The Calmer Co International Limited (CCO) Earnings Call Transcript & Summary

First of all, I'd just like to welcome everyone to this investor update. Just it's really a chance for us to have a bit of a summary on FY '26 and talk a little bit about the elements that are building momentum into FY '27 and particularly some time for Zane to explain in more detail about some of the recent announcements and what that means for the CCI for FY '27. With that in mind, I'll pass you over to Zane.

Thank you, Matt. Good afternoon, ladies and gentlemen, investors, shareholders. We've got a comprehensive few slides to go through, some of which I will touch on very briefly. They are self-explanatory. I'd really like to look back at FY '26, seeing what we have been able to do and achieve through Calmer Co in the last 12 months. But more importantly, looking ahead at the year ahead of us and what those recent announcements, which we pushed out over the last week or 2 means for the Calmer Company. So really, with the comprehensive investor presentation that I've put out, I really wanted to talk about where we've transitioned the business in terms of revenue generation and reliance but more importantly, looking ahead as part of our next steps with restructure out of Fiji, supply agreement that we've been able to announce the market, but also what the exclusive distribution agreement means for CCO and tying that to a broadening of ingredients offerings with our extracts beyond kava to include ginger and tumeric and the reasons for that. But looking at the history of kava and really where we're seeing the reasons for what's driving demand. Kava is certainly a special ingredient, as most of you know. There's not too many functional ingredients that have had the scrutiny or the success from a clinical trials perspective to qualify kava as really this next evolution as I see it, given the foundations that we've been able to put in place looking back at what happened historically with kava and looking at ahead now with why that is different and why that's very important in setting the foundations for scale, not just for CCO, but the kava industry at large, especially around quality, around sustainability and beyond. Thank you, Matt. So the 4 pillars of growth is what we communicate to shareholders consistently across the Calmer Company. The first one is regional supply, innovation and manufacturing excellence. The second one is direct-to-consumer, including Amazon. The third strategic pillar is profitable, scalable retail and -- followed by wholesale bulk ingredients. And more recently, the developments under the strategic pillars really around the -- announcement around the strategic partnership with the binding heads of agreement that we've signed with Kaiming Agro Processing, what that means with bringing more efficiency to manufacturing out of Fiji and reducing cost as well. The signing of the supply agreement to broaden our scope with raw material supply outside of Fiji to include a more meaningful volumes with Vanuatu material and Papua New Guinea material. And again, how that's very important given the more strategic direction right across the Pacific now and how that's driven through the regional kava development strategy that all Pacific heads of government are committed to. And speaking to that progress and what that means for CCO, again, given the importance of a quality supply chain behind us to ensure we continue to build on momentum to meet demand in various channels with the market. Direct-to-consumer, including Amazon, we've recently transitioned back our direct-to-consumer. That's our fijikava.com and takimai.com platforms to building that once again in-house versus outsourcing that externally to an agency. We'll speak to that, and Matt will contribute to that part of the discussion as well. The third one, of course, is Matt's wheelhouse, and we've been able to see extremely strong growth across retail, not just here in Australia, but we'll speak to what the appointment of We Driven means for CCO as we dip our toes into the waters, so to speak, in the United States and finally look at retail penetration, given some of our learnings on Amazon U.S.A. over the last few years in the business. And of course, my favorite topic, of course, is wholesale and bulk ingredients and speaking to the exclusive distribution agreement that we pushed out recently, and certainly, the minimum performance targets that we've put into the agreement with this multinational and what that means for CCO looking ahead at FY '27. Next one, please, Matt. So again, life is -- modern life is very stressful. Anxiety, insomnia certainly on the rise. We've seen a lot of folks now move away from alcohol. And certainly, kava is filling a really nice niche. Like I spoke to earlier, I guess, for me, there's not too many ingredients, botanical ingredients, particularly that have been put through the amount of rigor and clinical trials like kava has. Historically, a lot of folks don't realize this, but kava was a prescription medicine in some European countries for a number of years, supported by very strong clinical trials. So as we take next steps, understanding those functional benefits of kava