How the small Austrian company shook up the distribution of an entire market
The market of dietary supplements is one of the fastest growing segments of the European FMCG market. The European Consumer Organisation estimates that about 20% of European consumers use at least one food supplement with 67% of all Danish consumers heading the list.
Reaching a value of €2.1 billion in 2018, this market steadily grew by approximately 6% p.a. since 2014 and is forecasted to grow 9.6% p.a. within the next four to five years.
This growth is fueled by an ageing population, a loss of confidence in public healthcare and the trend of self-optimization in all age groups.
German consumers buy dietary supplements in drug chains (41.2%), food stores (32.3%), pharmacies (19%) and online (7.3%). Besides a few independent local retailers selling mainly sports nutrition there is no monobrand retail concept in the DACH market for dietary supplements besides BIOGENA – a unique retail concept.
Biogena is an Austrian family business and part of the Biogena Group (founded in 2006) generating €42 million with 340 staff members.
The company produces and markets dietary supplements in its 17 owned and operated stores (Austria, Germany, Switzerland), its online stores and through physicians, therapists, health and beauty institutes.
The unique retail store design perfectly transports BIOGENA’s brand values: well-being, health, nature, trust, reliability, top quality, purity, knowledge and science.
The Biogena stores I have explored so far are between 100 and 150 sqm. All stores feature untreated wooden elements like tables with tree root bases, wooden shelving and earthy decorative elements. In the larger stores, house plants in raw concrete pots, huge tree top visuals and living green walls add to the impression of natural ingredients, ecological awareness and environmental responsibility.
Each store has a larger than life copper logo depicting a human silhouette.
The design of Biogena’s packaging and visual merchandising creates calmness and serenity and supports their claim of pure, high quality ingredients.
Product presentation is structured by area of application or goal that the consumer might want to achieve (e.g. Vitality, Beauty, Health, etc.), which helps to give them initial orientation in the store.
Due to the small size and low weight of the product, back storage needs are minimal. Thus, the company can make most efficient use of its retail space. The stores convey an impression of a light, spacious and pleasant place. There is sufficient space for decoration and lounge areas, creating a relaxed atmosphere and inviting customers to spend ample time chatting and getting advice from store staff.
The company invests in its store staff. All staff members undergo a specialized education and are certified micronutrient coaches. They are well trained, knowledgeable and attentive, providing support and guidance when wanted and remaining discreet and unobtrusive when realising that consumers would rather discover the product themselves.
Other than most physicians, store staff seem happy to spend half an hour or more understanding your individual needs and trying to identify the best product combination that allows you to achieve your goal. Most consumers leave the store with a feeling that they have been taken seriously, that store staff really care about them and are convinced that Biogena products are going to improve their life, whatever goal they want to achieve.
It has been a long time since I have experienced store staff that did not leave the impression they want to sell me something, but rather care about the best way to improve my well-being. The first time I visited one of their stores, they spent about 40 minutes with me. I did not buy anything that time yet staff still gave me the feeling that was okay, and they would happily spend more time once I return. That, to me, is a unique and rare retail experience.
I do not know what the average income of a Biogena store staff member is, but I would assume that they earn a lot more than ordinary store staff.
Consumers of dietary supplements are quite insecure. There is a great deal of discussion amongst scientists and physicians as to whether dietary supplements are useful and who they are useful for, what daily intake is recommended and what side effects exist between different supplements.
There are also a lot of scandals about synthetic ingredients, impurities in the cause of manufacturing, contamination of ingredients with heavy metals like lead, as well as concerning stories about undignified manufacturing conditions, pollution of air and water, child labour and many more negative impacts in manufacturing countries like India.
That is why Biogena exclusively produces in Austria, which is an essential element of their unique retail concept. The company claims that its products are as pure as possible, containing no food colourings, preservatives, hidden additives or processing aids – like so many others. The capsule shell is purely plant based. Ingredients are hypoallergenic, gluten/lactose and fructose free. Each and every batch undergoes quality controls – something that is rather unusual in this industry. And Biogena commits itself to a complete declaration of ingredients.
I have checked all Biogena products available at the CodeCheck page – an independent, community-based app which allows users to better understand the effect or danger of ingredients of any product. All products have been approved as being secure, imposing no health risk to consumers.
And of course all those efforts have to have their price. Biogena is a lot more expensive than products of other big players in this business, all of which produce in low-wage countries and most of which did suffer from one or the other scandal. But even this higher price communicates the high quality and purity standards of the company, thus perfectly supporting the DNA of this unique retail format.
Knowledge and Education
Each of Biogena’s unique retail stores provide a compendium about micronutrients which allows interested consumers to double check indications, effects, side effects and recommended daily intakes of dietary supplements.
The website provides an online coach, helping to provide optimum individual composition of dietary supplements depending on what you want to achieve (strengthening your immune system, better sleep, boosting mental of physical capacity, and so on), as well as your age, gender, diet and lifestyle.
Each product recommendation comes with an explanation about backgrounds but also contains recommendations about optimum diet, tips and tricks about physical movement and mental health that might help to tackle your problem.
Since 2010 the company has run its own academy, providing seminars, webinars and podcasts in order to improve knowledge about micronutrients and their effects not only for consumers but for professionals too.
On top of this, the Biogena Club offers the opportunity to participate free of charge in the Biogena education to become a certified micronutrient coach.
Biogena’s blog provides news about latest scientific findings, seasonal health challenges, health and well-being boosting recipes, sports trends and their health effects and many more.
Distribution and Partners
Besides selling products in stores (online and brick & mortar) Biogena cooperates with about 9,000 physicians and therapists in the DACH region. Through its academy the company provides interested partners education about micronutrients, new scientific findings and consumer trends. The company conducts their own scientific studies and openly communicates the details of them – not only offering executive summaries.
Another element of Biogena’s unique retail format is their packaging. Biogena sells its products in an innovative eco bottle. Made of 100% vegetable raw materials (sugar cane), the bottle is 100% recyclable, food safe, without plasticisers and made in Austria.
Biogena has already planted 125,791 trees in the Plant-for-the-Planet reforestation area in Campeche, Mexico. The company plants one tree for each participant of its events (Academy, CSR and company celebrations) as well as for each new and existing employee. On the website you can find a tree counter recording the company’s success.
Thecompany consistently lives and communicates its values and brand DNA from product and packaging, through its stores, across all distribution and communication channels and of course through the commitment, dedication and passion of its staff – truly a unique retail concept. And this is probably the greatest achievement of the company.
About the Author:
Heike Blank has worked for big organizations such as VF Europe and s.Oliver but also for niche brands such as Ecko Unltd. and Zoo York in top executive positions. Her extensive experience with opening and managing own retail, partner stores, concessions and shop-in-shops in 23 countries in Europe, the Middle East and Asia make her an expert in expansion. Read more of her work here and connect with her on LinkedIn.