BioCeuticals MD exclusive interview part 2: 'We've doubled business without the benefit of China boom'

By Gary Scattergood contact

- Last updated on GMT

According to MD Nathan Cheong, BioCeuticals' auto-immunity products are "flying out".
According to MD Nathan Cheong, BioCeuticals' auto-immunity products are "flying out".
Continuous innovation, new product launches, and comprehensive education services have seen BioCeuticals — the Blackmores-owned practitioner-only supplement firm — double its sales over the past four years, says its MD.

Nathan Cheong, who was appointed MD in 2014, said that unlike its retail counterparts, BioCeuticals has not been able to tap into soaring demand from Asia for growth.

Nevertheless, sales have grown from around $39m four years ago to over $80m today. When sales of its Chinese herbal product firm Global Therapeutics (which was acquired by Blackmores last year) are factored in, that number exceeds $100m.

NathanCheong
Nathan Cheong

Speaking to us in Sydney, Cheong said: "We haven't been lucky to have the opportunity to export into China and other parts of Asia, so we focus on what we do best, and that is innovation.

"We have been able to drive innovation through new products, new delivery systems, and through our education."

He said new brands, such as the BioCeuticals Clinical range — which is available only to practitioners in private clinics — and innovative delivery systems, such as its Liposomal Range, have boosted growth.

The Liposomal Range provides nutrients in nano-sized vesicles constructed from either a phospholipid bi-layer (for water-soluble nutrients with or without fat-soluble nutrients) or a phospholipid mono-layer (for fat-soluble nutrients).

Better absorption

These nano-sized liposome and nano-emulsion structures are readily absorbed via passive absorption across transmucosal membranes, bypassing the digestive system for direct and easier absorption.

"This, in my opinion, is really the future for vitamins, because it takes away many of the problems of ensuring delivery to where it is most needed.

"A case in point is glutathione. If you take a tablet, it gets broken down into its amino acid constituents. If you take a liposomal, it goes exactly where it needs to go to in the form of glutathione.

"We have essentially established a new class of vitamin​s, minerals and herbs with our liposomal range. There are other products out there that are (of) a higher particle size and they won't work as well. We were a pioneer in releasing liposomes."

In terms of products, Cheong said BioCeuticals' auto-immunity products were "flying out", ​with practitioner knowledge and consumer understanding of the benefits of probiotics and natural antioxidants rapidly increasing.

"The understanding of these chronic conditions is getting out there now and practitioners are more aware of what needs to happen, either by treating the gut, moderating the diet or using natural anti-inflammatories such as curcumin, glutamine, slippery elm, mastic gum and probiotics.

"Our acute immune products are going crazy. ArmaForce is our best selling item."

ArmaForce contains andrographis, echinacea, olive leaf, vitamin C and zinc, and is formulated to alleviate symptoms of upper respiratory tract infections, as well as to decrease the severity and duration of colds.

"We've also recently launched a range extension, including a product that is safe to be taken during pregnancy and a throat-spray version," ​revealed Cheong.

Qualified approach

Blackmores acquired BioCeuticals in 2014, but there is still a degree of separation between them.

Cheong reports to Blackmores CEO Richard Henfrey and is part of the executive team, but the two firms work out of different offices.

"Everything we do is autonomous, apart from distribution which Blackmores does, and we work with them closely around procurement,"​ he said.

He is a qualified naturopath, and 60% of the 150-strong workforce has healthcare qualifications.

"This really helps us connect with our consumers, the practitioners, and enables us to put our own tweak to our strategy."

Blackmores' Q1 results, released last month, showed that BioCeuticals' and Global Therapeutics' sales by 14% from the prior corresponding period.

In part one​ of our exclusive interview, published last week, Cheong revealed that the firm would launch a range of personalised nutrition testing services.

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