'Replicate success': Homart to ramp up Thompson’s Herbals NPD and enter overseas post-acquisition

12-Jun-2024 - Last updated on 12-Jun-2024 at 02:51 GMT

Examples of supplements from Thompson's Herbals. © Thompson's Herbals Facebook

Homart Group’s co-founder says the Australian company will double down on new product development and overseas expansion of its newly acquired New Zealand brand Thompson’s Herbals.

Co-founder Jeffrey Yeh told NutraIngredients-Asia that there were plans for Thompson’s Herbals to launch five to six new products yearly.

In the initial stage, the NPD process could focus on new versions or formulations of liver health – which is already a category that Thompson’s Herbals is known for.

Other areas for NPD include eye health and kids’ immunity.

On the other hand, there are plans for Thompson’s Herbals to expand within ANZ and overseas markets, such as China, Vietnam, South Korea, and Japan.

Homart Group announced on June 5 that it has acquired the 74-year-old Thompson’s Herbals and was in the final stages of acquiring essential oil brand Thursday Plantation from fellow Australian firm Integria Healthcare.

Originating from New Zealand, Thompson’s Herbals is also a household name in Australia, where its products could be found in Chemist Warehouse and other pharmacies, as well as supermarket chains Coles and Woolworths.

According to Yeh, Liver Cleanse is one of its bestselling products for Thompson’s Herbals, which already has over 100 SKUs.

A reason for acquiring Thompson’s Herbals, he said, was to boost Homart’s presence back in its domestic Australian market.

In the past 30-odd years, the company has largely developed its international business, setting foot in the Greater China region, South East Asia, Middle East, and the US.

“Our strength is in our Asia export business, but we are not very strong in Australia and New Zealand, although we are an Australia-based company.

“Seventy per cent of our total sales actually came from our exports to China and SEA countries and 30 per cent is from Australia and New Zealand, which is why we want to increase our sales percentage from the ANZ region,” he said.

Acquiring a well-known heritage brand like Thompson’s Herbals will help achieve this goal, he said. And Homart has been on the hunt for suitable acquisition candidates in the past one year.

In fact, he is confident that Thompson’s Herbals will be able to help Homart sustain its current year-on-year growth of approximately 30 per cent.

“We have been growing on average, at 30 to 35 per cent year-on-year. With the acquisition, we believe we can grow at a similar rate, because we are putting similar strategies.”

With the contribution of Thompson’s Herbals and Thursday Plantation, Homart expects its proforma revenue to exceed $100 million in FY24.

Yeh’s said his confidence in growing Thompson’s Herbals came from Homart’s success in building up its in-house supplement brands Spring Leaf, Top Life etc and dairy brand Autili, which for instance, sells lactoferrin milk powder.

Homart is also in the skincare business and is behind the brands VitaBest, Cheri, Grand PawPaw, and Golden Hive.

“Homart, as a family business, has been growing organically for its first 30 years and has built a strong foundation. We believe we can start to leverage on this foundation and our business model to replicate the success.

“Many ANZ brands have a good history, but they only focus on the ANZ market and for those who export, they mainly export to the West and not so much for the Asian markets,” he said.

As such, Homart is hoping to introduce Thompson’s Herbals into China – not only via cross-border e-commerce, but also offline retail by going through both the filing and blue-hat registration routes.

Attracting more supermarket shoppers in ANZ

In ANZ, it plans to increase Thompson’s Herbals supermarkets’ sales revenue.

To do so, Homart is looking to introduce more “supermarket-friendly” pack-size, where shoppers have the option of getting products for one month’s supply.

This is unlike pharmacies where products are sold at a larger pack-size of two of three months’ supply.

“Consumers purchase supplements by Thompson’s Herbals in pharmacies because they want to buy the big pack size products, they want to save money, and to get professional advice from the pharmacists.

“But sometimes, they just want to top up their supplies through their weekly grocery shopping. What we found is that a smaller pack will be more suitable for the grocery channel.

“We will launch smaller pack size products for the grocery channels in order to improve sales from this channel,” said Yeh, adding that it would increase marketing spend for brand.