Wellnex Life will officially relist on the ASX tomorrow, Thursday 15 July, after completing its comprehensive plan to return to the market. 

In a statement to shareholders, the company confirmed it will relist after successfully recapitalising with a fresh injection of more than $1.3 million after costs, and the acquisition of Brand Solutions Australia (BSA).

That acquisition followed a strategic review of the business and broader market in 2019 which identified new opportunities within the growing health and wellness sector.

BSA was founded by Zack Bozinovski in 2010, and has since grown to become an emerging player within Australia’s health and wellness market, and distributes numerous health and wellness products and brands with the country’s biggest health and wellness retailers.

These include both Coles and Woolworths, as well as Chemist Warehouse, Priceline and the 3 major Pharmacy wholesalers Sigma Pharmaceuticals, Symbion and Australian Pharmaceutical Industries (API).

Wellnex Life CEO George Karafotias, said the acquisition remains true to what Wattle Health originally set out to achieve – “innovate, develop, and grow Australian health and wellness products”.

“BSA, with its product development expertise and strong retail customer relationships across pharmacy and grocery, positions us strongly to achieve this at greater scale,” he added.

Wellnex Life intends to target the significant vitamin and dietary supplements segment of this market, which is currently worth roughly $3.1 billion domestically, with plans to expand into the  $1.3 billion sports nutrition segment going forward.

Australian supermarkets step up fight for health and wellness supremacy

The relisting comes as Australia’s leading supermarkets are bolstering their health and wellness offerings as the market segment becomes increasingly important to consumers.

Both Woolworths and Coles – collectively accounting for roughly 68% of the Australian grocery market – have rolled out new initiatives to promote the sale of health and wellness goods to meet growing customer demand spurred on by the pandemic.

In February, Coles partnered with the Heart Foundation and Olympic gold medallist Sally Pearson for its Healthier Living campaign. 

Over the course of 28 days, the supermarket chain offered customers discounts as high as 50% on healthy foods after a Heart Foundation survey found less than 15% of Australians are currently eating the recommended daily intake of fruit and vegetables.

In May, Coles’ major rival Woolworths announced the launch of a new digital initiative, HealthyLife, to provide its customers with a “range of health services and advice”.

The digital start-up offers fitness tracking, vitamins, sports nutrition and a “specialised range of nutrition-based natural and organic products not currently offered by Woolworths”, the company said in a statement.

Woolworths CEO Brad Banducci noted the launch comes after the company saw an 80% increase in digital traffic stemming from health-related searches in the past 12 months.

Consumers embrace health and wellness amidst COVID crisis

The spike in health-related searches mirrors supermarket sales data from the Australian Bureau of Statistics, which shows ‘non-food’ items (such as medicines) saw a larger increase in turnover (up 3.8%) than perishable (3%) and non-perishable food (0.6%) in the year ending April 2021.

A similar trend is playing out in the snackfoods space, with chips, chocolates and soft drinks all underperforming their healthier rivals in 2020.

Data from NielsenIQ found sweet snacks in particular are failing to capture the public’s hearts, stomachs, or – crucially – their money, with 81% of these products contributing to less than 2% of the category’s overall sales.

The research found 77% of carbonated soft drinks accounted for less than 2% of their category’s respective sales, while 68% of salty snacks made up a similarly anaemic portion of its figures.

NielsenIQ attributed the weak performance to post-COVID consumers taking charge of their health and opting away from junk food to focus instead on healthier alternatives.

Separate data forecasts the domestic market for health and wellness goods will grow from its current size of $5.6 billion to $7 billion by 2023.

An industry in flux

The outbreak of a pandemic not only placed health and wellness at the front of consumers’ minds, but also ushered in a “new era of innovation within the industry” according to health and wellness business news site Welltodo.

The company’s 2021 Health and Wellness Innovation Blueprint found new lifestyles and behaviours began to emerge in the year just gone, creating demand for new, tailored health and wellness products.

The industry is now in a state of rapid change and innovation as manufacturers and suppliers look to ‘pandemic-proof’ their offerings, leading to innovative new products and diversification.

Importantly, this is creating new opportunities for businesses operating within the sector, and helping them unlock further growth. 

To stay up to date with the latest Wellnex Life news and announcements, register your details on their investor centre.

Reach Corporate provide Corporate Advisory Services to WNX and have been engaged by them to manage their investor communications.

Sources:

• ASX: Wellnex Life Announcement – 13 July 2021
• ASX: Wellnex Life Announcement – 13 April 2021
• Hunt Export Advice: Australia Market Overview 2021
• Woolworths Group: Woolworths Group to launch HealthyLife to meet its customers’ growing health and wellness needs
• Foodmag: Coles to make healthier living easier and more affordable
• Choice: Supermarket satisfaction: Aldi, Coles, Woolworths, IGA and more
• Sally Pearson: Home Page
• News.com.au: Coles joins Heart Foundation to launch Healthier Living campaign
• The New Daily: These products dominate supermarket shelves, but don’t meet shoppers’ needs
• Stockhead: Wattle Health gets a rebrand to Wellnex Life as it targets the health and wellness industry
• Welltodo: 2021 WELLNESS INNOVATION BLUEPRINT