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Iconic Health Brands Poised For Intl Growth

Media release
2 July, 2009

Iconic Health Brands Poised For International Growth
$25m investment supports NZ success in health & wellbeing

New Zealanders - and millions of health-conscious people around the world - have one more reason to celebrate good health this month.

Every year, Auckland-based Vitaco Health Limited produces more than a billion health food and sports supplement products destined locally and for markets world-wide.

Now with a new name and a $25m investment in an innovative state of the art facility in East Tamaki, one of Australasia’s largest health and wellness businesses is primed to continue to grow its global presence.

Vitaco Health is the merged health and wellbeing business of New Zealand success stories Healtheries of New Zealand Ltd and Nutra-Life Health & Fitness Ltd.

Both companies are part of the Next Capital stable of New Zealand investments and merged as Vitaco in 2007. The investment has enabled Vitaco to update and centralise its business in its East Tamaki facilities.

CEO Sarah Kennedy says the new facility positions the company well to continue its global growth strategy.

“Global trends of an ageing population and a general move towards preventive health - both at a personal level and in the political arena - are driving increased demand for our range of products in domestic and international markets,” Ms Kennedy says.

“We have positioned ourselves to take advantage of the world’s growing focus on health and wellbeing and our investment in these state of the art facilities represents a key element in that positioning.”

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Ms Kennedy says the business is focusing on several key areas of growth.

“We have increased our range of ‘better for you’ food and beverage products, in particular children’s healthy lunchbox snacking which has been increasing at double digit growth throughout Australasia.

“The recent launch of three new Healtheries Kiwiana teas in the NZ market has been an instant hit and justifies our continued investment in flexible manufacturing in NZ.

“Sports nutrition is another one of our fastest growing categories as increasingly people recognise nutrition is a key part of health and fitness. This trend coupled with our strong brands and NZ’s expertise in dairy protein drives a winning export platform.”

Natural health categories that have a clear benefit where consumers can feel a result are also growth areas, Ms Kennedy says.

“These are products such as glucosamine and chondroitin for joint pain, and Boost effervescents which are a convenient and favourite form for consumers to take daily vitamins.”

State of the art
Vitaco’s new head office, IT, production and warehouse facility has been refurbished and expanded in a two-year programme that has seen it outfitted with state-of-the-art quality control, production and warehouse facilities and modern offices.

At the facility, Vitaco produces a range of supplements, sports performance products and natural health foods. Sixty per cent of the company’s production is supplements while the balance is in sports and food products.

In dollar terms, Vitaco exports more than half its production – predominantly to Australia, Asia, Europe and the Middle East - so the new premises are designed to meet a range of international manufacturing and regulatory standards.

The company employs around 35 staff in a new laboratory that conforms to global therapeutic goods and medicine manufacturing standards and five staff to ensure international regulation compliance.

Vitaco chair Sandy Lockhart says: “As New Zealand and the world emerge from the recession, and the investment in our new facilities in East Tamaki reaches its full potential, we are particularly well placed to take advantage of existing and new markets world-wide.

“Next continues to see exciting opportunities to partner with leading New Zealand businesses such as Vitaco and Hirepool and to assist them in achieving their growth objectives,” he says.

According to NZTE figures, the New Zealand bioactives sector in which Vitaco operates generated NZ$760m in revenues in 2007 and has around 3,000 full time equivalent employees. A survey commissioned by NZTE reports that most of the bioactives sector growth is expected to come from exports .

Vitaco represents a sizeable chunk of the industry. With a turnover of around $175 million is has 23 per cent of the total turnover of the bioactives industry. It employs around 400 staff.

Vitaco is owned by leading Australasian private equity firm Next Capital which acquired the businesses in 2006 and combined with leading rental business, Hirepool, has invested in excess of $395m in NZ companies in enterprise value terms.

The 15,000 sq. m. new facility brings together Healtheries and Nutra-Life head office, laboratory, manufacturing and warehouse functions under one roof.

Healtheries’ position as the country’s leading health and wellbeing brand was re-confirmed last week when it was named New Zealand’s Most Trusted Brand in the Vitamins and Supplements category of the Readers’ Digest consumer survey. It is the fourth time it has won the category.


About Vitaco

Vitaco Health Limited has been formed from the merger in 2007 of Healtheries of New Zealand and Nutra-Life Health & Fitness. Healtheries is New Zealand’s most trusted vitamins & supplements brand according to Readers’ Digest readers, and one of the world's leading health food and supplement manufacturers. Nutra-Life Health & Fitness is a health supplements company founded in New Zealand in 1984. Healtheries brands span dietary supplements, wheat and gluten free foods, children's supplements and snacks, beverages and teas, oils and weight loss products. Nutra-Life brands cover health and well-being and sports nutrition products including vitamins, minerals, herbs and other dietary supplements.

About Next Capital

Next Capital is an Australasian private equity firm specialising in providing capital for later stage expansion and small-to-mid market buyouts. Established in October 2005, the firm raised $265 million in its first fund. Since then six acquisitions have been completed at a total enterprise value of more than $650 million. The firm recently successfully closed its second fund, Next Capital II, raising $300 million.

ENDS

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