"Mothers and fathers will put their family first. Even if the budget's tight, if it's something that they really believe can improve the health of their family, it doesn't matter how tight the belt is," says Biome Australia CEO and founder Blair Norfolk.
Melbourne-based company Biome Australia (ASX: BIO) has recorded its best quarter on record for the end of FY23 as unaudited sales of its probiotics, plant-based supplements and sports supplements hit $2 million.
This result represents 75 per cent year-on-year growth for the quarter, alongside $7.23 million in unaudited sales for the financial year as Biome Australia gears up for more product launches in FY24.
The company's founder and CEO Blair Norfolk tells Business News Australia the positive result is due to a combination of strong distribution channels with a presence in more than 3,000 stores, as well as a proactive team of educators who are spending time with pharmacists and practitioners.
"We’ve got significant distribution for a lot more growth left, and that's really the key catalyst - our probiotic range has very little or close to no competitors in the market, and we're a first mover in targeted probiotics," says Norfolk, who was a finalist in last year's Melbourne Young Entrepreneur Awards and featured in the 2023 Australia's Top 100 Young Entrepeneurs list.
"The level of active accounts is increasing significantly this year. Last year it was a lower percentage, and now it’s increasing...the key thing is the average sales in each store is going up."
He explains the company's outreach to doctors, pharmacists, and complementary medicine practitioners involves demonstrating - with the support of research - how probiotics can be effectively dispensed to potentially help a patient with improvements or reduced side effects when taking other drugs.
"At the pharmacist’s or doctor’s discretion, based on our education and support, they may choose to recommend a probiotic alongside other medications, which is a brand new opportunity for them," Norfolk says.
"One of our best selling products is our kids' probiotic, and that has really good clinical data on reducing the rate of upper respiratory tract infections, the severity, the duration, and it works and kids love the taste.
"With products like that we introduce introduces the brand to young families, and then they see our pretty exciting array of products that are backed by clinical trials, such as our Biome Lift to support patients with depressed mood, or Biome Breathe for patients with asthma reducing asthma events by 64 per cent, to name a few.
"If they trust us and they believe our products, which is our goal through our research and our education, we try to make them available and affordable."
When asked about why Biome Australia's results contrast with the slump in broader retail trends, Norfolk puts it down to a great importance in consumers' minds on health.
"Health is always front of mind when we're in poor economic times, either from an investment perspective or a personal perspective with individuals," he says.
"Through COVID When everyone was doing it tough, we had really strong growth as a business.
"Mothers and fathers will put their family first. Even if the budget's tight, if it's something that they really believe can improve the health of their family, it doesn't matter how tight the belt is."
This is all against the backdrop of rising input costs worldwide, but Norfolk says Biome Australia has managed to find alternative ways to maintain margin without passing on costs to consumers.
"We’ve had to work very hard to maintain margin and price point. Shipping went up much as 300 per cent for air freight and 150 per cent for sea freight. We use a combination of things because all our finished goods come from Italy," Norfolk says.
"There’s a significant increase in the cost of paper to make boxes and aluminium foil to make our blister packs, but we worked really hard with our suppliers as our volume grew to get volume discounts and to lock in orders six to 12 months ahead to save on margin.
"So we’ve managed to not have a single price increase in four years on any of our products; if anything, we’ve dropped a couple to try to help people when it counts.
"Even with our costs going up, we've managed to get them back down again through other margin saving activities we’ve done."
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