Fresh from ramping up its earnings targets for FY24, microbiome health company Biome Australia (ASX: BIO) has announced the first retail distribution agreement into the UK and Ireland in an initial phase of a proposed broader push into Europe.
Biome CEO and founder Blair Norfolk, named among the 2023 Australia's Top 100 Young Entrepreneurs, reveals that the company has been ‘quietly’ selling into the UK market for the past two years via a direct engagement program with health practitioners.
However, today Biome has announced formal distribution agreements with UK-based healthfood wholesaler CLF and Ireland-based iiHealthfoods that will see the first of the company’s products shipped to their respective retailer networks from this month.
Norfolk says the push into the UK is the first foray into establishing a foothold in the European market following a rapid increase in brand recognition and sales of Biome products in Australia.
“We have been working on the overseas market quietly for the past two years,” Norfolk tells Business News Australia.
“We first launched into the practitioner channel, which is non-retail and includes doctors, specialists and naturopaths.
“It’s a bit of a niche channel but it’s the most important one for a brand like us because these people are the opinion leaders and they are the ones who will decide what the best product is and who should be taking it.”
Norfolk adds that the practitioner channel was an essential first step to de-risking Biome’s retail push into the UK.
Biome Australia’s range of live probiotics helps prevent and support the management of health concerns, including low mood and sleep, bone health, and more recently cholesterol.
The Melbourne-based company’s lead product range is sold under the Activated Probiotics banner which Norfolk says has ‘really taken off in terms of becoming a household name’.
The rise in consumer take-up of Biome’s products led the company last week to announce a $1 million increase in full-year revenue guidance to $12.5 million for FY24.
This represents a 74 per cent increase on the $7.2 million revenue posted in FY23 and comes on the heels of a better-than-expected December half of $6.01 million.
Today’s announcement sent Biome shares more than 14.5 per cent higher to 27.5c a share, taking the company’s market valuation to $51 million – up 450 per cent over the past year.
Norfolk points out that the full revenue impact of the distribution agreement in the UK and the Republic of Ireland won’t be felt ‘until 12 months down the line’.
“These sales haven’t even been factored in yet so there’s a lot of opportunity ahead for us,” he says.
With Activated Probiotics currently representing about 98 per cent of sales, Norfolk sees several opportunities diversifying into other parts of the probiotic market.
“The blue sky for our business is that probiotics have close to a complete safety profile, unlike medicines, vitamins and minerals, many of which are not safe to take alongside medications.
“We’re not trying to compete with pharmaceutical medication. We think we have a really nice opportunity to synergise and be used alongside 10 or 20 major medication classes, including our most recent product launch Biome Cholesterol, a clinically proven probiotic to reduce cholesterol.”
Biome says its launch into the UK and Ireland will adopt the same approach that has driven the success of Activated Probiotics in the Australian market.
The company says it has assembled an experienced team that will support its growth ambitions in the UK and the broader European market.
“This is a significant achievement and demonstrates our ability to both execute and scale into new international markets,” Norfolk says.
“We are confident that we have the right elements in place for these markets to add material value to the Biome business over coming years.
“These new markets will also strengthen our ability to support new patients, improve their health outcomes, quality of life and make our products accessible to all – that remains our core mission.”
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