Biome Australia (ASX: BIO), a healthcare business specialising in developing, marketing, and distributing probiotic and complementary health products, has spread its wings into the Canadian market after generating positive feedback and encouraging early sales during a two-month testing period.
Management believes the Canadian market is now adequately derisked for the company to march forward with a broadened brand launch for its flagship line of products, Activated Probiotics. Effective immediately, it will target independent pharmacies, health food merchants, and health practitioners within the nation.
In turn, Biome has engaged the services of its first ‘practitioner education consultant’ in the Canadian province of Ontario, who is tasked with collaborating with partner sales staff to help penetrate the market.
The group’s expansion into Canada has been further aided by a recent tick of approval from Health Canada – the government department responsible for national health policy – for three of Biome’s products. All up, 12 of the company’s 17 products have now received the go-ahead in the country.
Biome Australia managing director and founder, Blair Vega Norfolk, said:
“I am very pleased with the initial reaction of how Activated Probiotics has been received in the Canadian market by customers, retailers and health professionals alike. We view this market and region to be of key strategic importance for Biome’s future.”
Separately, sales of Activate Probiotics in Australia continue to soar with the company reporting a new record high of 188,000 units in sell-through over the most recent rolling three-month period. This represents a lift of about 60 per cent from the same time last year.
Management noted that this outcome relates to units purchased by customers from Biome’s wholesale partners, a critical metric that brings to light the growing demand for the Active Probiotics brand in the Australian market.
Meanwhile, sales of Activated Probiotics from Australia’s largest pharmacy group, Terry White Chemmart, also reached a new record of $3.5 million over the last twelve months through to October. This equates to a 75 per cent boost from a year ago.
The company added that Activated Probiotics has now become the number two brand in total revenue within the practitioner-only category, and the number one for growth.
Blair Vega Norfolk commented:
“The ongoing growth and development in our local market, Australia, has also been very encouraging. The Activated Probiotics brand continues to lead the way as one of the highest growth brands in Australia, with our established health retail partners reporting record sell-through and scan sales over the past few months.”
Biome reached an important milestone of becoming cash flow and operating earnings (EBITDA) positive in the second half of FY24, largely on the back of its growing presence in its core Australian market.
The company’s strategic plan – known as Vision 27 ‒ involves Biome maintaining its cash flow positive status and reinvesting a portion of its profits into growth initiatives, including international expansion.
As part of this strategy, it has set a target of between $75 million and $85 million in total revenue over a cumulative three-year period from FY25 to FY27. For context, the company generated about $13 million in revenue during FY24.
A key ingredient of Vision 27 involves Biome replicating the business model it successfully applied in Australia and implementing it in targeted foreign markets. In Australia alone, revenue has risen from $830,000 in FY20 to $12.1 million in FY24.
More specifically, the company intends to leverage its skilled Australian workforce to support a cost-effective international expansion into markets with a high-growth profile.
Currently, Biome remains at the early stages of penetrating Ireland, New Zealand, the UK, and most recently Canada. It is also testing the waters of a full market entry into the Benelux nations of Belgium, Holland, and Luxembourg.
In FY24, revenue from international markets of about $900,000 nearly doubled from twelve months prior.
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