places greater emphasis on direct engagement
with independent retailers, a channel that represents a substantial share of
UK FMCG sales and acts as an early proving ground for new products. By
establishing distribution at this level, the Company helps brand partners to
build market presence, drive repeat purchase behaviour and generate meaningful
sales data before scaling into national accounts. This bottom-up approach
creates a stronger foundation for sustainable growth and ensures that consumer
demand is firmly established before brands commit to the higher costs and
complexities of major retail listings.

Financial model

Chill Brands' diversified model generates income from multiple sources. Under
consulting and service agreements the Company earns recurring retainer fees.
Under distribution partnerships it generates revenue from a more traditional
transaction flow, purchasing and selling products to capture margin through
the distribution value chain.

Growth in these areas requires working capital investment in inventory,
warehousing and personnel. While these initiatives increase near-term costs,
they build the foundation for scalable, recurring income as the Company
deepens its partnerships and expands volumes.

As part of this strategy, Chill Brands intends to work increasingly closely
with select brand partners, evolving relationships from that of supplier and
customer into long-term strategic collaborations that align mutual interests
and create sustainable shared growth.

Operational streamlining

As part of its strategy to focus resources on activities that deliver the
highest return on investment, Chill Brands has now substantially eliminated
spending associated with its former US operations. This division historically
cost the Company in excess of US $650,000 per year while delivering limited
commercial benefit.

The closure of these activities marks a decisive step toward a leaner and more
efficient operating structure. By redeploying capital and management focus to
the UK and European markets - where the Company has established strong brand
partnerships and clear routes to growth - Chill Brands expects to generate
better value for shareholders.

Growth strategy

In recent months, the Company has announced a series of key commercial
agreements with leading international brands, establishing a strong platform
for expansion. Alongside these partnerships, Chill Brands has identified
several operational initiatives and upcoming product launches that are
expected to serve as important catalysts for financial growth.

Wholesale portal

During the final quarter of 2025 the Company will launch an online wholesale
platform that allows independent convenience retailers to order products
directly from Chill Connect for delivery. This initiative aims to reduce
retailers' reliance on traditional cash and carry outlets, which require store
owners to spend valuable time away from their businesses and purchase stock in
bulk.

By providing a digital ordering platform that is accessible at any time, Chill
Brands will offer a faster, more convenient, and reliable route for retailers
to source products. Retailers will be able to browse a curated range, place
smaller or more frequent orders and benefit from transparent pricing and
prompt delivery. This not only saves time and cost but also improves stock
rotation and enhances product availability on shelves.

Importantly, the wholesale portal will expand on the direct relationship
between Chill Connect and thousands of independent retailers, providing
real-time visibility of customer demand and purchasing trends. This data will
help the Company and its brand partners respond quickly to changes in consumer
behaviour, optimise inventory levels and introduce new products more
effectively.

As adoption grows, the platform is expected to significantly increase sales
volumes by expanding the number of active retail accounts and streamlining
reordering processes. Retailers that previously purchased sporadically through
intermediaries and field sales representatives will have a simplified,
centralised purchasing solution that encourages regular trade. Over time, this
is expected to strengthen brand loyalty, improve sell-through rates and drive
consistent revenue growth across Chill Brands' portfolio.

Warehousing and fulfilment

Chill Brands has established its own warehousing and fulfilment centre in the
North of England, marking a key step in strengthening its operational
infrastructure. Previously reliant on third-party logistics providers, the
Company now benefits from greater control over inventory, delivery times and
cost management.

Bringing fulfilment in-house provides improved oversight and flexibility
across the distribution network, enabling faster response to demand and the
ability to create bundled and cross-brand product promotions that increase
average order values. For brand partners, it ensures consistent service levels
and reliable product availability.

The facility will also support trials of in-house fulfilment for Chill.com,
allowing consolidated deliveries that reduce shipping costs and enhance the
customer experience. Over time, this development is expected to deliver
material improvements in service quality, creating a stronger platform for
scalable growth.

Trade compliance division

Looking further ahead, Chill Brands plans to establish a trade compliance
division to support brand partners with major retail listings.

When consumer goods companies secure shelf space in national chains, they
incur significant costs through listing fees and promotions. However, many
face challenges such as out-of-stock events, poor merchandising or
inconsistent compliance with retailer agreements.

Chill Brands's trade compliance teams will conduct in-store visits to monitor
availability and presentation, ensuring products are correctly displayed and
performing as agreed. This will help partners maximise the value of their
retail investments and strengthen their negotiating position with major
accounts.