as an ingredient with moving into this exclusive distribution agreement, we can speak to the importance of the standardization aspects. I'll touch on some of the importance of the quality framework and testing and the rigor that we put in place in CCO to be able to support these next steps in being able to secure and supply with confidence a quality ingredient from right here in Fiji into international markets. More recently, we've been able to communicate consistently about our success at retail. We are #1 and #3, respectively, in the stress category across cold supermarkets Australia-wide in only a very short amount of time. And we've seen certainly mainstream adoption of kava now in Australia and hoping to replicate the success in the United States. There are certainly a lot of green shoots that we've been able to see with brands and penetration into various channels in the U.S., but we think we bring something unique with the vertical integration and our storytelling and the quality that comes with that as well. Thank you, Matt. So we've spoken to kava's current regulatory status. I guess, in 2017, Codex Alimentarius, which is the Food and Agriculture Organization as well as the World Health Organization moved to implement a regional standard for kava, Noble kava specifically and how we consume kava traditionally in the South Pacific when kava is mixed with water. That's been recognized by Codex as a food and progressively with markets such as the United States as well as Australia. Kava when mixed with water certainly has been recognized as a food. More recently, with the state of Hawaii in 2024, the Hawaiian government moved to recognize kava as grass, which is generally recognized as safe and certainly the first U.S. state to set that precedent in the U.S.A. for kava when mixed with water specifically. So here in Australia, for instance, kava powder that we sell in Coles and Woolworths is regulated as a food under Food Standards Australia and New Zealand Standard 2.6.3 specifically. In May this year, Chairman, Jim and myself were able to brief Congress in Washington, D.C. as well as meet with the FDA to brief the FDA on the work that's being undertaken right across the South Pacific as it relates to the regional kava development strategy, the work with Standards Australia to develop standards for kava when mixed with water, recognizing the regional kava development strategy and the commitments by heads of government to support all of this, but to also include more broadly standards for extracts particularly. We have an FDA registered audited facility. We take pride in being a pioneer in the industry in the South Pacific, certainly with the traceability and transparency with our supply chain, having built relationships for many years right across various provinces in the Fiji Islands, but now moving into a regional supply chain to include Vanuatu, Papua New Guinea and still only dribs and drabs right now coming out of the Solomon Islands. But as farmers grow more kava, certainly, there will be more demand given the quality that we've been able to see out of the Solomons, for instance. But certainly, we've seen the Solomon kava industry really reemerge because they were a large contributor to kava aggregation and supply right across the South Pacific going back over 20 years ago. So it's certainly good to see that the collective work with the heads of government are rebuilding confidence in markets such as Samo and Tonga to ensure that we are able to supply into international markets to fulfill growing demand. Thank you, Matt. So this is what I was speaking to earlier, and I'll touch on this very briefly because kava has really -- we've seen ingredients or functional ingredients from botanicals like THC go crazy in markets in Europe as well as the United States. You consider kava, there's not too many functional ingredients where you try an ingredient, you feel the effects immediately. THC certainly comes to mind and kava is the other where you try this ingredient and you feel it almost immediately, right? So -- but if you consider THC versus kava, kava has been through numerous clinical trials, not just in Australia, but right across Europe for decades. proving kava's safety and efficacy for treating anxiety disorders specifically. And again, I come back to what's driving the demand for kava and with modern lifestyle, certainly, stress is on the rise. With stress, of course, comes the anxiety. And with the anxiety comes the insomnia. So the 3 are directly correlated. So because kava has had a strong historical success as a clinically proven ingredient for treating anxiety, that's what we are seeing that's driving repeat purchase for our products because kava certainly works. You drink kava, the shoulders drop and you feel a lot more relaxed, but also given the decline in alcohol consumption right across the globe, certainly, in the United States, for instance -- sorry, alcohol consumption is at a 93-year low. And kava is filling a very nice niche in that regard. So we've seen the boom and bust of kava historically, particularly as a prescription medicine in Western markets. However, at the time, there were no regulations. There was no quality