Australian microbiome health company all set for booming growth in Asia with Organics and Precision Probiotics
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Special Report: Nutrition manufacturer Activated Nutrients (AN) has made some early waves in the lucrative market for health supplements.
The company has taken a pharmacy-focused approach to distribution for its organic line of plant-based supplements, building trusted relationships based on a shared understanding of each product’s benefits.
As a result of that extra groundwork, AN has signed up over 1,000 pharmacists and monthly sales are now growing rapidly. May marked a new record high for the company, with gross revenue of $128,000.
Now, founder Blair Norfolk is focused on the next big opportunity; to capitalise on the huge potential growth in the Asia-Pacific region for market-leading probiotic products.
Having raised $3m from sophisticated investors, the company is now accepting capital via a crowd-sourced funding raise on the Birchal platform.
With the offer currently live, company founder Norfolk and new CEO Michael Oredsson spoke with Stockhead about the next phase of growth.
For most consumers, probiotics are seen as live micro-organism products that help aid digestive health.
However, with a best-practice approach there’s a lot more they can do. AN’s probiotic range is designed to treat specific ailments including asthma, mental health and osteoporosis.
And the products AN is introducing to market are the result of pharmaceutical-grade clinical trials, by clinicians in Italy and Sweden.
Norfolk said it’s a welcome change for pharmacies, who increasingly want to stock products that have “clinical evidence with real people, which they can recommend as a practitioner”.
As an example, the company’s osteoporosis treatment is based on a double-blind, placebo-controlled 12-month clincial trial in Sweden for 249 women, where probiotic consumption showed a 78 per cent reduction in bone loss.
Importantly, AN has has spent more than a year negotiating exclusivity in Australia for each product in this patented range.
Ahead of a launch next month, Norfolk said the company now has “unique products that no one can replicate, with genuine intellectual property to build a big business from”. Being first mover is critical, however making sure no competitors can follow will enable fast and effective growth.
With the release of its specialist probiotics range, Norfolk said the company is well positioned to take advantage of a key strategic shift in Australia’s pharmacy industry.
To compete with low-cost players, the company’s pharmacy network — including big names such as Terry White, ChemMart and Amcal — are moving aggressively towards premium products with a professional services offering.
In such a commercial environment, clinical-grade probiotics are the ideal complement for pharmacies to engage their customers and explain the product benefits.
Norfolk said an important point for investors to note is that AN now has a pharmacy network of 1,100 stores signed up, but its record May sales growth was achieved with just 280 partners stocking the product.
“We’re about to see the full 1,100 stores go live, so the company’s value over the next six months will go up significantly with deals that have already been de-risked and signed off.”
AN’s pharmacy network will act as “gatekeepers”, engaging and educating consumers on the probiotic range — all of which are packaged in aluminium blisters to enhance stability and shelf-life.
“It’s a great opportunity to come to market with better research and condition-specific products focused on quality,” Norfolk said.
While getting first-mover advantage in Australia, AN is also building distribution channels to eventually take advantage of the Chinese and South-East Asian markets — both of which have huge potential in probiotics.
New CEO Michael Oredsson highlighted a recent visit at the Health More annual conference, where “Made in Australia” was reaffirmed as the top branding them among Chinese consumers.
Oredsson’s joins the company with extensive industry experience including 6 years as CEO of Probi — a publicly-listed company in Sweden which is now the fifth biggest probiotics maker in the world.
He said the Asian market will be an “important part of the growth strategy through to 2021”.
“And it’s not just China – for example we’re in talks with the top pharmacy distributors in South Korea.”
“China’s upper-middle class is around 180m people, but the rest of south-east Asia combined is also 180m — so the opportunity is equally great but often with simpler regulatory hurdles.”
Norfolk said the company has already obtained an export license and verbal commitments to expand to different Asian regions at the appropriate time.
For Oredsson, joining Activited Nutrients provides an opportunity to leverage his experience for optimal strategy execution.
“Probiotic remedies are on the up all over the world, but Asia-Pacific has the best growth prospects,” he said.
“But I don’t think anyone has executed properly yet. We’ve got a great opportunity to launch a unique range of products, with the requisite skills in the business to do those products justice.”