Commercialisation of probiotics & commercial trends. Paul Mannion Director of Product innovation Blackmores
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1 Commercialisation of probiotics & commercial trends Paul Mannion Director of Product innovation Blackmores
2 OUR PURPOSE Blackmores improves people s lives by delivering the world s best natural health solutions. We achieve this by translating our unrivalled heritage and knowledge into innovative, quality, branded natural healthcare solutions that work.
3 OUR HISTORY Founded by pioneering naturopath Maurice Blackmore in the 1930s in Queensland Developed a system of healthcare based on naturopathic principles; Celloid Mineral Therapy was the foundation of the business Started one of Australia's first health food stores in Brisbane and first naturopathic colleges and associations in the country His views on natural health, preventive medicine, the environment and recycling were nothing short of radical in the 1930s This belief in the power of nature has a strong influence on the way we operate today Maurice s son Marcus Blackmore is a Blackmores Executive Director
4 OUR BRANDS BLACKMORES BRAND #1 vitamin brand in Australia Most Trusted Brand in SE Asia NATURAL ANIMAL HEALTH Leading natural health products for animals BIOCEUTICALS #1 practitioner brand in Australia ISOWHEY Clinical Nutrition, Sports, Wholefoods & Weight Management FUSION HEALTH AND ORIENTAL BOTANICALS Australia s leading provider of Chinese herbal medicine BLACKMORES INSTITUTE A centre of excellence for natural health research and education
5 PROBIOTICS VALUED AT $147M AND ARE GROWING AT +20.6% VS YA Total Probiotics Segment Scan Sales /02/16 22/05/16 21/08/16 20/11/16 19/02/17 21/05/17 20/08/17 19/11/17 18/02/18 20/05/18 19/08/18 Total Probiotics Segment Scan Sales Linear (Total Probiotics Segment Scan Sales) Source: Aztec Grocery & Pharmacy Scan MAT to 28/08/16
6 EXPORT ACCOUNTS FOR 2/3 rd OF PROBIOTIC SALES IN AUSTRALIA Unit Scan Sales Performance Top Four Brands Brand Total Scan MAT 05/08/18 Domestic Units % Domestic % Export Total Probiotics 6,199,256 2,364,335 38% 62% Life-Space 2,015, ,143 28% 72% Inner Health 1,331, ,227 44% 66% Nature s Way 1,085, ,118 26% 74% Blackmores 490, ,771 44% 56% SOURCE: Aztec Australia Grocery Pharmacy, Total Probiotics, MAT to 05/08/18 Domestic Units and Units Actual
7 FRIDGE-FREE PRODUCTS ARE DRIVING 96% OF THE PROBIOTICS GROWTH Australia Grocery & Pharmacy - Probiotics Value Sales ('000) Shelf-stable Fridge MAT To 01/09/13 MAT To 31/08/14 MAT To 30/08/15 MAT To 28/08/16
8 MOVING OUT OF THE FRIDGE - CHANGING PROBIOTIC SHOPPING PATTERNS
9 OUR STRATEGY AT LAUNCH Formulated based on scientific evidence Each product contains specially selected clinically trialled probiotic strains which have been selected for their robustness, efficacy and potency A prebiotic, vitamins and fibres have also been added to some formulations to complement the probiotics Convenient fridge free range so products can be taken when travelling, stored at a desk or kitchen bench so consumers don t forget to take them A specialised formulation process and packaging technology prevent moisture from harming the good bacteria, helping to keep the good bacteria alive 9
10 A RANGE COVERING THE MAIN BASES A GOOD START Daily Health Kids Daily Health Immune Defence Eczema Relief Bowel Support Womens Flora Balance Helps restore digestive balance and maintain digestive & intestinal health Helps support kid s digestive & immune system health Helps support immune system health & reduce the severity & duration of cold symptoms Helps reduce symptoms associated with mild eczema in infants Assists relieving symptoms of medically diagnosed IBS Promotes and balances vaginal flora With added Inulin L. acidophilus (ATCC ): 7 billion CFU L. paracasei (Lpc-37): 7billion CFU B. lactis (Bi-07): 7 billion CFU B. lactis (Bl-04): 7 billion CFU B. lactis (HN019): 2 billion CFU With added prebiotic, vitamin C & D L. acidophilus (CUL60): 5 billion CFU L. acidophilus (CUL21): 5 billion CFU B. bifidum (CUL20): (125 million CFU B. animalis subsp lactis CUL34 (2.375 billion CFU) With added vitamin C & Zinc B. lactis (BI-04): 2 billion CFU L. acidophilus (CUL60): 6.75 billion CFU L. acidophilus (CUL21): 6.75 billion CFU B. bifidum (CUL20): 225 million CFU B. animalis subsp lactis (CUL34): billion CFU With added prebiotic L rhamnosus GG :20 billion CFU With added FODMAP friendly fibre (beneficial for those with IBS) L. acidophilus (CUL60): billion CFU L. acidophilus (CUL21): billion CFU B. bifidum (CUL20): 312 million CFU B. animalis subsp lactis (CUL34): billion CFU B. lactis (HN019): 2 billion CFU With specific combination of strains based on clinical studies L. rhamnosus GR-1TM: 1.15 billion CFU L. reuteri RC-14TM : 1.15 billion CFU
11 11
12 STABILITY TEMPERATURE VS MOISTURE Materials: Minimise water activity by the selection of dry ingredients and excipients Post fermentation freeze drying of the probiotic concentrates (with inclusion of cryoprotectants) Manufacturing: Pre-conditioning and tempering of the product during the manufacturing process. Active drying of finished product Use of adequate overage to ensure shelf life Packaging: Use of molecular sieves and specialized packaging to protect in- use and over the product shelf life
