Did you know that Euromonitor International, the research group, reported that U.S. sales of chocolate went from $14.2 billion in 2007 to $18.9 billion in 2017? This rate of growth astonished us. If the industry is growing at this pace, then chocolate manufacturers and marketers should be doing great in the market. With this rationale in mind, we researched the market looking for hidden gems. It helped us find our next pick, Affinity Beverage Group Inc. (OTCMKTS:ABVG).Read the following carefully. The stock volume of Affinity Beverage Group Inc. (OTCMKTS:ABVG) recently fired all the alarms. The company has gone from moving less than one billion shares a day to more than 3 billion shares a day. An enormous amount of people should be interested in this company to move that volume. Corporate Image from Affinity - Astika Holdings Inc OTCMKTS:ASKHWhat's going on? There is not only one factor. The most recent is the acquisition of Artisanal Edge, LLC, which sells dairy-free frozen desserts in more than 250 locations in the US. But, that's not the only good development. ASKH has been signing interesting agreements with other parties for some time. The market seems to be reacting now, while it could have done it months ago. We will tell everything that matters in this name. But first, check the recent share price action:
5 years chart for ABVGBusiness ProfileAffinity Beverage Group, Inc. is a holding company that focuses on branded consumer product acquisition opportunities in the $3.4 trillion health and wellness industry. The company targets lifestyle brands, companies, and/or distribution rights focusing on traditional and non-traditional, healthy beverage options.The following are subsidiaries of ABVG:- Village Tea Company Distribution, Inc.: it markets teas packaged in a variety of creative and earth-friendly ways for wholesale and retail sales. Its products are sold online as well as on major retailers in North America. Our research showed that its teas are highly ranked by Amazon customers: Opinion about Village Teas - Affinity Beverage Group Inc OTCMKTS:ABVG- Undone Chocolate, LLC: it sells premium 100% organic, certified vegan chocolate bars, cacao tea, and drinking chocolate. The cacao and other ingredients used in the product are 100% Organic, Vegan, Gluten Free, Soy Free and directly sourced (3x Fair Trade) and handcrafted from scratch (bean to bar) with no added fats or emulsifier.The company is expanding its networkAffinity Beverage Group, Inc. seems to have built popular brands and products. In our opinion, it has already passed the new product development stage and is now heavily enhancing its commercialization networks. This is a critical stage that will determine the revenues of the future years. From a financier's point of view, it is this point when ABVG is a real pick. As per our experience, if the company becomes largely well-known and its stock price rises, the opportunity will be gone.So, what's the company doing to enhance its sales?First of all, Village Tea is trying to be very active on the Internet. In October, it relaunched the company's e-commerce platform and offered to take 25% off of its entire purchase of Village Tea Company products till the end of October. On the top of it, Amazon was also revealed as a revolutionary platform for ABVG. The company, thanks to its logistics partner CRC Global Solutions, is able to process orders and deliver products to customers all over the world in a timely and efficient manner. The company was not only receiving orders through Amazon, but it was very optimistic about the future performance of this online channel:"This relationship will also allow us to be much more aggressive with building our business with Amazon as well, which is a platform that has an unlimited amount of sales potential for our products", stated Janon Costley CEO, Village Tea Company Distribution, Inc.There is more.The company also launched a new food service and hospitality platform in EAT Food Market at the campus of Northern Arizona University (NAU) located in Flagstaff, Arizona. The most significant is not that 25,000 students are expected to attend NAU, but ABVG was able to co-work with Sodexo. It seems like a great opportunity now that this multimillion-dollar business has decided to partner with natural food startups:
"Food service has become an increasingly important channel for natural food startups, which Velez says companies like Sodexo view “as the future.” Sodexo in 2014 said it would purchase $1 billion in products and services over three years from small- and medium-sized enterprises; its other small partners include Paleo baked goods company Base Culture, Village Tea Company, and Gavina Coffee Company." Source: Fortune.com
Finally, it is also worth mentioning that ABVG has been approved vendor of the "largest televised home shopping company in the world." The name of the TV was not noted. However, ABVG said that it will be featured in an upcoming segment on the network which will be presented by an on-air network personality and Company Founder/President Martin Ekechukwu." More information about this event is to be released. The event could push up the share price. So, we will need to be ready to regurgitate the new info. Is the company adding personnel?That's a sharp question. Companies that are currently growing usually do it, as they hire new talent. It is a key indicator to check and it is the case of ABVG. The most recent person added was Don Jones, a retail industry veteran. He brings 40+ years of retail and consumer products experience with brands like GAP, Target Corporation, and Ikea. He will be in charge of re-launching the Village Tea Company direct to consumer platform. In our opinion, he is very well prepared to help the company and has come at the right time.The most critical - the acquisition of Artisanal Edge, LLCOn February 15, 2018, the market got to know the agreement to acquire Artisanal Edge, LLC. This is the most significant information recently released. It is, in our opinion, what's triggering the stock volume. The fact that the frozen desserts of Artisanal Edge are sold in over 250 locations in the Northeastern United States is key. But, there is another factor, which we consider even more critical. Jawea, the brand to be acquired, belongs to the specialty frozen deserts category, which is growing at a large pace. It is the "#3 fastest growing category in the specialty food segment and is the most purchased category in the segment according to the Specialty Food Association." We believe that the acquisition is smart and could reinforce the growth of ABVG. Let's see if the transaction can close. Undoubtedly, it is the most serious catalyst for this name.ConclusionCurrently trading with a market cap of $0.9 million, ABVG is an exciting story among small caps. The only caveat that we see in this name is that the financial statements are not up to date. Market participants are buying this stock a little blind. It makes the risk a little higher.To sum up, check the news; it is what's driving the stock price of ABVG!We will be updating our subscribers as soon as we know more. For the latest updates on ABVG, sign up below!Disclosure: We have no position in ABVG and have not been compensated for this article.Image courtesy of Chris Bentley via Flickr
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