frameworks in place. There was no standardization of exports out of the South Pacific. Fast forward 20 years, and I spoke to the Food and Agriculture Organization and the World Health Organization now recognizing kava as a standard for kava when mixed with water. We have dedicated kava legislation in the South Pacific. Vanuatu kava Act has been in place since 2002. The Fiji kava bill has now completed the stakeholder consultations across the country and the national kava policy framework has been completed. Just last week in parliament, the kava bill was tabled for discussion. So it's good to see that finally, there will be a lot of regulation in the industry in Fiji because that benefits companies like Calmer Co who have been operating within the framework from a quality, from a compliance perspective going back to 2012. Now with HACCP Australia registration and accreditation with our manufacturing facility, that simply means that we are recognized as a food compliant manufacturing facility. That tied together with the FDA registration and audited facilities for sale of dietary supplements in the United States. Now taking one step further to put in place CGMP frameworks for CCO right here in Fiji as well, giving more of the platforms that we're looking to continue to grow our business in the United States, such as Amazon and retailers are requiring more of these quality frameworks to be put in place to be able to sell these products. So certainly, we continue to lead by example in the Pacific as it relates to quality, consistency, sustainability and traceability right across our supply chain. Thank you, Matt. So again, I keep speaking about the importance of building off a very strong foundation in supply chain and quality. We've been able to demonstrate over many years, establishing grower relationships right across this country, speaking to increasing that now beyond Fiji to include Vanuatu and Papua New Guinea and certainly looking broader than that with our next steps as well. We are an FDA-registered audited facility here in Fiji. We have a full blockchain traceability and transparency from individual pharma or communities where we source from through to finished product. And certainly, we are continuing to focus and build further strength with our quality framework here in our manufacturing facility in Fiji, and we'll continue to do so with the transition with the partnership with Kaiming Agro Processing as well. Thank you, Matt. So again, this might not mean too much for folks on the call, but it certainly is for a company like CCO, being able to qualify raw materials that come into our factory from a potency perspective, from a chemotype profile perspective with lots that we bring in with our trucks. And by the time we blend that into a batch, being able to deliver consistency with our finished products is very important for repeat purchase. And certainly, with the exclusive distribution agreement that we've been able to sign, that business requires a high level of quality, consistency with the ingredient that we are bringing to market. So to give you an example, here in Fiji, there are two facilities. There is the University of the South Pacific as well as Douglas Pharmaceuticals that do something called HPLC or high-performance liquid chromatography analysis, looking at the concentration of kavalactones in the raw materials sent to those labs, but also looking at the chemotype profile or the kavalactone makeup in concentration across the 6 major kavalactones. The challenge though for companies like us and other exporters in the country is it takes currently 5 to 7 weeks for a sample to be analyzed and the cost to test one sample is USD 300 to USD 400. So just to give you some insight into how that works and the economics and the importance of being able to do GCMS testing in-house is -- I won't speak to what this is costing us, but it is a fraction of what we've been paying for external services to date. But being able to react within 24 to 48 hours to make decisions on where that kava that we brought in from various locations is allocated in terms of manufacturing internally, whether that goes to a water extraction, whether that's been allocated to CO2 extraction or whether that goes into a Fiji kava or a Takimai branded product. and being able to make those decisions within 24 to 48 hours is transformational in a business like ours. When we blend kava here with our 1 tonne blender, there may be 3 or 4 different lots that go into that blend. So certainly, being able to understand what that lot contributes to in terms of a finished batch from a potency perspective, from a chemo type profile perspective is very important. Like I said, before that material is allocated a journey along its route into various channels in the business. And certainly, like I said, the saving that we are able to realize with having the ability to test our products in-house is transformational from a cost perspective, but also from a decision-making in this business. Thank you, Matt. So we all know that kava is growing right across the United States, Australia, New Zealand and elsewhere. The demand is largely concentrated around Asia Pacific. Australia certainly has