The ASX-listed company earlier on announced that its supplement brands ‘Wakey Wakey’ and ‘The Iron Company’ were stocked in Chemist Warehouse – Australia’s largest pharmacy retail chain.
In addition, products from the two brands are available in national supermarket chains such as Coles, Woolworths, as well as Terry White Chemmart, Australian Pharmaceutical Industries (API), and Symbion.
This is considered no small achievement given that the two brands are new to the market.
Previously known as Wattle Health and specialising in infant formula, the company rebranded itself and began trading as Wellnex Life in July last year. The intention is for the company to diversify its portfolio instead of only focusing on infant formula.
About two months ago, Wellnex Life launched ‘Wakey Wakey’ – a range of caffeine gummies and effervescent. Containing caffeine and guarana, the products claim to boost energy levels, increase concentration, focus, and alertness.
'The Iron Company', on the other hand, consists of two gummy SKUs containing slow-release iron. The products are said to be gentler on the stomach.
CEO George Karafotias believes that innovative products and high profit margins are what sets the company apart from its competitors.
The aim is to get product listing in major retailers, such as Chemist Warehouse, Coles, Woolworths, and API – which covers the majority of the nutraceutical retail network in Australia.
“The retailers are hungry for new products. Brands need to offer innovation and high profit margin to excite the retailers,” Karafotias told NutraIngredients-Asia.
“When you offer yet another vitamin C pill when the shelves are already stocked with plenty of vitamin C pills, brands start to offer deep discounts to get consumers to buy their products and this kills profit margin.
“We can offer a higher margin by introducing new, innovative products,” he pointed out.
In last July, the company, which also runs a pharmaceutical business, signed a JV with Chemist Warehouse and formed a new brand “Wagner Liquigesic” – in which Australia’s first paracetamol liquid soft gel was launched.
Under the partnership, Wellnex is responsible for the development, registration, and commercialisation of products, while Chemist Warehouse is responsible for distribution and marketing.
“We developed Australia’s first liquid soft gel paracetamol brand and took it to Chemist Warehouse. They liked it so much that they started on a joint venture with us.
“We want to continue creating new formats for existing products,” he said, adding that gummies and effervescent tablets were some of the formats that it planned to expand on.
In fact, one of the company’s executive director and chief strategy officer is Zlato (Zach) Bozinovski, who co-founded Melbourne-based effervescent vitamin tablet brand VOOST - which is now a part of Procter & Gamble.
“We are developing vitamins into gummies because there is a much higher margin. Gummies are exciting to the consumers. They are easy to take and unlike pills and tablets, it does not require the drinking of water.”
With innovation and high profit margin at the heart of the company’s new product development, this is also why he is “almost certain” that the firm's new products would be stocked in the big retail chains.
Seven key categories
As a whole, the company focuses on seven categories, namely vitamins and supplements, cannabidiol (CBD) medicinal products, hydration, nutrition – including infant formula, protein powder, products for pain and relief, cosmetics, and skincare.
“We have over 15 brands, generating a revenue of between AUD$21m (US$14.3m) and AUD$22m (US$15.4m) with a growth rate of 30 to 40 per cent yoy,” Karafotias said.
The company has acquired Brand Solution Australia to assist its brand marketing efforts.
He also noticed that there has been a growing appetite to natural and organic products and aims to double the company’s revenue to AUD$40m (US$28.1m) to AUD$50m (US$35.1m) this year.
Why not only IF?
A highly competitive infant formula market and the current pandemic have led the company to rethink its business strategies.
Previously operating as Wattle Health, the company originally aimed to expand to the China market, following the acquisition of a controlling stake in Blend & Pack.
However, the company later on also noticed that local Chinese infant formula brands are quickly gaining support from Chinese consumers, making it more competitive for the foreign brands.
The situation was made worse by COVID-19, when the daigou market – which almost single-handedly pushed sales of Australia-made infant formula to a record high, had tumbled overnight due to the pandemic.
“We think that the infant formula industry will be challenging for a long time and so we thought we needed more brands and not just infant formulas,” Karafotias said.
Aside profiting from its own brands, the company also receives revenues by licensing its formulations to other brands and also provides contract manufacturing services to other brands.
For the time being, it will solely focus on the domestic Australian market.
“There are so many opportunities in the domestic market. We feel that we are just scratching the surface of the market at the moment,” he said.