Nuchev is best known for its Oli6 series of goat infant formula products. It also launched an Oli6 Immunity + full cream milk powder for supporting immune health in teenagers and adults last year.
On the other hand, bWellness specialises in distributing its own branded products, including its bestselling nervous system related products sold under the brands Adrenergy and NeurEnergy, as well as digestive health products marketed under the brands EnteroZYME and EneroMend.
It also distributes European supplement brands, such as Swedish probiotic brand BioGaia. It currently distributes these products in Australia and New Zealand through prescription-only channels, including nutritionists, naturopaths, as well as through certain health stores and pharmacies.
Nuchev announced its acquisition of bWellness, worth AUD$7 million (US$4.69m), on May 20.
Nuchev’s newly appointed CEO Mick Myers told NutraIngredients-Asia that growing the company’s nutrition and complementary medicines business would be key in scaling up and improving Nuchev’s profitability.
“I will say the key priorities for us is integrating bWellness into the Nuchev business. The second key priority is to increase our scale and diversification and improving the profitability of the company.
“And I think we can do that through growing both our nutritionals business and also looking at complementary medicines,” Myers said, when asked his top three goals and priorities after taking the helm of the company. He served as the interim CEO and chief financial officer in Nuchev since November 2023.
About 75 per cent of Australians take supplements for various reasons ranging across strengthening the immunity, for sleep support etc, he said, which comprised a large consumer group not to be overlooked.
“In our analysis, we said that there's probably 75 per cent of people in Australia that take supplements, so there's a large proportion of people in Australia take supplements in their diet, either to aid in health or immunity or sleep and many other factors, and so it's a large consumer group.”
According to Complementary Medicines Australia Industry Audit 2022, the industry grew 1.4 per cent in revenue from the year before to AUD$5.5bn (US$3.7bn). Vitamin and dietary supplements generated the bulk of the revenue followed by sports products and exports.
Aside from the large domestic audience, there is also a sizeable complementary medicines export market which Myers believe Nuchev could leverage on for further growth.
At the moment, bWellness distributes around 200 products, including its own branded products, and Nuchev could look to profit from this business post-acquisition of bWellness.
“Through this acquisition supported by our successful strategic channel partnerships, we are poised to significantly scale and diversify our existing operations and deepen our market penetration, ultimately delivering on our growth strategy.
“bWellness’ product set is strongly aligned with our existing purpose and growth focus – we anticipate a significant revenue increase and improvement in earnings and operating cashflows, as well as the addition of new sales channels and new products to our portfolio in the large and growing complementary medicines sector,” he said.
New markets and new products
The third key priority, Myer said, was to focus on new product development and pursue new markets.
In Australia and New Zealand, Nuchev could tap on bWellness’ distribution capabilities to go into the practitioner-only channels, building on its existing presence in supermarkets.
Outside of Oceania, which forms the cornerstone of the company, China and Vietnam would be its focus when it comes to the overseas markets.
In China, Nuchev is already well-known for its Oli6 series of goat infant, follow-on, and toddler formulas.
In its half-year report, sales of Oli6 in China via cross-border e-commerce (CBEC) was up 157 per cent to AUD$4.4m, while that of its sales in Australia via the retail channel was AUD$2.3m.
“Oli6 is a strong product that we have already…It's the fastest growing goat infant formula product in the market in Australia, it's a good product to continue to grow with.
Oli 6 Immunity + Vitamin A and D, which is only sold in China, has also made good sales to-date since its launch last September, said the firm. This is a product that incorporates bovine-sourced colostrum.
Elsewhere in Vietnam, the emerging middle class, growing disposable income and consume demand are some of the reasons behind the company’s interest in the market.
At the same time, H&S International – which is a shareholder of Nuchev, also enjoys a distribution presence in both China and Vietnam.
Since June 2023, Nuchev has entered into a distribution agreement with H&S Group as the exclusive distributor in China CBEC and Vietnam.
Nuchev’s sales jump in China was also attributed to the distribution capability of H&S.
“The advantage is that through the relationship that we have already established with H&S, we can take products to market quicker that we otherwise wouldn’t have been able to,” he said.
The overseas expansion will tap on Nuchev’s product range, with potential in distributing bWellness’ own branded complementary medicines. Currently, about a quarter of bWellness’ sales comes from distributing its own products.
H&S International is also the owner of fellow Australian herbal supplement firm Brauer, which also owns 50 per cent of bWellness.
As for new product development, Nuchev will be launching a new product closely related to its existing Oli6 Immunity + full cream milk powder.
Nuchev and bWellness
Myers pointed out that both bWellness and Nuchev share similar consumer profiles – young parents buying nutrition products for their kids.
“Consumers that buy our products are the consumers that buy bWellness' products because those consumers are parents, young adults, seniors, and they are all buying products for their families.”
More importantly, he said that both Nuchev and bWellness were aligned in providing science-backed and clinically tested health and wellness products.
There is also the possibility of distributing Nuchev’s products into the practitioner-only channels that bWellness is already present in, he added.