seen very strong demand. Since the kava commercial pilot trial was announced in December 2021, we've seen over 650 tonnes of kava imported into Australia with certainly Fiji taking the lead there with over 50% of those import volumes into the country. So kava is no longer a niche. Kava is a mainstream health solution for many folks looking to relax and unwind, but certainly looking to replace that bottle of beer or glass of wine with a nice glass of kava. Certainly mixed to your own preference and to your own taste buds, of course, given the challenge that kava has with its taste. But certainly, what's driving that is kava replacing alcohol, but also filling that niche like we spoke about with its functional benefits as an anti-anxiety ingredient. Thanks, Matt. So kava certainly is going mainstream in the United States. There was a survey conducted in November, December last year, where it's estimated that 10.7% of Americans have tried kava more than once. There's more than 600 kava bars now right across the U.S.A., a large concentration of those certainly across Florida, California and Texas. But kava, again, is being driven by its benefits as a functional ingredient, but also as a nice, healthier alternative to alcohol. And certainly, to support the Codex framework recognizing kava when mixed with water as a food, having the FDA recognize that as well with communication with the Los Angeles County two retailers earlier this year is certainly very welcomed. There's a lot of growing consumer awareness spanning kava bars, functional beverages, dietary supplements and mainstream wellness retail platforms right across the country. So the regulatory framework certainly is helping take kava more into mainstream channels across the U.S.A. Thanks, Matt. So this is certainly something that we can jointly touch on, Matt, because we've seen quarter-to-quarter being able to demonstrate the demand out of the U.S.A., and that continues to grow outside of the exclusive distribution agreement that we announced recently. And I'll touch on the benefits in the way we were able to structure that given the kava-outs there and the existing relationships that we currently service. So if you want, we can touch on what that might mean with our kava bar penetration and how that's continuing to grow, Matt. We can speak to existing functional beverage companies and extract formats that we currently supply to in the United States. all outside of the exclusive supply distribution agreement that we announced as well. So I'll let you jump in briefly here, Matt, to expand on some of that, please.

Yes. Talk to a little bit later on, but also some pieces here, I think specific to the U.S. I think we're seeing and continue to see some major players move with a kava ingredient in retail. That, along with the growth in Amazon has really triggered our timing with working with We Driven in the U.S. to explore and execute in around distribution. What we've seen obviously success we've been able to gain here in Australia, particularly in coal, but also building in Woolies. And there's what we call that white space in the U.S. in that retail piece that we've already taken initial steps with and happy to say we're already starting to move towards some meetings with some major retailers there. So it's some exciting times. I think also the kava bar space and I guess the raw kava opportunity in the U.S. continues to build momentum and where that momentum is, is an opportunity for us. We're building platforms and supply chains to specifically get that and take opportunities in that over the next 12 months, really building on the momentum in the overall category, but the opportunity that our supply chain allows us in terms of executing both into the raw kava side, but that retail finished product side where we've got the experience from Australia coming through.

But also something that we should consider as well, Matt, and something that we're working on internally is a B2B platform for supply into the kava bar market, for example, right? That is meaningful. So maybe let's speak on that briefly as well.

Yes. Look, I think that's kind of what I meant by platform, I probably was light on it. But what we're kind of seeing is with a category that's in growth, it's also got quite different ends of the spectrum. And while we focus on building and creating long-term volume agreements with key players, we're also understanding that, that breadth of opportunity, for example, in kava bars, but also now starting to spill out into smaller retailers that are looking for alternatives for things like the CBD and then [indiscernible] where they're feeling the pressure of restrictions on them. So what we're currently building to establish is literally a wholesale come serve yourself opportunity for everything from your powders to consumer products that really allows us to spread and make sure we are earning money while we're working on the other key relationships and the large sustainable branded or direct to customer. We're also picking up and building on those -- that volume that can come through in this, I guess, momentum that is swinging through kava bars now outflowing into smaller retail and convenience.

