Immunity demands drive up BioGaia Q3 profits by 158%, preventative care shift “next”
21 Oct 2021 --- Increased consumer demand for immunity products ahead of the winter season is a key driver behind BioGaia’s growth, according to the Sweden-based company. It has announced a 32% increase in net sales for the third quarter, reaching SEK 173.8 million (US$20.2 million), excluding foreign exchange effects.
According to BioGaia, profit after tax amounted to SEK 52.8 million (US$6.1 million), an increase of 158%, which exceeded its market expectations. Beyond demand for immunity products, there were two more external reasons spurning this growth, the company says.
“The lifting of pandemic restrictions led to a rise in visits to doctors and pharmacies. Also, several markets, particularly in EMEA, have needed to replenish their inventories and requested that deliveries be moved forward from the fourth to the third quarter,” Isabelle Ducellier, president and CEO of BioGaia notes.
Preventive healthcare is predicted to be the next big trend post-pandemic
Shifting trends post-pandemic
Though the pandemic has had a clear impact on the company’s operations, Ducellier says that trends post-pandemic will shift toward preventative healthcare.
Nonetheless, trends after COVID-19 are slated to shift, she notes, as she outlines the company is ready to take on the changes.
“As the market for probiotics is growing worldwide, in terms of both sales and consumer awareness, life after the pandemic will lead to a greater focus on preventive healthcare. Based on these trends, together with our focus on global brand building and our omni-channel strategy, I remain convinced of our ability to grow.”
Direct to market expansion
The company is set to launch BioGaia UK next month in a bid to have direct access with British consumers, where products will be available on the company’s e-commerce platform and Amazon UK from mid-November.
“We will thereafter gradually establish BioGaia in other parts of the UK market,” Ducellier notes.
The move to the UK is the third “direct market” the company is establishing, following BioGaia Japan in 2006 and BioGaia Finland earlier this year.
Earlier this year, Ducellier told NutritionInsight that reaching out directly to consumers through an online presence was important to the company after it announced it was digitalizing its business model to adapt to consumers’ online presence.
The market for probiotics is growing worldwide, according to BioGaia.
Global growth
North America is noted as the strongest growth market due to the launch of new products Immune Boost and Prodentis Kids, Ducellier notes, as well as the “omni-channel strategy whereby BioGaia is available in all consumer channels and through recommendations from the healthcare sector.”
Latin America noted a drop in sales for the quarter primarily due to the accrual of orders in Brazil, though EMEA had a sales growth of 51% compared with the year-earlier period. This has been linked to the “back to school” campaigns in Italy, Spain and Germany.
Meanwhile, APAC had a sales growth of 53% compared with the year-earlier period, which noted positive demographic trends in Indonesia and Vietnam. According to Ducellier, progress across APAC is also due in part to online ventures in China, sales to dental surgeries and an e-commerce platform in Japan.
Net sales in pediatrics reached SEK 130.8 million (US$15.2 million), while the adult health segment amounted to SEK 42.1 million (US$4.9 million).
These results follow a busy period for the company. In January, it launched its complete adult health portfolio in Sweden for mouth and bone health.
Earlier this year, BioGaia announced it owned 100% of MetaboGen shares, up from its 92% holdings, while it also launched a probiotic combo aimed at helping children recover faster from upper respiratory infections. It also gave Minapharm Pharmaceuticals exclusive rights to sell its Protectis drops in Egypt.
The company had a US$25 million investment from Cargill in 2020, in a partnership aimed toward digestive and immune health.
Edited by Andria Kades
