- Australian government okays importation of Kava to Australia after an almost 15-year ban
- An expected $10 million to $30 million boost to the local multi-billion-dollar botanicals market
- Australia’s global Kava company Fiji Kava (FIJ) to take advantage of the revitalised market
- The company operates its own Kava farm in Fiji, and has sales and distribuition agreements in Fiji, Australia and New Zealand
- FijiKava will draw on overseas success in its bid to dominate the Australian market.
For every Australian who has ever been to Fiji, their first ever Kava ceremony is a truly joyful, memorable occasion. You begin to see the role that this mystical potion plays in making the Fijians among “the world’s happiest people”, the way it brings families and communities together every night, and the contribution that it makes to sweet, sweet dreams and deep, deep sleep.
But there is so much more to Kava than its “simple” ability to unite communities, make people smile and create a wonderful experience for tourists.
A natural for the botanicals market
A plant with almost magical therapeutic properties, without the drawbacks of side effects or addiction, Kava was always going to be a natural for users of complementary and alternative medicines. That’s a global market estimated at over US$82 billion (A$109.7 billion) in 2020, and projected to grow at over 20 per cent per annum. In Australia, the so-called botanicals market is estimated at $1.5 billion to $2.5 billion per year. A market that local company Fiji Kava (FIJ) is keen to dominate since the commercial importation of Kava recommenced in December 2021.
Fiji Kava: big player in a bullish market
It is estimated that when the federal ban on Kava importation to Australia went into effect in 2007, the loss to Pacific economies was somewhere between $10 million and $30 million per annum — an indicator of just how popular the beverage is in Australia. The Federal Governments estimates that 70 tonnes of kava was consumed in Australia in 2000, the year before the ban came into place. Since the ban was implemented the number of Australian residents with a South Pacific Island heritage has more than doubled, growing the potential market significantly.
The federal government legislated to allow the importation of Kava for both personal and commercial use beginning in December 2021. Among the beneficiaries of this change are the members of the Australian Pacific Island communities who have been missing their regular Kava ceremonies, and those people who recognise the advantages of taking Kava as a muscle relaxant, anxiety treatment and sleep promoter.
But the big winners will be those companies best placed to take advantage of the newly revived market for Kava and Kava-related products — and that puts Fiji Kava squarely in the spotlight. In fact, around 60 per cent of the volume of drinking Kava imported into Australia has been via Fiji Kava’s Australian arm, which was previously licensed to import medicinal kava extracts and thus well prepared to navigate the new importation regulations.
A grower set to keep growing
An Australian-based company that is still the only foreign company approved by the Fijian government to operate within the Kava industry, Fiji Kava is already a global supplier with markets in the United States, Fiji and New Zealand. With over a decade of Kava botany and technology research behind it, Fiji Kava has established a reputation for being the world’s most trusted “Noble” Kava supplier. Food Standards Australia and New Zealand recently updated the regulations around kava as a food and beverage in Australia and has now mandated that only Noble varieties of kava be allowed.
Fiji Kava CEO Dr Anthony Noble said that while the Fijian Australian population is expected to help keep sales buoyant in the immediate future, the real growth would be in building awareness of the benefits of Noble Fijian Kava for the wider Australian population.
“We see more than 300 kava bars now in operation in the USA. These are not just serving Pacific Island communities, but a broad spectrum of the population looking for alcohol free ways to unwind and socialise,” Dr Noble said.
“The number of people under thirty who are seeking to live an alcohol free lifestlyle has grown several fold in the last decade and now includes over a quarter of this age group. That’s a huge market for alcohol alternatives, and given the health benefits of Kava and its thousands of years as a recreational drink, our opportunity to tap into this market is enormous.”
A global plan for expansion
Including the local market in its plans for global expansion means that Fiji Kava can apply some of the tactics deployed successfully in overseas markets to the Australian market.
Bringing together a unique product line with an established international marketing presence and proven manufacturing, distribution and sales strategies, as well as a reliable quality supply from its own network of Fiji farmers, Fiji Kava has a significant lead on other companies, according to Dr Noble.
“This is exactly what we have been waiting and planning for,” he told The Market Herald.
“The team has spent years refining our processes for selecting Noble Kava varities and blending drinking kava to enhance palatability and maximise effectiveness, what the Fijian consumers call ‘the kick’. Here in Australia and the USA our team have a solid track record of developing and marketing successful consumer products and brands for a range of markets,” Dr Noble said.
“Coles was the first to adopt our products, and we have a well-established partnership with Chemist Warehouse, who are also our second largest investor. We also sell Kava raw materials to a number of well known brands in the USA through the large IMCD Network Nutrition group, who are becoming an increasingly important business partner for us. In the USA, we have rebranded as The Calmer Co, to reflect our broader ambitions there. Our US plans focus on building a range of functional beverages for the retail, B2B and DTC channels. We recently acquired a patented technology and a boutique CBD company, Danodan. The acquisition is accelerating our progress into beverges and liquid formats and adding a great new ingredient to our product development toolkit. We are well on track to continue the growth trajectory set by our record breaking sales results in both the first and second quarters of 2022.”
Fiji Kava finished trading last week at 6.2 cents per share.