ECS Botanics Scores Lucrative Distribution Deal with Woolworths

ECS Hemp Oil will soon be sold in Australian supermarkets after the company secured distribution to 850 Woolworths stores.

The Australian agribusiness and hemp food grower, ECS Botanics Holdings Ltd (ASX: ECS), made a huge announcement this week after it revealed that its distribution partner, Just Foods Australia Pty Ltd, had secured an agreement that will see its Hemp Oil range sold in 850 Woolworths stores.

This was great news for shareholders, as the deal will see ECS products stocked in over 80% of Woolworths stores nationwide, allowing the company to easily expand its market share in the rapidly expanding hemp food sector.

And investors have already responded accordingly, after stock in ECS Botanics spiked in value today, climbing by 41.46% to 0.58 a share.

"This is a very large step in our commercial strategy and shows the strength of our new distribution partner JFA, who has delivered very early on in the relationship." ECS Botanics Managing Director, Alex Keach

Aside from building brand recognition and consumer awareness, the deal also comes at a perfect time for ECS, as Woolworths recently announced that it is currently refocusing its market strategy to work more closely with local Australian farmers.

As a result, ECS is now position to leverage Woolworths increased focus on the domestic market to potentially forge an even closer relationship with the supermarket giant.

Although the news wasn't all good, as ECS Botanics' management have advised that total revenue generated from the deal is still uncertain at this time, due to the lack of guaranteed minimum volumes.

However, the company did state they will provide further clarification on sales traction and expected revenue as relevant information becomes available.

The Managing Director of ECS Botanics, Alex Keach, explained that the company expects to, "update the market regarding the wider distribution of ECS products as retailer range reviews are completed and JFA meets with further retail groups."

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The company has also confirmed that it expects to commence shipping on the first order of ECS Botanics 250ml Hemp Oil intended for Woolworths stores by 13 January 2020.

Earlier this year the company made headlines when it locked down an exclusive memorandum of understanding with the American-based company Disruption Labs—which also owns CBD producer Reset Bioscience—that will see its range of hemp-derived CBD dietary supplements imported from the US.

At the time ECS Botanic's Managing Director Alex Keach described the deal as being, "an exciting initiative for ECS."

"With its nanotechnology formulation, we view Reset's hemp-derived CBD product as unique in a marketplace that is rapidly growing and highly attractive," Keach said.

Disclaimer: Past performance is not an indicator of future performance.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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