All right. Thank you. We'll move on to the next slide. So this is where I'll speak to the first more recent announcements that we pushed out to the market, and that's really around the strategic manufacturing partnership with Kaiming Agro Processing. Some of you who may be long-term shareholders in the company will recognize the name Kaiming Agro Processing because he is our landlord here in Fiji. He's also the largest manufacturer of ginger and turmeric products and exporter, particularly into the United States, New Zealand, Australia as well as into Europe for ginger and turmeric products. So Calvin had been supporting companies like the Ginger People, for example, who've done extremely well building presence in the United States, particularly, and he's been working with companies like this from a contract manufacturing perspective for well over 12, 13 years now. I had a look on Amazon recently with the Ginger People, for example, in one of their products. They've had more than 16,000 reviews and all 5 reviews, which is a very, very nice to have for brands looking to build momentum on platforms like Amazon USA, particularly, but it speaks to the size of that business as well. And like I said, Calvin has been supporting them for many years now and was looking to expand beyond that to include turmeric and ginger extracts, particularly given his subject matter expertise. So this relationship is now coming closer together with Kaiming Agro Processing, and bringing more cost reduction and efficiency to the way we've been manufacturing our products here in Navoa and Fiji to consolidate these operations with the construction of Kaiming Agro Processing's new facility opposite his current ginger processing site. He's invested multimillion dollars into the establishment of this new factory. And also, he had made a commitment to move into supercritical CO2 extract formats for ginger and turmeric. And he knew that we were already developing a market and securing customers for the sale of kava extracts. So we've put our heads together to agree that Kaiming will also supply us exclusively kava extract formats from supercritical CO2 equipment that he's putting in place shortly, but also taking control of the manufacturing of our Fiji kava and Takimai and authentic Fiji kava products that we have under our brand portfolio that we manufacture in country at the moment. The timing for this is, we complete Phase 1, which is the binding heads of agreement with Kaiming by December this year. But what this means is there's 0 CapEx as it relates to investment in new CO2 extraction equipment, spray drying, blenders, so on and so forth because Kaiming is making that investment into a beautiful facility. I walked through the facility 4 weeks ago here in Fiji, and it's certainly very, very impressive with what I've been able to see thus far. So I'm excited for this partnership. That's for sure. But what this gives us is beyond kava, given the growth and demand for ginger and turmeric products, kava is the #1 export out of Fiji right now, but closely behind that is turmeric, followed by ginger. So given the supply chain in Fiji and Calvin's confidence in growing to become the #1 exporter and manufacturer of ginger and turmeric products across the globe, that gives us additional extracts that we can sell straight into existing distributor relationships that we have with CCO gives us additional revenue as we continue to grow as well. But I'll speak to some of the value propositions as it relates to ginger and turmeric coming out of Fiji versus what we've tested from South America and India, for example. We'll go to the next slide. Thanks, Matt. So with this operating model with Kaiming Agro processing, I guess, we focus -- we continue to focus on brands, IP, product specifications, customer relationships, basically the R&D and innovation with our strategic pillar 1. We continue to control the supply chain as it relates to kava, and we bring in a quality raw material into the factory to be converted into finished goods. and we have the offtake of that to service existing channels in the business, whether that be retail, online, including Amazon as well as wholesale relationships in the business. But in building the CO2 extraction business to date, we've been able to establish relationships with partners in India as well as in Victoria in Australia, and we'll continue to do so alongside this new initiative until such time as we are comfortable with the volume and quality that we are able to export out of Fiji and the cost savings that certainly come with that. So again, to reiterate the investment that Kaiming is looking to make with these next steps around CO2 extraction and spray drying equipment, he will be -- we are looking to lease our equipment from this facility and establish it in the new facility opposite his ginger plant. He will take care of the manufacturing, blending, packaging, engineering, production scheduling, but we help him with the quality control of that raw material going into that facility. And that relationship is over 3 phases as we've communicated to the market. Phase 1 is the binding phase of the agreement, whereby in Phase 2, we're looking to sell the equipment to Calvin, followed by potential consideration around any further strategic collaboration beyond contract manufacturing partnerships with Calvin and his team. Thank you, Matt. So the second agreement that we pushed out recently was around a supply agreement with a minimum holding commitments by the supplier to the tune of 10 tonnes of raw material, 5 tonnes from Vanuatu and 5 tonnes from Papua New Guinea with no obligations on CCO to purchase those volumes. But what that does translate to in terms of raw material costs annually is circa AUD 8.65 million worth of raw materials from Vanuatu as well as Papua New Guinea. But it gives us, like I said, regional diversification. It is noble kava grades. And the way we've been able to build that supply agreement is we also become a testing center for all the raw materials that this company brings into Fiji that's subsequently reexported out of the country or sold domestically. So again, it's additional revenue for our GCMS equipment with our next steps in that regard, but ensuring that the material that's brought into the country, the material that's sold to us is certainly built around a very comprehensive quality framework as well. Thank you, Matt. So with this one, I've spoken to the importance of broadening beyond kava extracts to ginger and turmeric extracts. And perhaps at this juncture, I'll speak to the value proposition as we see it, Matt. Maybe we can both do this. But certainly, I know we've sent a lot of turmeric samples to external labs for analysis. So maybe let's speak to what those value propositions might be for Fiji-derived turmeric and Fiji-derived ginger. And given some of the MOUs we've already put in place from a supply chain perspective as it relates to organic certified -- or Australian certified organic for ginger, for example, and turmeric, for example, what that means for CCO.

