How the health of a business relies on the health of a nation
Research conducted by Ibisworld in November 2014 found that the alternative healthcare sector has revenues of $4bn and annual growth of 4%. One of the leaders in this market is Swisse, who under the guidance of Radek Sali is on track for a $200 million slice of that pie. Radek speaks with Business First about bringing sexy back to healthcare.
The worlds of entertainment and health may seem a universe apart, however for Radek Sali, the two are inextricably linked. Having begun his career with Village Roadshow, working under giants of the industry in Graham Burke and Robert Kirby, he came to understand the importance of products that are attractive to customers.
Radek views his time in operations and management with Village as an apprenticeship.
“What I learnt from Village was that a product or an industry should be sexy. The health industry wasn’t as sexy as it should be, yet this is one of the most important assets any industry can have. When you went into stores 10 years ago, the vitamin sector was a boring industry to shop and there wasn’t an aspirational brand. So I wanted to bring excitement and fun to the health industry. I wanted to raise the question of why marketing health couldn’t be as exciting as entertainment.
He worked for Village Roadshow for 10 years and although he could have forged a serious career within the entertainment industry, Radek didn’t want to be a cog in a machine; he was looking to take the lead of an organisation where he could make an impact.
“I was looking at the health industry because my father is a professor of surgery and my mother a scientist. I had a lot of contacts in the health industry, so Swisse was one of the organisations that I connected and resonated with.”
When he began with this now global giant, Swisse had about $14 million in revenue. They are now on track to reach $200 million. Radek puts the growth down to ensuring that people understand that health is people’s greatest asset. Swisse is not only in the business of selling health products, but also in inspiring people to be active and healthy.
This philosophy extends to the wider community and internal staff.
“We want people to be inspired to come to work. We want them to feel they have a great place to work. For most people, the majority of time is spent in the workplace. If you are in a bad relationship you don’t function well. We spend more time at work than any relationship in our life, but we don’t think about it that way. So we want to inspire people to be and do their best and to take action with their health to prevent chronic conditions.”
To do this, Swisse has put a major focus on brand loyalty. Not only are they developing quality product with topline ingredients, the materials sourced create quality health outcomes.
“We have a strong product with the highest levels of retention than any other brand in the category. So when you have the basics right, it is a straightforward thing to tell people about the benefits of the product knowing people will continue to take it.”
Radek believes the retention level throughout the Swisse product range is a reflection of the strength of the industry as a whole.
“The Australian market has the highest intake of complementary medicine in the world. So we understand how important it is to prevent chronic disease. If our diet had more fish and we chose to meditate, we’d be up with Japan as the longest living population. Our standard of living here is fantastic, so, in time, we could overtake Japan. Our competitors Blackmore and Sinofi have invested heavily in this sector, so we have a great industry that is underpinned by strong regulation and continued investment and growth.”
To facilitate growth, Swisse is driving the dietary supplements sector and sports nutrition, which Radek says represents only a third of the vitamins category.
“We will grow that category and also look at expanding our skincare range, Radek says. “We have diversified into categories where wellness fits and where the everyday person is looking to get the best out of their training, nutrition and healthcare.”
Radek practices what he preaches. Taking baselines products including multivitamins, krill oil and probiotics. His father taught him early on that diet causes disease.
Our mind is the most important thing we have. State of mind is essential to the way we eat and doing the right exercise. I meditate daily and if I don’t if it feels like I haven’t brushed my teeth.”
It certainly helps a business when the CEO lives the philosophy. His enthusiasm has also attracted great partners. A recent deal with PGT, an amalgamation between pharmaceutical giant Gamble and Proctor and Teva, Israel’s largest pharmaceutical business, sees Swisse entering one of Australia’s largest licencing deals.
“Our aim is to launch in over 30 countries in the next five years on the back of that partnership. To build a global wellness brand is a really exciting prospect for us. We are a proud Australian business and would love to see an Australian company represented in every pharmaceutical store globally.”
Swisse is an Australian manufacturing business, thriving in a tough manufacturing climate. Radek believes this is because there are such strong standards within the industry that are guiding the quality of the product.
“There is demand for quality Australian products. This strong base has forced us to look for efficiency and be at the forefront of technological advances. It has allowed us to diversify into the UK and US and this helps our supply chain activity and growth.”
It also helps with research and development.
“I love working with raw materials and suppliers and helping to bring products and science to life through brand and education activities, Radek says. “R&D is the core of all opportunities for growth going forward.”
Swisse has taken their fate and success in their own hands, despite a call to see more government investment. Of the $800m fared out to research projects, the alternative health industry attracts only $800,000. Radek believes that what will drive manufacturing in Australia is to create a research hub for complementary medicines.
“And we need doctors to be learning integrative medicine. They need to have the ability to be a specialist in integrated medicine,” Radek says.
“We saw billions of dollars invested in a car industry that is now defunct. However investment in this industry could help us really own the Asian hub for manufacturing supplements. Hopefully we can remain ahead of the game through private investment, but government attention is required to stay ahead in research.”
Having made the health supplement industry entertaining and attractive, Radek has now turned his attention to creating a global brand, where health and wellness is fun and fashionable.