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2026.10.08 | TB | Consumer | Vitabiotics: Premium Positioning in Supplements

原标题：Vitabiotics – Sustaining Premium Positioning in a Commoditisting Category

#consumer

Third Bridge · 2026-10-08

Analyst-led • 30 Sep 2026

Companies: TSCO GB

Rhys Alderman (RA) Director, Finance at Highbourne Group

Alex Smith (AS) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

AS [00:00:05]: Before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

RA [00:00:21]: I agree.

AS [00:00:23]: Thank you very much. Welcome to Third Bridge's Interview entitled Vitabiotics – Sustaining Premium Positioning in a Commoditisting Category. I'm Alex Smith, and I'll be hosting today's Interview with Rhys Alderman, former Director of Finance, Commercial and Strategy at Holland & Barrett. Could you please begin with a brief introduction to your background?

RA [00:00:53]: Yes, Rhys Alderman, as you said in the intro. I've worked 20 years in finance roles predominantly, mainly in the consumer sector, so retail, e-commerce and then latterly multi-site commercial vehicles and then also in the building industry as well. It's been in commercial facing, predominantly FMCG, retail and e-commerce businesses for the majority of my career. Within that, I spent a couple of years, as you said, as FD at Holland & Barrett, working in the head office in Nuneaton.

Questions

00:01:35] What key trends and consumer behaviours are shaping the VMS [vitamins, minerals and supplements] category, and how do you think these might evolve over the coming years?

RA [00:02:00]: First thing to say is, very good industry. I think the broader consumer trends that are happening at the moment are encouraging. I think if you look at some of the key players' financial accounts, including Holland & Barrett, you'll see a decent amount of growth in each of them. This is certainly a market that is growing and resonating with consumers for different reasons as we'll unpack in a bit. It is definitely a growing market, both in the UK and internationally as people become more and more conscious about health, longevity, wellness, these kinds of things are all growing importance, growing interest from a consumer perspective. Specifically on trends, I think probably what I would have observed from my time and previous is, consumers are definitely moving away from your bog-standard vitamin C, vitamin D, over-the-shelf-type thing. I think that's become very commoditised in the last couple of decades. I think if you just want a standard vitamin C, you can get that pretty much anywhere. You can literally get it in your petrol station now as well as your supermarket as well as your more traditional online and offline retailers.

I think what has definitely happened is you've seen this move into more mission-specific needs, be that things like menopause or be that things like digestive health, that kind of thing. There's definitely been a movement towards more specific granular use cases for vitamins and also multivits and various bits of that linked to, "I'm trying to solve this problem," or "I have this issue," or "I'm trying to prevent this thing." I think they're definitely seeing that sort of more mission-based movement. I think within that, there's definitely a shift towards more proactive rather than reactive kind of health pieces. I think people are thinking about their healthcare routine and their diet and how the VMS, VHMS market fits into that. I think they are thinking about things more proactively now. In particular, I think you're seeing people at a younger age buying into this. I think you go back 20-30 years, it probably was more the mainstay of the elderly and a few more plugged-in consumers. Now I think you are seeing the younger generation getting more interested in things like diet, lifestyle, health, exercise, and VHMS plays a role in that. You are definitely seeing a move towards proactive activities. We definitely saw that in some of the trends within the sector at H&B.

I would say within that, there's been a couple of specific areas that have been very, very hot. Menopause is one, gut health will be another. The proliferation of CBD has been huge in the last couple of years. It's probably a bit more of an older trend now, but I would certainly say in the last 6-7 years, that trend has been big. CBD is in everything now. I would say beyond that, there's definitely more of a move into celebrity-type endorsements now with some of these brands. It's not only Vitabiotics doing this kind of thing. I see this a lot with people like Jennifer Aniston endorsing a lot of brands now, a number of other people that are endorsing these things as well. I would say definitely a shift towards use cases, missions (1). I would say definitely a shift towards more proactive use cases (2). I would say definitely specific areas like gut health, menopause, CBD, those kind of things are definitely getting a lot of traction. I think they're becoming a lot more clued up on ingredients and quality and what goes into these things now. They are definitely studying those kind of things. Being able to explain those in clear terms is definitely an important factor.

The only other one I haven't mentioned is, I guess, personalisation. We were seeing a lot of that, and I see a lot of that in the market now as well when I think about brands like Heights, but there's a lot of other ones doing similar things where you're almost telling it, "I have this problem," or "I'm trying to solve for this." They're almost doing more tailored vitamin programmes for you. I think that is probably a bit more niche just because of the cost of delivering in that mechanism, but that's certainly a way to access higher-end customers, almost like bespoke one-for-one, "I will build this for you and obviously charge you a premium for it." There's definitely on that side of things, albeit with a smaller segment of the market, there's definitely an opportunity to go laterally with them. Link it into a blood test, link it into other outcome things that you can do, but certainly, there was a lot of interest among a smaller group of customers for that kind of thing as well.

00:07:47] If we were to fast-forward 3-5 years, do you expect a radical difference vs what you outlined, or a continued evolution of the trends you've highlighted?

RA [00:08:03]: I think there'll definitely be a continuation of some of the trends I just mentioned over the next couple of years, definitely. I think science will shape a lot of this. I think we're still very much at the infancy of these GLP drugs, these weight loss drugs now, and I think there will definitely be a use case around these. I think there's a couple of million people in the UK alone now on these GLP drugs. There's definitely going to be a need to do some kind of care around these, particularly as customers come off those drugs and they try and get back into a sustainable routine. There's a lot of research at the moment that shows when people come off these drugs, they put weight on as fast and they lost it. I think things like weight-loss drugs in the front end, but then how you come off the weight loss after, I think there's probably going to be a big market around that. Similar to smoking and nicotine pouches, I think you're going to see quite a lot of both drugs, but also services that try to deal specifically with when people come off these drugs. I think there will definitely be something around that.