Yes. I'll let you get into the more science side of it. But I think probably just from a sales commercial side, I just sort of wanted to jump in to work because they work side by side with what we're saying here as well as the lovely opportunity here is what we've carved out with our business today with kava and it's still very much our focus and our lead opportunity. We see so many common parts, so many common customers and so many common opportunities built in around it that this opportunity to work with Kaiming and broaden that extract offering just made completely sense because we're increasing our revenue capability with very, very, very minimal changes to anything else in the system. In many, many situations, it will be same customers looking for such a high-quality ginger and turmeric. We've got opportunities in our key channels such as Amazon as well as direct-to-consumer, where these products do extremely well as well as our growing wholesale opportunity and even considering down the track, understanding where this can convert into something that is retail, all very much again with the tracks that we've already laid and the relationships that we already have in 90% of the time. So it's an exciting one from a commercial revenue side opportunity for myself when I see it as well as when we start talking about the product, it actually has got a real point of difference. And I'll probably let you jump into that, Zane, for the ginger and turmeric to kind of talk a bit about some of the words that I sometimes struggle to say.

Yes. So I guess let me start with ginger, right? So like I said, Calvin certainly has built a very strong business here in Fiji, exporting in ginger and turmeric products over so many years. And I guess there is a strong demand for organically certified ginger from what we're seeing and from some of the discussions we've already had with potential partners and even existing partners with distributors that we're already working with. So the organic certification is one. But if you look at turmeric, for example, and like kava, the active constituents in kava, your kavalactones. When you speak to turmeric, it is your curcumin is the active ingredients in turmeric. And I know having tested some samples from South America and India, the curcumin levels from Fiji sourced turmeric, almost 5x higher than what we've seen from Indian extracted turmeric or a South American extracted turmeric. So certainly, there is a very strong point of differentiation and certainly a value proposition to make the sale for you a lot easier in that regard, Matt. So I'll stop there. Okay. We'll go to the next slide. Thank you. So the exclusive global distribution agreement that we've announced was specifically around kava extracts. And the important part of that really is, like I've been able to communicate earlier was although we have minimum performance requirements to the tune of AUD 25 million over 3 years, we were able to carve out our existing customers that we service with a fairly comprehensive list as well. So that is additional revenue that we are servicing currently for the wholesale channel, but certainly building on with our next steps as well. With the bulk of the revenue, we're looking at the initial year 1 minimum targets of 5.5 million for water extracts as well as for CO2 extracts, but the bulk of the revenue is coming from our standardized 30% kavalactone CO2 extracts, where we are certainly seeing very strong demand for. The agreement also has a co-branding component to it, allowing us to use the brand on our finished products in some instances as well. And we have a periodic review mechanism every 12 months and mutual rights of facility inspection to go with it. So this is a significant agreement for CCO in the sense that we are working with a multinational that has reached over 60 countries. I certainly wish we could sell our kava across those 60 countries. It's very limited at the moment from a regulatory headwind perspective. But certainly, if we did look to plug in, for instance, turmeric and ginger extracts, we are able to sell those just about in all of those 60 countries. So more to come on that front. But certainly, a very exciting partnership or exclusive distribution agreement with a multinational ingredients company built for success. Thank you, Matt. So it is for an initial 3-year term, subject to hitting minimum performance requirements as well. So the market opportunity, I won't spend too much time here. This is fairly self-explanatory, looking at ginger extract market as well as broader ginger route market demand globally as well as for global curcumin levels per region. Let's go to the next slide. Thanks, Matt. I'll probably hand over to you here, Matt, with the 3 engines powering our growth, and we can speak to this in more detail.

