Mining new opportunities: Herbs of Gold pharmacy expansion accelerates Australian market growth for Vita Life Sciences

By Tingmin Koe contact

- Last updated on GMT

Herbs of Gold's products for stress and sleep.
Herbs of Gold's products for stress and sleep.

Related tags: Australia, Herbs of Gold, Vita Life Sciences, Pharmacy

Australian brand Herbs of Gold saw sales boosted after branching into the pharmacy channel on top of its traditional health food stores base, says Vita Life Sciences, the company behind the brand.

For the past 30 years, products from Herbs of Gold are only sold in traditional health foods stores. At the moment, there are about 500 such stores in Australia.

Since 2018, Vita Life Sciences, which is listed on the ASX, has started on an aggressive pharmacy retail expansion for the brand, while maintaining its presence in traditional health foods stores.

Speaking to NutraIngredients-Asia, ​Vita Life Sciences managing director Andrew O’Keefe revealed that the brand has been stocked in over 2,000 pharmacies.

In fact, this strategic change contributed to a new sales record of AUD$46.5m last year and pushed the company's average growth rate to 5.7 per cent over the past four years.

The change was made as vitamin and dietary supplement sales have slowed down in health foods stores but accelerated in pharmacies, said O’Keefe, who joined the company in January 2017.

Prior to that, the company adopted a dual-brand strategy, where Herbs of Gold was sold exclusively in traditional health foods stores, while another brand, VitaScience, was set up in 2002 to target the pharmacy channel.

Since O’Keefe took over, the company focused on transitioning Herbs of Gold – which had a better brand recognition – to pharmacies, while VitaScience has been discontinued.

"Herbs of Gold has been an established, well recognised, and respected brand within the Australian health food market for over 30 years. It was important to maximise our growth aspirations by broadening our distribution channels and consumer reach."

In fact, both Herbs of Gold and VitaScience consist of products with similar formulations, with differences mainly in the branding, packaging, and retail strategy, O’Keefe said.

According to an industry audit report​ by the Complementary Medicines Australia (CMA) last year, pharmacy was the top choice for Australians buying dietary supplements, with 47.4 per cent purchasing from this channel.

Only 3.5 per cent had bought dietary supplements from health foods stores.

For Vita Life Sciences, sales growth in the Australian pharmacy channel had made the country the biggest revenue contributor. 

Last year, revenue from the Australian market was 45 per cent of the company’s total revenue of AUD$46.5m. In FY2019, the Australian market contributed 39 per cent to the company's total revenue of AUD$42.4m.

While pharmacies had boosted sales, the traditional health foods stores also delivered a double-digit growth last year.

“Throughout COVID-19, consumers engaged with their local community including traditional health foods stores. Consumers were looking for products that supported their immunity, general health, and wellbeing."

Working with selected pharmacies

This year, the company will continue to expand Herbs of Gold into more pharmacies, but O’Keefe stressed that the firm would work with “selected” ​stores which focused on consumer education instead of driving sales via big discounts.

Doing so also helps protect the sales margin of its products and the company will be investing more on consumer education, alongside product innovation.

"Our products are of high price points, and we offer high strength complex formulations.

"Thus, we have invested heavily in training and education resources to ensure our partners are able to identify and recommend the best product for their consumer needs. 

"I think if they do that effectively, then consumers are prepared to pay a premium for our products."

Dual-brand strategy

Outside of Australia, the company focuses on a dual-brand strategy, selling both Herbs of Gold and Singapore brand VitaHealth founded in 1947 in several South East Asian countries.

VitaHealth Turmercare
VitaHealth's Turmercare

They include Malaysia and Singapore – the firm’s second and third largest markets which contributed 36 per cent and 10 per cent to the company's total revenue last year – as well as Vietnam, Thailand, and Indonesia.

"Our VitaHealth brand has a strong heritage and representation in most Southeast Asian markets including Malaysia, Singapore, Vietnam, Indonesia, Thailand, and China.

"After a strategic review of the company’s brand and distribution strategy, it was established that Herbs of Gold could expand its reach into selected markets through a two-brand strategy to coincide with the VitaHealth brand."

Last year, the company also introduced both brands to mainland China via cross-border e-commerce, and that the firm had been “pleased with the traction in demand in China,”​ O’Keefe said.

Look out for Vietnam

Within the Asia-Pacific region, the company believes that Vietnam is the up-and-coming dietary supplement market.

The company has been present in Vietnam for the past decade and is seeing changes in consumption patterns which led to exponential growth recently.

"We see Vietnam as the next big emerging market. It is quite an entrepreneurial market.

"The consumers are very mindful of looking after their health and wellbeing and strongly believe that Vietnam has the potential to deliver really solid growth.

"The company will be targeting Vietnam as a key strategic market for us, where we continue to register products and build our distribution network, alongside our core markets."

Mental wellbeing NPD

In the next 12 to 18 months, the company will ramp up new product development for both immune and mental wellbeing categories on the back of rising consumer demand.

Last year, the company launched 12 new products, including products for mental wellbeing.

One example is Magnesium Night Plus from the Herbs of Gold brand. It is a high-strength magnesium powder containing 320mg of magnesium per serve from magnesium citrate and magnesium glycinate. The product, which claims to support a healthy stress response, also contains passionflower and California poppy.

Another example, also from Herbs of Gold, is Mind Ease, which contains clinically trialled KSM-66 ashwagandha extract to relieve symptoms of mild anxiety.

HOG magnesium products
Herbs of Gold's magnesium product range

“Innovation is important to the organisation with our own team of qualified naturopaths looking at the latest trends to drive new product launches constantly,”​ O’Keefe said.

The company's products are mainly manufactured in Australia, New Zealand, Canada and the US.

Related news

Show more

Related products

show more

Related suppliers

Follow us

Products

View more

Webinars

Nutra Champions Podcast

Nutra Champions Podcast