REG - Chill Brands Group - Trading Update

Chill BrandsAnnouncement

07/09/2023 07:00

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RNS Number : 6976L  Chill Brands Group PLC  07 September 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

7 September 2023

Chill Brands Group plc

("Chill Brands" or the "Company")

Trading Update

Chill Brands Group, the consumer packaged-goods distribution company, is
pleased to provide an update on its operations.

Overview

·    UK retail sales operations began in August 2023 with sales to an
initial 120 outlets.

·    Increase in e-commerce website traffic since commencement of online
vape sales.

·    US pilot stores demonstrating product sell-through, with discussions
with distributors progressing.

·    US vapour products range expanded to include 1,500 and 3,000 puff
devices.

UK Sales Operations Commence

UK sales of Chill Zero nicotine-free vapour products commenced on 7 August
2023. Initial sales have been made to 120 retail outlets including independent
retailers, vapour category specialist stores, bars and nightclubs. The Company
continues to activate additional outlets with the support of its UK sales and
marketing partner, The Vaping Group Ltd.

The appetite for Chill Zero products demonstrated by these outlets has
facilitated discussions with national retailers and buying groups. Chill
Brands will continue to expand its independent store footprint and satisfy
repeat orders from existing stockists while seeking to launch sales with chain
retailers as soon as possible. Further information regarding major retail
launches will be provided when appropriate.

The Company has noted a significant increase in traffic to the Chill.com UK
site since online sales of its nicotine free vapour products commenced on 10
August 2023. This has resulted in an uplift in marketplace product sales as a
proportion of Chill Zero vapour products customers have also purchased from
the third party brands marketed on the site. The Company continues to expand
the range of products available on the Chill.com website and has most recently
signed further agreements with multiple brands wishing to launch on the
US-facing site.

Update on US Vape Pilot Stores

Further to the US launch of Chill Zero nicotine-free vapour products earlier
in 2023, the Company has been working with pilot stores to establish product
market fit and sales data. This pilot programme has resulted in the activation
of select stores within the Colorado, Arizona, Florida and Texas markets.

The pilot stores have delivered positive results, including encouraging sell
through rates that demonstrate healthy consumer demand for the products.
Reorders for newly activated stores are occurring within an average of four to
five weeks and numerous multi-store operators have expressed interest in
stocking the product range across their full store footprint.

The data gathered from the pilot programme has enabled the Company to commence
discussions with larger distribution partners. This includes the buyers of a
national smoke shop chain who, following August trade show attendances, have
given positive indications regarding their intentions to stock Chill Zero
products. Based on these discussions the Company is actively preparing to
introduce its 1,500 and 3,000 puff devices into the US market.

Callum Sommerton, Chief Executive Officer of Chill Brands, said: "The Chill
Zero range of nicotine-free vape products is off to a great start. A
successful entry into the UK and positive results from our US pilot stores
reaffirm that this is a category with significant growth potential.

Many stockists of the products have commented on strong demand for
nicotine-free alternatives and often highlight a lack of existing quality
options on the market. There is a clear opportunity for Chill Brands to become
a market leader in this space, particularly as we begin to market and sell the
products to major national retailers. These conversations are progressing well
and I look forward to updating our shareholders further as our plans come to
fruition."

-ENDS-

About Chill Zero Vapour Products

Chill Zero vapour products are flavoured, disposable personal diffusers. They
offer a similar experience to traditional vaping products but without the
addictive effects of tobacco or nicotine. They appeal to a wide range of
consumers including those who wish to quit smoking or reduce their nicotine
intake, as well as those who enjoy the flavours, sensation, and social aspect
of using vapour products.

Research suggests that the market for vapour products could exceed US $55
billion by 2029, with more than 26 million Americans already using vaping
devices both recreationally and as a functional alternative to traditional
tobacco products.

Chill Zero vapour products are available in a range of sizes and flavours
including 1,500 and 3,000 puff variants that last longer than the conventional
600 puff products marketed by competitors.

About Chill Brands Group

Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is concerned with the
development, marketing and distribution of wellness and recreational products
containing natural, functional ingredients. The Company's proprietary product
range is distributed by some of the most recognisable convenience retail
outlets in the US and includes nicotine-free disposable vapour products that
cater to the rapidly growing market for tobacco alternatives. Chill Brands
also operates the chill.com e-commerce website, on which it is building a
marketplace of products from third-party brands.

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/)

Media enquiries:

 Chill Brands Group plc                                      contact@chillbrandsgroup.com
 Allenby Capital Limited (Financial Adviser and Broker)      +44 (0) 20 3328 5656
 Nick Harriss/Nick Naylor/Lauren Wright (Corporate Finance)

Kelly Gardiner (Equity Sales)

 

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