VAPOR VOICE – Issue 6, 2016
By: Don Fenton
Gilla has become a global vapor brand thanks to its innovative products
and some serious marketing.
New markets continue to open doors for entrepreneurs in the vapor business around the world. Successful marketing to the growing middle-class global consumer segment is not only possible, it makes good business sense. For about two decades now there has been a gradual decline of economic protectionism by nations, increased integration and free trade, leading to global competition for customers and an increasingly networked global marketplace. Global marketing is increasingly influenced by an increasingly borderless economic world.
GLOBAL CONSUMERS, BORDERLESS WORLD
International firms employ people in different countries and have administrative, marketing and manufacturing operations around the world. Their brands are also marketed in multiple countries. According to a recent article in The Economist, some 3 billion businesses, institutions, agencies and households worldwide have internet access and use the technology as a tool for exchanging goods, services and information on a global scale. Marketers recognize that the networked global marketplace offers unprecedented access to prospective buyers on every continent. Companies have successfully capitalized on this and manage multiple country and language websites to customize content and communicate with consumers in their native tongues.
Business partners Graham Simmonds and Ashish Kapoor of Gilla are quietly building a global vapor business that now crosses 30 borders. The company takes advantage of both the global consumer and the networked global marketplace with a sales team that services the United States, Canada, Europe and beyond. The business model they employ comes from international brands like Diageo, the global leader in beverage alcohol.
The Gilla strategy is designed to meet the growth in demand for standard and premium e-liquids around the world with a multilingual sales team that works with retailers and distributors and provides everything they need, including marketing support. Gilla works within the regulatory framework of each country, whether that be the EU, the U.S. or elsewhere, and delivers a diversified brand portfolio across categories and price points with an international geographic reach. Consumer tastes have seen certain brands become favorites in a variety of countries. The Gilla team supports customer service, logistics and a proven supply chain management platform.
They are involved in the everyday transactional, logistical and facilitation functions of the business, including:
• Buying: purchasing products for resale or as an agent for supply
• Selling: contacting potential customers, promoting brands and seeking orders
• Risk taking: assuming business risks in the ownership of inventory
• Assorting: creating brand assortments to meet local tastes
• Storing: assembling and protecting product lines at a convenient location
• Sorting: purchasing in large quantities and supplying smaller assortments for customers
• Transporting: physically moving e-liquid shipments to customers
• Financing: extending credit
• Grading: inspecting, testing and quality-grading all brands and lines
• Market information and research: providing information including competitive conditions and trends
Gilla maintains an efficient supply and procurement chain through a 10,000-square-foot manufacturing facility in Florida, USA, with an in-house capacity of 30,000 bottles of e-liquid a day. Gilla also has co-pack manufacturing partners in the U.K. and Hungary. As a rare publicly traded firm in the vapor business, it offers partnership and ownership options. In just a few years, the partners have built an award-winning vapor business
with a global footprint that spans several continents. They market in multiple foreign countries, in the local language, in a way that reflects the unique culture of each country.
Gilla is now eyeing a unique opportunity to grow the business in Canada as that country moves toward becoming the first G-7 member nation to legalize recreational marijuana. According to Bloomberg’s Jen Skerritt, the value of marijuana stocks listed in Canada has surged to nearly $4 billion in two years as investors pile on. Canada plans to introduce legislation in 2017, joining eight U.S. states where it isn’t a crime to use the drug recreationally.
“Gilla’s expertise in manufacturing and distributing regulated products across jurisdictions positions it well to enter the cannabis space,” said Kapoor, chief financial officer of Gilla.
“The high gross margins in the industry allow us to profitably implement unique strategies suitable for specific jurisdictional regulations.” Research made public by Deloitte, the industry-leading auditor, says there could be some 3.8 million recreational marijuana users in Canada by 2021 and estimates that a legalized national market could create a $22.6 billion industry. Gilla recently announced that it has entered the cannabis industry with the introduction of a new brand of e-liquids featuring cannabidiol (CBD).
CBD is a nonpsychoactive cannabinoid that produces strong medicinal and therapeutic effects for numerous common conditions. At present, CBD produced from industrial hemp is legal to purchase and consume throughout the United States and many international markets.
Gilla intends to produce its initial CBD e-liquids with ingredients derived from industrial hemp to gain access to numerous global markets, leveraging its existing international
sales and distribution platform.
Gilla intends to collaborate with licensed medical marijuana producers and clinics to develop new e-liquid products that will sell through licensed channels in jurisdictions
where medical or recreational marijuana has been legalized. Its new brand of CBD e-liquid products will be marketed under the brand “Enriched.”
“As education and research have demonstrated, there are many significant medicinal and therapeutic benefits derived from cannabis, and Gilla has been working on developing products for this fast-growing market since earlier this year,” said Simmonds, chairman and CEO of Gilla. “Given these products can be effectively delivered through vaping systems, it was an easy decision for Gilla to develop new products for this market and to begin looking at furthering opportunities to collaborate with or potentially
acquire licensed producers and dispensaries within the cannabis industry.”
- On 5th January 2017