13 TRIPHASE AND STABILITY MAX PROCESS TriPhase and Stability Max The Ultimate Stability of Probiotics This chart compares typical stability profiles obtained with a high potency probiotic (over 5 billion per capsule) combined with a multivitamin component
14 THE LOW FODMAP DIET HAS REVOLUTIONISED IBS MANAGEMENT
15 LOW FODMAP DIET MAY REDUCE MICROBIOME DIVERSITY OVER TIME
16 CLINICALLY TRIALLED PROBIOTICS AND FODMAP- FRIENDLY FIBRE
17 SUPPORTED BY A MEANINGFUL BUT MEASURED CAMPAIGN ACROSS A NUMBER OF FORMATS $8M campaign will drive awareness of Probiotics+ and the importance of probiotics beyond gut health
18 MESSAGING IN CREATIVE WAS TAILORED ALONG THE CONSUMER JOURNEY TO DELIVER RELEVANT INFORMATION AND CONVERT TO PURCHASE Consumer journey from awareness to purchase Awareness Research Consideration Convert to purchase Predominantly broad range messaging Range + product specific information with proof points Product specific messaging with proof points Strong call to action to encourage purchase TV Online catch up TV Youtube advertising Radio brand ads Digital + social activity + edm PR campaign Magazine advertorials Google search Website content Digital ads Catalogue Education to support pharmacy recommendation POS + displays (off location & shelf) YouTube product ads Magazine advertorials Price promotion Social influencer activity Digital + social activity + edm Offer to online members (online POS + off location displays sales) Catalogue POS + displays (off location & shelf) Price promotion Offer to online members (online sales) Kids Health
19 MULTI CHANNEL SOCIAL MEDIA
20 SOCIAL MEDIA CREATIVE Digital
21 TV CREATIVE
22 PHARMACY IN-STORE EXECUTION CATALOGUES POS SUITE
23 IN-STORE AND ONLINE TRAINING FOR HCP AND PA
24 COMPLEMENTARY MEDICINES AUSTRALIA BEST MARKETING CAMPAIGN 2018
25 INITIAL RESULTS ARE ENCOURAGING /02/ /05/16 21/08/16 20/11/ /02/ /05/ /08/ /11/ /02/ /05/ /08/ Total Probiotics Segment Scan Sales Total Probiotics Blackmores Share of Total Probiotics Linear (Total Probiotics Segment Scan Sales) Source: Aztec, Australia Grocery Pharmacy, Total Probiotics
26 BLACKMORES PROBIOTIC PENETRATION GREW FROM 0.2 TO 1.1 IN 12 MONTHS SINCE LAUNCH Penetration Probiotics by Brand AUS ALL SHOPPERS MAT TO 27/01/2018
27 WHAT WORKED? Burning platform = < 2% share of a growing market = fast decision making Overall product design and positioning has ensured we have satisfied consumer needs around credibility and efficacy. Synergistic marketing campaign activity punched above it s weight Recognition of market shift towards shelf stability
28 COMMODITISATION OR DIFFERENTIATION?
29 THE RISE AND FALL OF KRILL Total Krill Oil Market - $s $35,000, $30,000, $32,000,035 $25,000, $20,000, $15,000, $10,000, $5,000, $7,364,850 $-
30 IS BRAND ENOUGH OF A DIFFERENTIATOR? 30
31 MAYBE NOT
32 COMMODITISATION CAN BE REVERSED Figure 1: (a) The progression of economic value and (b) The regression of economic value Sources: The experience economy by B.Pine and J. Gilmore, 2011; Research and Innovative Technology Administration Bureau of Transportation Statistics, 2012; U.S Centennial of Flight Commission, 2011; The inflation calculator by S. Friedman, 2010
33 PROBIOTICS IN EVERYTHING HEALTHWASHING
34 THE CFU ARMS RACE
35 FORMULATION BASED ON SCIENCE AND STRAINS?
36 IS STABILITY A LIABILITY? but stability testing isn t always undertaken by manufacturers and independent testing has shown some products have far fewer probiotics than they claim. Therapeutic Goods Order No. 78 Standard for Tablets and Capsules
37 GROWING POPULARITY = SCRUTINY & SKEPTICS
38 CREDIBLE RESEARCH CAN MAKE A DIFFERENCE TO THE DEBATE
39 THE RISE OF MEDICAL MICROBIOME MANAGEMENT
40 FOCUS ON CONSUMER HEALTH BENEFITS I have been suffering from a type of eczema known as pompholyx eczema for about two and a half years now. When I would get a flare up, I would get large patches of blisters on the inner part of my feet and smaller patches on my fingers and heels of my palms. It was so painful and itchy at times I would not be able to sleep. For months I struggled using prescribed steroid creams as well as courses of oral steroids with not much relief. It not only caused me physical pain but I was also embarrassed about the way it looked. Being 21 and being ashamed of people looking at your feet because of the sores is not a good feeling. About 2 months ago, I saw advertised the Blackmores Probiotic Eczema Relief and thought I might as well give it a go, and I m so glad I did. After taking two courses of the product my eczema has completely cleared up. My scaring has decreased and new skin is forming where old eczema sites used to be. Normally over summer wold be the worst time to get flare-ups, however, I have only had one minor blister patch come up on a very hot day. I m so happy with this product and have recommended it to some of my friends who also suffer from eczema. The results have been way above my expectations.
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