Manuka Health mulls capital raising options after global launch of new honey products
By Fiona Rotherham
June 3 (BusinessDesk) - Manuka Health, the functional food and dietary supplement company, is reviewing capital-raising options to help fund a global roll-out of new products said to boost the antibacterial qualities of manuka honey and its pipeline of research and development.
The private company has ruled out a public listing at this stage but chief executive Kerry Paul said it was considering other options including new investors who bring more than just capital to the table.
Manuka Health was founded in 2006 and exports 90-plus products based on propolis, royal jelly, bee pollen, and manuka honey to 45 countries. It has annual turnover of more than $50 million, 80 staff, and is owned by a number of private shareholders including Paul and family interests associated with chairman Ray Thomson, and institutional investors, Milford Asset Management and Waterman Capital.
Manuka Health holds the worldwide licence and pays royalties on sales to Kobe University of Medicine in Japan for the new technology, which combines encapsulated manuka honey with plant-derived cyclodextrin, "creating a free-flowing powder that can easily be added to foods and beverages for ease of delivery of health benefits," according to a report on the company's website.
The combination boosts the anti-bacterial properties of the manuka honey by between 25 to 50 times depending on the product.
Manuka Health's products brand the technology as "CycloPower". Products using the technology are being rolled out worldwide, including capsules that support digestive health, chewable tablets for mouth and throat health, and a skincare range for problem skin.
The supplements can’t legally have therapeutic claims made about them. Paul said the company is funding a human clinical trial in New Zealand on the digestive tablets, that if successful on completion early next year, would allow it to register them to be sold with claimed health benefits.
“It gives the medical community more confidence in the product and we’d like to see these products used as complements to what else they’re prescribing. We’re not looking to replace traditional drug therapies,” Paul said.
Thomson said the company was “trading very strongly” and didn’t have to raise funds to complete the global rollout of CycloPower.
However, international expansion was expensive and the company had just funded a new $10 million, purpose-built honey processing and distribution centre in Te Awamatu last year which enabled it to triple production so “we’re evaluating a number of options in front of us”, he said.
Paul said the rollout of the CycloPower technology platform marked a turning point for the company.
“This is going to take us to a whole new level. My aim is to evolve this company from functional foods and supplements into a global natural healthcare company.”
Along with the CylcoPower technology, the company launched woundcare products last year sold through medical and pharmacy channels, a new skincare range this year, and has a number of other potential products in its R&D pipeline, Paul said.
Getting a new product from concept to commercialisation was one of the hardest management tasks, Paul said, although there was a global trend of ageing populations looking for natural health solutions that allow them to live better and for longer.
“We have to make sure we get the marketing positioning correct. We have to set it up so the consumers we’re targeting can see the benefits that will encourage them to buy.”
One of the other challenges was keeping focus on what products to prioritise, he said.
“You have to have a product that will have a unique selling proposition and can compete in world markets. Manuka honey has had a good spin but it has now become commoditised. Prices have become high and there is consumer resistance to paying those prices for manuka honey alone,” he said.
(BusinessDesk is funded by Callaghan Innovation to cover the commercialisation of innovation)