Yes, absolutely. So obviously, we very much talk about our pillars, and these reflect in those next 3 after our sourcing. Off that base, it's important that we're making sure we've got a balanced opportunity to growth and not having all the weights into one. And we spent a lot of time in the last 12 months building each to have a direct growth opportunity as we head into this next financial year. I think some key pieces around D2C and Amazon. Again, huge opportunity for growth. The U.S. has shown with the Amazon side of the business. It continues to grow and the ceiling is not there. There's an opportunity to keep pushing that through, both with the Fiji kava and the TuckyMy opportunity. Probably the big piece to kind of give us some good traction there is we've seen our percentage grow. We've seen the brand percentage grow, and we've seen an increase in subscriptions over the past year, which really show that we've got customers that want to stick. The big one where we see there's even, I guess, an opportunity to show more rebounders in the D2C, and we've recently brought that back in-house. We see it's far more not only efficient, but I think effective way of running the online business, and it gives us ability to make changes in an instance when we see the opportunities and how we need to mold both brands and each of the markets that we're in. So that's very early stages, but we're very happy with the positive results so far in terms of an opportunity, first of all, reducing some of those costs, but also where we can see it trending in terms of sales. So very excited on what we can do there. And as we sort of touched there, the opportunity just from a cost management point of view, but really for us overall in terms of what we can execute in growth is the bit that excites us. The second part is retail. Coles, I think everyone will be familiar with and our success there. But I think also Woolworths off a single SKU listing of our 50 gram continues to grow, which is really, really positive. And it sets us in a situation where we can look at the data coming out of Coles and being #1 and #3 in the stress category nationally with them, what we can do and control it around these retail space to bring more people in to the kava space. Retail not only offers a great revenue and profit opportunity, it's a huge trial and awareness base for us. People get day-to-day exposure to the category, which we pretty much lead and control in each of those. And bringing in new products like we just had accepted by Coles such as the effectively a flavored kava in a tablet format, the effervescent, we'll then broaden that exposure as well to people that are looking to come into a category that they may be less aware of or have only heard the small about the benefits and be able to take it into something that might fit more into their daily impulse strategy. So we create a bigger funnel for people to come in and continue to grow that retail base. And obviously...

Matt, I'll pause there, because I just wanted to ask you this question, and I'm sure a lot of folks on the call would want to know about this. We keep speaking to the performance at Coles. How is Woolworths in comparison?

Yes. Look, I mean, it's really interesting given they've got only one SKU. And when you're working in retail, one of the toughest things to do is to grow a SKU product because you literally stand on there in a very big open shelf and you've got to fight for your space in your voice. Yet the 50 gram at Woolworths has probably grown to the equivalent size of what it is in Coles at the moment. So -- which is really encouraging, given shelf space is generally key. So yes, we're very positive where that's gone. And hopefully, that sort of leads to more down the track with Woolworths. But the key thing is working with the product we've got with them now and making sure it keeps showing the strength that it has today. And I think sort of what we chatted on earlier, so I won't spend a lot of time on it, but is if we can just take the right steps into the U.S., and I guess taking really considered smart steps in picking the right retailers and picking the right products and learn from what we've done here in Australia and obviously be able to accelerate that, the opportunity over there is huge. There's immediately 2 or 3 major retailers that fall very much into a target market that we're looking at. And they've already started to consider or arranging kava products, which shows there's an interest, where our products can come in and not only show a quality point of difference, but potentially a positioning point of difference as well. So very exciting times there. A lot of hard work to be done. And in retail, things take time, but we are very quickly taking all the steps and putting everything into place to be able to act on the opportunity as soon as it comes about. And then I think wholesale is obviously a bit of a baby of an Zane and I in terms of the opportunity that it provides. And this has very much come from very -- I won't say nil, but it's not -- it wasn't a channel we were looking at and focusing on as little as 12 months ago. And what we'll be able to do it in that 12 months, both from a product point of view and quality point of view, but also a building pipeline has been really encouraging. We've now got a range of products that the market wants. We've got a quality supply chain sourcing that can deliver on it with confidence. And then I think the important part is we're making the right steps also with all our partners, making sure that they are there for the long term and being able to support and drive with those various channels that we're looking at. So sort of really exciting sort of steps that have been made in this past year that lead on to the momentum we want to keep driving into FY '27. It