The Calmer Co hits ‘right place, right time’ moment as kava demand leaps

• Kava’s rising popularity and strengthened regulations is boosting Calmer Co’s prospects
• Company delivered strongest result in its history in the September quarter
• Kava demand across company’s key markets set to grow at a CAGR of ~14%, reaching ~US$5.6 billion by 2033

The Calmer Co’s founder and CEO Zane Yoshida reckons it is a case of at the “right place at the right time” for the natural wellness and beverage company with demand for kava growing, particularly among younger generations, and greater regulation.

The Calmer Co International (ASX:CCO) delivered the strongest result in the company’s history in the September quarter with cash receipts from customers of $2.1 million, up 6% QoQ and quarterly revenue of $2.4 million, up 26%.

However, the West’s relationship with kava – which has been a ceremonial and cultural drink for generations – has been anything but straightforward.

Several Western nations, including Germany and Australia moved to ban or restrict kava in the early 2000s after reports of liver toxicity, sparking one of the most contentious regulatory debates in the supplement industry.

“It was prescription medicine in Germany for 30-odd years, and it was estimated that in 2002 Kava medicines captured 10% market share of benzodiazepines,” Yoshida said.

“The market in Europe fractured and supply chains out of the Pacific died as a result of the ban in Germany.”

Under pressure from South Pacific governments Yoshida said the World Health Organization (WHO) in 2006 stepped in to investigate correlations between the claims and released a report on kava and hepatoxicity.

The WHO came back with various recommendations, while CCO had started its own R&D at the University of the South Pacific.

Ensuring the safety of kava

Kava comes from the Piper methysticum plant, native to the Pacific, with Fiji and Vanuatu remaining the largest producers.

Islanders have prepared it for hundreds of years by grinding the root, mixing it with cold water, and serving the thick brew to guests and dignitaries.

“The WHO’s recommendations were very simple that we should be using traditional drinking varieties of Kava called noble varieties,” Yoshida said.

“They also recommended we use the roots and stump of the plant and no aerial parts along with using water.

“We’ve always had an aqueous extract we produce in Fiji from a green or fresh kava, traceable and transparent supply chain.”

CCO works with farmers across 10 provinces and has recently expanded its sourcing capability to include Papua New Guinea, The Solomon Islands and is about to engage with exporters out of Vanuatu.

“This ties in well with the Codex regional standard for kava put in place by the WHO and Food and Agriculture Organization (FAO),” Yoshida said.

Standards were also endorsed by Quad member countries. Germany ultimately lifted the ban in 2014, allowing kava-containing medicines to return under stricter safety conditions.

In 2022, the regulations in Australia allowed kava powders regulated as a food to be sold as part of efforts to strengthen ties with Pacific nations. Kava can now be imported and sold across Australia (except in the NT).

In 2025 to further push standards forward, the Pacific heads of government through the Pacific Islands Forum Secretariat (PIFS) founded the Regional Kava Development Strategy.

“They are working collectively across all kava growing nations in the South Pacific to harmonise the growing, processing and subsequent export of kava to meet food safety standards as a minimum complying with Codex,” Yoshida said.

“Standards Australia has also come in to support the structure around the Pacific heads of government tying back to food safety.”

Strong foundation for scale

Yoshida said with greater regulation and scientific knowledge about kava, the industry now had a solid foundation for growth.

“The harmonisation of standards for growing, processing and subsequent export to meet food safety standards has finally given structure in the South Pacific, for the kava industry,” he said.

“Vanuatu now has a Kava Act, the Fijian government is putting in place a Fiji Kava Bill to establish a council to regulate the industry.”

The American Herbal Pharmacopoeia has also published a monograph and therapeutic compendium for kava rhizome and root (Piper methysticum G. Forst).

According to Yoshida, the new publication addresses common misconceptions about kava, outlines safety considerations, and provides detailed guidance on its use.

Drawing on clinical and preclinical studies, meta-analyses, and systematic reviews, kava is reported to be “one of the safest and most effective” botanicals for supporting mood and stress.

“Without regulation, historically it was a bit like the wild west, but greater regulation provides a structure and framework for international standards and compliance,” Yoshida said.

CCO’s upgraded processing facility in Fiji has capacity to produce 25 tonnes of fresh Kava weekly and is an Australia Food Safety registered facility.

It is also a US Food and Drug Administration (FDA) registered and audited facility for the compliance of dietary supplements.

Four pillars for growth

CCO has four strategic pillars to support growth with the first being its regional sourcing, manufacturing excellence and innovation capability.

“That supports our other strategic pillars which are the revenue generating engines,” Yoshida said.

“The second pillar is direct-to-consumer, including Amazon sales, the third is scalable, profitable retail which include our relationships with Coles and Woolworths.”

The company’s fourth revenue-generating pillar revolves around a wholesale, bulk ingredients channel.

For several years CCO has supplied a standardised water extract to global ingredient distributor and formulation specialist IMCD.

The extract is standardised to 10% kavalactones – the active compounds – and then on sold to nutraceutical companies.

“Historically, we were only permitted to sell a water extract in Australia to produce tablet and capsule formats regulated by the Therapeutic Goods Administration (TGA),” Yoshida said.

Using supercritical CO₂ extraction technology, The Calmer Co were able to achieve a higher potency of 30% kavalactones. Its distributor, IMCD is delivering the higher potency to its customers in the US, where it is permitted.

“In Australia we’re still very limited with what we can do and the Kava powders and unflavoured shots we sell here are regulated as food, whereas our capsule and tablet format are regulated as a complementary medicine,” Yoshida said.

“The powders and unflavoured Kava shots have oversight from Foods Standards Australia New Zealand, and the capsule and tablets are regulated by the TGA.

“We’re working with the Australian Government to relax and harmonise the regulation and classification of Kava in the Australian market the same way as in the US.”

‘Right place at the right time’

For all its historical controversy, Yoshida said western markets and particularly younger generations were starting to realise the benefits of Kava as they looked for products to replace alcohol, reduce anxiety and improve sleep.

CCO has been adding new products it can sell in the US to support growing demand, including flavoured Kava shots and concentrated formats on Amazon USA.

Yoshida said independent market research projects kava demand across its key markets of New Zealand, Australia, the US and regional Pacific trade to grow at a compound annual rate of ~14%, reaching ~US$5.6 billion by 2033.

“The US is a big focus of our business given the flexibility of what we can do there and its growing demand,” he said.

“Studies show 10.7% of Americans have tried Kava in the past year more than once,” he said.

The company has made some key leadership changes and moved to a new e-commerce platform Acuity as it adopts an omnichannel approach to growth and sales.

Amazon has become a major growth engine for CCO, with US sales up triple digits and repeat customers rising.

The company recently appointed James Tonkin as chairman, a 48-year veteran of the food and beverage industry widely known as “the beverage guru” as the company pushes ahead with its US growth strategy.

The company has also brought back its Taki Mai brand, the original brand started by Yoshida more than a decade ago.

“We have grown Taki Mai very quickly to ~40% of revenue and Fiji Kava at ~60%,” he said.

“It’s important to recognise the rising demand for kava, now we are meeting demand versus creating demand and are at the right place at the right time.”

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

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