In addition to providing in-store support, the development of this division
will enable Chill Brands to gather and aggregate valuable UK retail data, both
quantitative and qualitative. Information such as product availability, shelf
placement, pricing compliance, promotional execution and customer feedback is
already compiled into detailed reports and dashboards by existing Chill Brands
teams. This data will provide brand partners with actionable insights to guide
decision-making, optimise marketing spend, and improve the effectiveness of
future retail campaigns.

The Company is currently in the early stages of discussions with several
prospective brand partners regarding the provision of this service. Initial
feedback indicates strong demand from consumer goods businesses that wish to
gain greater visibility and control over their in-store execution. Given the
significant investment that brands make to secure and maintain retail
listings, the Board believes that a trade compliance service of this nature
could become a valuable and complementary addition to Chill Brands' wider
distribution offering.

Chill.com marketplace

The Chill.com marketplace remains an integral part of the Company's consumer
strategy. The platform is being updated to focus on stress prevention,
reduction, and relief - a targeted and relevant niche within the wellness
sector.

The site will be structured across three verticals:

·    Calm - products supporting relaxation, sleep quality and mental
wellbeing;

·    Power - products that enhance energy, focus and performance under
stress; and

·    Balance - foundational health products such as gut and immune
support.

The wellness market is broad and highly fragmented, and many generalist
platforms struggle to establish a distinctive identity. Chill.com's updated
positioning will better enable it to target a defined and fast-growing
consumer need with tailored content, product selection, and marketing. This
focus is expected to improve customer acquisition efficiency, strengthen brand
recognition and drive repeat purchasing by creating a meaningful point of
differentiation within the competitive e-commerce wellness space. This
repositioning moves Chill.com away from the broad and crowded general wellness
category, giving it a clear identity and unique value proposition as the
destination for stress-related wellness products.

The Company has also increased its investment in digital marketing and brand
awareness campaigns to drive traffic, build recognition, and encourage repeat
purchasing on Chill.com. These activities include performance advertising,
influencer and creator collaborations, and targeted content designed to reach
consumers actively seeking wellness solutions. Building a successful
e-commerce platform requires sustained marketing over time as awareness grows,
audiences convert and loyal customer behaviour develops. This ongoing
investment is therefore an essential step toward establishing a strong and
repeatable revenue base for Chill.com.

e-commerce logistics

Historically, Chill.com has operated on a dropshipping model, with orders
fulfilled directly by brand partners. While this approach has enabled rapid
scaling of the marketplace, it creates limitations as delivery times can vary,
customers may receive multiple parcels for a single order and the Company has
limited ability to influence packaging or create value-added offers.

By trialling in-house fulfilment from its new warehousing facility, Chill
Brands will gain greater control over the customer experience for brands that
elect to stock product for fulfilment by Chill. Orders can be consolidated
into single shipments, reducing costs and improving convenience for consumers.
The Company will also be able to design curated bundles that bring together
complementary products across its partner range, enhancing basket size and
margin. This capability further strengthens Chill.com's positioning as a
trusted destination for stress-related wellness products and aligns the
platform with best practices of leading e-commerce operators.

-ENDS-

 

Enquiries:

 Chill Brands Group plc                                  contact@chillbrandsgroup.com

+44 (0)20 4582 3500
 Harry Chathli, Chairman

 Callum Sommerton, CEO
 Allenby Capital Limited (Financial Adviser and Broker)  +44 (0) 20 3328 5656
 Nick Harriss/Nick Naylor (Corporate Finance)

Kelly Gardiner/Lauren Wright (Equity Sales)

About Chill Brands Group

Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is a distribution-led
consumer packaged goods company operating across the fast-moving consumer
goods ("FMCG") sector. The Company provides comprehensive route-to-market
solutions for both established global brands and emerging challenger
businesses, encompassing sales representation, logistics, and marketing
support. Through its Chill Connect division, Chill distributes products -
including nicotine alternatives, functional beverages, and other innovative
consumer goods - into the UK convenience and retail sectors. In parallel, the
Company operates the Chill.com e-commerce platform, a direct-to-consumer
marketplace focused on stress-related wellness products. Together, these
operations give shareholders exposure to multiple growth channels across both
business-to-business and consumer retail markets.

Publication on website

A copy of this announcement is also available on the Group's website at
(http://www.chillbrandsgroup.com/) http://www.chillbrandsgroup.com
(http://www.chillbrandsgroup.com/)

 

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