Interview with Biome CEO Blair Vaga Norfolk on Strawman

Biome produces probiotics products based on clinically tested strains that target specific health issues. Traditionally the probiotic market has been focused primarily on gut health, but Biome has found evidence that probiotics can target a range of conditions including acne, depression, IBS, thrush and more.

Biome has two primary channels to market their products: practitioners (such as pharmacists and naturopaths), and health foods store and direct selling. Naturopaths are a key vehicle to educate the end user as they tend to move faster on new research and studies, while GPs are the slowest. Many GPs are still wary of new treatments. Blair doesn’t see this as an issue. The Biome approach is to educate the pharmacist and complementary medicine market, who in turn educate their patients. In this sense their marketing is more B2B than it may first appear. It also appears to be stickier revenue: the pharmacies are the one ordering the product, and will reorder if their customers are happy with the product.

Production and packaging of the product is handled by third parties, warehousing is in house. Blair would consider bringing some parts of this supply chain in house in the future, but primarily as a way to improve control and profit margin. Doesn’t sound like a priority in the short term.

Annual sales growth ~70-80% at 60% gross profit (impressive!).

Overall I was really impressed with what I learned about Biome. Blair came across as a very patient, confident manager who is prepared to move carefully. He seems to have a strong understanding of where his product is placed in the market and how to market it. He mentioned their existing UK operations are small but break even, and it sounds like this could be an excellent launch pad for the EU market when they are ready. This seems like a big opportunity. He notes that probiotics are far more accepted already in some parts of Europe (eg. Germany) than in others. Does that make it a more saturated market, though?

He’s planning to announce an updated sales strategy later this year. This will be very interesting to see. Based on what I have read so far, and saw today, he seems like a thoughtful manager who can execute.

Planning to buy a small initial holding and possibly more after further research. Blair was adamant there are no plans to raise capital at this stage which is impressive, given the recent run-up in price. 

The market cap is now $143 million which I believe means it’s going to be on the radar of more funds. If growth and profitability continue it will can’t help but attract more attention.