Science and sales: Aussie firm's signature goat milk formula going places

By Cheryl Tay contact

- Last updated on GMT

The Oli6 infant formula range is now stocked in over 1,000 pharmacies and 200 independent supermarkets in Australia.
The Oli6 infant formula range is now stocked in over 1,000 pharmacies and 200 independent supermarkets in Australia.

Related tags: Infant formula, Australia, China, Milk

Australian firm Nuchev is banking on its signature goat milk formula, Oli6, to develop products for both young children and seniors, spurred by a new study that pointed to the formula's health benefits.

The three-year study comprised a literature review and analysis of a variety of milk compositions — fresh goat's milk, cow milk formula and goat milk formula.

The scientists measured if oligosaccharides conferred prebiotic and anti-infective properties, and assessed the potential of different types of milk, formulas and artificial prebiotics in stimulating the growth of good bacteria and reducing gastrointestinal infections.

They later reported that Oli6 contained 14 naturally occurring prebiotic oligosaccharides (five of which are found in human breastmilk) that could inhibit the ability of harmful bacteria, such as pathogenic E. coli — involved in a third of childhood diarrhoea cases — to attach themselves to human intestinal cells.

Additionally, natural prebiotic oligosaccharides have been said to effectively promote Bifidobacteria​, and to be "instrumental in supporting immunity and digestive health"​, as well as maintaining healthy weight and cognitive function.

Nuchev CEO Ben Dingle said that with six times the amount of prebiotic oligosaccharides in cow's milk, goat's milk had more human health benefits, including easier digestion, fewer allergies, and a closer structural likeness to human breastmilk.

The next planned research stage will entail clinical trials, but these have yet to be announced.

Growth of the goat

Oli6 has seen swift expansion within its native Australia over the last four years, in a goat milk formula sector that is now valued at an annual A$105m — a 35-fold increase from its A$3m value just four years ago. This accounts for almost 11% of pharmacy formula sales in the country.

The Oli6 infant formula range, which consists of three products for three life stages (from birth to three years old), is now stocked in over 1,000 local pharmacies and 200 independent supermarkets.

Since last year, it has been the only Aussie goat milk formula stocked in Chemist Warehouse's 370 stores.

Nuchev's performance in Australia has boosted its China sales​, thanks to Chinese parents who typically view a brand's success in its home country as a good sign.

Its strategy of targeting pharmacy chains first has raised its credibility among Chinese mothers, who often thoroughly research their options when it comes to infant formula.

Currently, the company's total sales are more or less equally divided between Australia and China.

While Dingle has declined to reveal specific figures, he had previously said that within the first quarter of its 2017-2018 financial year alone, the firm had generated higher sales than in the entire 2016-2017 financial year.

In December last year, the company raised over A$7m in fresh capital to drive growth and bring it closer to an ASX listing.

Both ends of the life cycle

Nuchev's commercial success so far, alongside the positive findings of the RMIT study, has encouraged the firm to look into developing more products using the Oli6 formulation…but not just for infants and young children.

Dingle told NutraIngredients-Asia​: "Certainly, there are plans to develop products beyond the infant nutrition category. Currently, we have stage 1 to 3 Oli6 infant formulas, and we're not far away from launching a stage 4 product.

"But we're also developing products for seniors. We're all living longer, and some of the issues that come with older age have become more prevalent, like Alzheimer's disease, digestive problems, muscle loss, bone disorders and joint pains.

"We are aware of the demand and opportunities on the market, and very excited about that. Many people have the basic understanding that goat's milk is good for you, but when you are at that stage when you have to worry about your bones and digestion, and dairy products may be difficult to consume, goat's milk is a compelling alternative."

He added that the digestive, allergic, cognitive and bone health benefits of Oli6 could easily be translated from its use in infant formula and early childhood nutrition to developing products suitable for seniors.

Grazing in Asia

Now that Nuchev has established itself in both Australia and China, plans for Singapore, Malaysia, Indonesia, Taiwan, South Korea and Thailand are gradually progressing.

Dingle said, "The majority of countries are in wider Asia, especially those where consumers have a reasonable amount of disposable income, and are looking for quality goat milk products.

"These are good markets for any brand that has a credible history behind it."

He also highlighted rising level of regulatory scrutiny companies have had to face in Asia, saying: "Already, in China, we've seen certain brands disappear because they couldn’t keep up with the stricter legal requirements, which stemmed from consumer demand (for better food safety laws).

"While tier 1 brands like Mead Johnson, Friesland Campina and Friso are still doing well, many markets in Asia are experiencing ongoing premiumisation, and Oli6 fits well with this trend."

However, Dingle remained secretive about the company's dealings in these countries, merely saying it was "in discussions that are well-advanced"​.

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