BioGaia ramps up global presence amid “major” US success
28 Mar 2022 --- BioGaia’s annual sales reached SEK 785 million (US$82.98 million) in 2021, marking a 5% sales growth, according to the Sweden-based probiotics company’s annual report.
Operating profit amounted to SEK 253.7 million (US$26.7 million), an increase of 11%, the report adds.
“The US accounted for the most outstanding development, where several successful launches of new products together with our omnichannel strategy yielded another record year. The US is now BioGaia’s largest market,” says Isabelle Ducellier, CEO of BioGaia
Though Europe faces continued “sluggish” sales, this was offset by strong performance in other parts of the world, she adds.
“In Asia, sales increased in part due to our online ventures in China, our own e-commerce platform in Japan, as well as advantageous demographic trends in Indonesia and Vietnam.”
The company notes research is core for long-term profitability.
Driving growth
Currently, the pediatrics segment accounts for nearly 80% of BioGaia’s total sales, the report outlines. The company aims to launch products specifically for mothers’ health, as well as creating a broader portfolio in child health using new probiotic strains that enable BioGaia to target novelindications.
Sales in the Adult Health segment amounted to SEK 176.9 million (US$18.62 million), an increase of 10%.
In 2021, the company launched 37 new products and published 236 articles, with 13% of net sales going to R&D. Meanwhile, the COVID-19 pandemic not only accelerated interest in strengthening the immune system but also played a role in changing consumer behavior.
“E-commerce has grown, and a broader target group is now opting to search for information and shop online. Food and health products are goods that have noted a clear upturn in e-commerce,” highlights the company.
BioGaia also observes a growing interest in health as a result of the aging population. “The physical and mental health of a growing number of people are being impacted by stress, sedentarism and poor diet.”
“Concurrently, a rising number of consumers are taking greater responsibility for their health by seeking information about healthy diets and preventive healthcare. The interest in health products and food supplements is therefore expected to continue to rise sharply.”
Eying key markets
As part of the company’s broader strategy, BioGaia has also increased its presence in the US, Japan, China, Brazil, France, Italy and the UK.
“Important steps were taken during the year to become even more accessible in highly attractive probiotics markets by establishing our own companies and taking control of distribution in Finland and the UK, and by acquiring the American distribution partner Everidis.”
BioGaia reports a 32% operating margin.
The development in Finland means BioGaia operates under its own brand, capitalizing on the market that has one of the highest per capita use of probiotics globally.
In France, BioGaia is focusing on developing its Adult Health portfolio while Italy has seen the increased establishment of e-commerce.
In November 2021, BioGaia began selling its probiotic products under its own management in the UK market, described as having consumers with an “excellent knowledge” of probiotics.
“The UK is a medium-size market for probiotic products. However, together with the broader market, which includes food supplements and vitamins, the estimated market value is about GBP 1.5 billion (US$ 1.98 billion).
Safeguarding production
During 2021, the company continued ongoing efforts to streamline operations and experienced strong growth and increased sales without the need to employ more staff, it adds.
“The year has been full of various challenges due to the pandemic. We successfully maintained production levels and deliveries according to plan without any delays to customers,” says Peter Persson, managing director BioGaia Production.
“Our operations are particularly vulnerable as they require people to be on-site or production would cease. It requires everyone to roll up their sleeves and help out when unforeseen events occur.”
By Andria Kades