leads on to a little bit more here on the wholesale side. I think -- the reason that we keep highlighting this is -- and it sort of comes from some questions in the chat. I think it's an interesting object. While the growth of kava and kava-associated products is in a building momentum in multiple markets, it's really important that we don't completely just focus on the consumer product and understand where one of our key point of difference in those other slides is our supply chain and wholesale allows us to provide products that we can have a good business commercial margin on that we don't need to have all that post-sale work on. We don't need to be doing -- and I referred to one of the questions in the chat. With wholesale, we don't need to be spending all the money on the educational process. We support them to then go out there and help us educate everyone. And we get the same benefit with our retail and our consumer products by supplying the people that are going to be spending money as well as us on education and awareness. Therefore -- yes, so that's why you hear Zane and I keep going back to it. It's because of where we are, because of the effort that we put into sourcing because of that supply chain, we understand this going to be such a key channel for us. It gives us the momentum across all 3 channels. So ginger and turmeric just adds to that, as I said, without putting really any other stress onto the system, again, talking to the same people. We're using the same tools and the same awareness, and we're executing to add more revenue to it as well, while obviously taking the opportunity that we have with that point of difference from a supply chain excellence for kava. Look, I think, again, I probably spoke a bit too long on this before on the retail when we had the 3 pieces. But look, the key bit for us is we're managing retail to be profitable, but also be a key tool for us to be growing the market from our consumer side and our D2C and our Amazon. Great opportunity for awareness, great opportunity to broaden that customer space. But it's important, like we've been managing very hard on making sure we've got the right price execution, which has come in again at the end of last year, making sure that we've got the right products coming in to ensure that the funnel is creating more customers and not just focusing on the same customers again and again. I think where we've got that next opportunity there, Fizzies coming into Australia and then U.S. from that whole new space that we've already spoken about. And direct-to-consumer, Amazon, it's now really about getting back to excellence execution. We brought some back in-house from a D2C point of view. Amazon is the beautiful marketplace that it is. We've got some of the best in the business working for us. And Andy Berger, I think many of you have had an opportunity to listen to when he's joined us on some of the webinars. We are just continually to fine-tune that machine and making sure our products are in the right place, right time at the right price to drive to the whole of America overnight. So as I said, the work that's come in the last 12 months across those 3 channels now has a real balance in what we do and gives an opportunity to accelerate on all 3 of them going into this financial year.

I'll jump back in here. As most of you know, we are currently undertaking a renounceable entitlement offer that closes on the 26th of August. Use of proceeds largely around building wholesale, general working capital, U.S. retail expansion. Of course, there's the cost of the offer and the launch of Fizzies, most importantly. All eligible directors are taking up their entitlements and the offer is underwritten currently by Mahi to 500,000. We're looking to raise up to $3.5 million. And certainly, we'll be announcing the progress with this over the next few days. Thank you, Matt. So I guess if we look back, and I'm being mindful of time, we have 2 minutes to an hour. We do love to speak a lot, Matt, and I'll try to -- really looking back at the year that was, it really was moving away from a reliance on Australian-derived revenue, particularly with a strong focus on retail as well as direct-to-consumer to build a business in the United States where we're seeing the strongest demand for kava right now. We've been able to demonstrate that certainly with Amazon USA. But if you consider wholesale, and we spoke to the advantages of moving forward with wholesale, we've just announced a very meaningful distribution agreement around wholesale. And there's no direct selling costs. There's no advertising costs. It is very capital efficient. And the net contribution margin for us gets us to the end zone, so to speak, to break even the quickest and the visibility of that now is a lot more clearer. So whilst revenue may not have increased in a meaningful way, for me, it was a rebalancing on the focus of our next steps in FY '27 and what wholesale means and the USA. particularly means with those next steps. Thank you, Matt. Yes, which basically summarizes exactly what I've just spoken about, the rebalancing of revenue, ensuring that we have a solid foundation from a supply perspective, from a quality framework perspective to meet changing regulatory frameworks, but also to meet evolving legislation. Very soon here in Fiji in the next few months, the Fiji kava bill will be adopted, and there will be enforcement in the country finally. There were discussions and articles in the Fiji Times just last week about fines for noncompliance. So finally, companies like us who've been playing by the rule book since day one get to benefit from these enforcements finally being put in place. I'll end there, but certainly, I appreciate everyone staying on for the full hour. And perhaps we can finish off with a couple of questions, please, Matt.