Orkla Health explores consumer subscription models with US$371M NutraQ acquisition
25 Feb 2021 --- Norway-based consumer goods supplier Orkla Health is embracing a “new business approach” with its anticipated NOK 3.1 billion (US$371 million) acquisition of NutraQ 2 AS (NutraQ). The business supplies subscription-based health and beauty products, which will offer Orkla “exciting growth opportunities.”
“For us, this is not primarily a case of synergies, but an expansion into new sales channels,” Hege Holter Brekke, CEO of Orkla Care (of which Orkla Health is a part), tells NutritionInsight.
NutraQ has well-established concepts that are showing good growth in both new and established markets, she explains.
“I am impressed by how NutraQ has adopted subscription solutions to reach consumers directly in their own homes. NutraQ will bring Orkla Health new competence, more sales channels and a larger international scope of opportunity,” adds Jaan Ivar Semlitsch, Orkla’s president and CEO.
Brekke anticipates that as a part of Orkla Health, NutraQ will be able to launch a number of exciting concepts and contribute to profitable growth in the coming years.
“The health category is growing and so are D2C businesses,” says Brekke.
Maintaining a stand-alone business
NutraQ is currently owned by the investment company Impilo and Sana Pharma Holding.
Orkla Health has now entered into an agreement to buy 100 percent of shares in NutraQ. The agreement is subject to the approval of the relevant competition authorities.
Orkla Care plans to keep the business as a stand-alone entity to maintain NutraQ’s individuality and special competence in direct-to-consumer (D2C) sales.
“We are impressed by the company’s ability to reach consumers and have no concrete plans to change their marketing strategies. Our ambitions are to keep growing,” emphasizes Brekke.
However, NutraQ’s business model and concepts are entirely new to Orkla Care, and the team will carry out a thorough review after take-over to determine whether it is necessary to make any changes.
“We do this for all new companies and products that we include in our portfolio,” Brekke explains.
Earlier this year, Orkla Care also signed and completed an agreement to purchase 100 percent of the shares in Proteinfabrikken as part of a continued expansion into the sports nutrition sector.
Harnessing organic growth
NutraQ is the company behind health and beauty concepts VitaePro and Oslo Skin Lab.
It also owns the two men’s health brands, Maxulin and Provexin, and the Vesterålens Naturprodukter brand, which offers omega 3 and various vitamin supplements.
The company was established in Norway in 2002 and has since also established operations in Denmark, Finland and Sweden. These four countries account for around 90 percent of turnover.
NutraQ currently has approximately 410,000 active subscriptions and has experienced good growth in the past few years.
The number of active subscriptions has grown organically by an average of 13 percent annually in the period 2018-2020.
The company’s turnover totaled NOK 862 million (US$103 million) in 2020 and had an EBITDA of NOK 188 million (US$23 million).
In contrast, Orkla Group’s 2020 turnover was NOK 47.1 billion (US$5.6 billion).
Orkla Health offers branded consumer goods in categories such as cod liver oil, vitamins and other dietary supplements. The best-known brands in its portfolio are Möller’s Tran, Nutrilett, Maxim, Livol, Collett and Sana-sol.
By Katherine Durrell