I think you're going to continue to see more and more interest in mission-based demand. "I have this problem, I want this thing." You're definitely going to see more around proactivity, "I want to prevent this rather than deal with the problem I've got." You're definitely going to see more around personalisation and you're definitely going to see more around joints, extending quality of life, that kind of thing, that sort of wellness piece, longevity piece, I think, is going to become more and more important.

00:09:56] You mentioned that certain segments are commoditised because no one disputes VMS's growth potential, but there is criticism about becoming an increasingly commoditised category. We've got a two-tier polarisation market structure featuring legacy commoditised VMS products and offerings alongside mission-based, mission-specific demand. Can we be sure of the longevity in this more value-add category with no risk of it undergoing commoditisation?

RA [00:10:41]: I think with these things, when it comes to anything that's perceived to be healthcare, trust plays a huge role in it. I think trust has got a couple of angles to it. One is, "Can I see results when I take this thing?" I think my experience when I've worked in the industry has been, if people can see an outcome, whether it is real or it's a placebo effect and perceived to be real, but if they believe they can see an outcome, they generally won't switch. I think there is a lot of loyalty into brand, and I think trust plays a key role. Holland & Barrett, I think the business has talked openly quite a bit about retention of customer and the fact you have a lot of loyalists. I've seen Vitabiotics talk about that externally as well. I think the brand endorsements and the brand partners they've got are probably quite an important part of that as well. I think something like Pregnacare and the line they have there, I've heard doctors recommend that line to pregnant mothers, which is quite crazy. There's some of that, it is in the vernacular in the same way vacuum is with Hoover and stuff like that.

I think there's definitely a risk around the commoditisation of some of the stuff, but I think what Vitabiotics and brands like Holland & Barrett have is a lot of legacy trust that's hard to rebuild. I think with some of the online guys, I think people are probably going to be a bit more hesitant consuming something from a brand they've not heard of. Certainly, the older generation, I think, are going to think that way. I think, as with all these things, I think they evolve quickly and things will continue to grow. I think the bigger brands are probably going to be well-positioned to take that learning, take that science and slightly refine what they already have and slightly repackage what they already have as an evolution. I think that's probably where they'll be able to win. Also, like I said, I think they're leveraging the trust, leveraging the brands, leveraging the brand partners. I think Vitabiotics, in particular, the brand partners that they have that endorse things, I think that's Tess Daly and David Gandy, people like that, I think there's a good association, trust, brand piece with them as well.

00:13:13] Which imminent regulations may change the landscape for the UK VMS market or Vitabiotics specifically? What should we focus on, whether that's claims or anything else?

RA [00:13:38]: There's a couple of bits to this that I know were definitely discussion points. Think there's one specifically around sugar and the HFSS piece. I know a lot of the gummies in particular, which is quite a popular mechanism for consumption of some of the vitamins. Gummies are quite popular there. I know a lot of those had a lot of sugar and stuff like that in them. Making sure that those kind of things fall on the right side of HFSS is quite important. I think particularly with some of the new vitamins that are coming to the market, I have seen a bit on the advertising standard side of things around claims they're making. I think people have to tread very carefully about the scientific research that backs up the claims. Again, I think that kind of thing is where bigger brands can win because obviously, getting scientific proof that your product, your thing meet certain standards, meet certain claims is quite important. You definitely have to tread carefully on the language you're using there to stay on the right side. I think particularly when it comes to new product areas, nootropics was one. Some of the claims around nootropics I've seen are wild. I think that's being brought back in quite a big way. I think those two, they come to mind.

In the markets Vitabiotics operate in, in particular, I think UK is clearly still biggest single market for them. I was looking at the accounts last night, I think that's still GBP 84m of GBP 195m of their revenue. It's not far off half of their revenue. Clearly, in the UK market, things are quite regulated in terms of maximum permitted levels on ingredients and different things and that kind of stuff, and that will be the same for the EU, which is presumably another key market for them, but again, they'll be pretty well-versed on complying with that and making sure they're on the right side of that. I think as new things come to the table, particularly nootropics and stuff like that, I think proving the use case that they're not harmful, but also that they do what they say is going to be quite critical. I think outside of that is just making sure, particularly on things like sugar and stuff like that, where it's added as a taste element to things, just making sure that you're on the right side of HFSS and the international equivalents of that.

I know there have been some issues in the past with different retailers around CBD levels specifically. That is very important to stay on the right side of it because if your CBD penetration is too high, then you quite quickly find yourself in a very different market that's not entirely legal. Yes, making sure that is on the right side is quite important.

00:17:07] Is there anything to highlight about supply chain disruptions impacting the VMS industry? How are players, such as Vitabiotics, managing any supply-constraint headwinds?

RA [00:17:23]: Yes, there's a couple of bits to this. Things are evolving quickly in this space. The obvious ones are freight. Freight costs have gone up significantly in the last couple of years. I think typically, when you think about a product like a vitamin, it will be sourced with ingredients from a variety of locations. The plastics typically and the packaging would typically be far east-sourced, be it plastic, be it the foil, be it the glass for the cylinder, if you're using that kind of stuff in a more premium-type product, they'll typically be sourced in China or far east locations. I think shipping logistics and those kinds of products were certainly problematic, and I think it's likely to be so going forward. I think energy production, both in those locations, but also domestically, is going to be a challenge as well. Cost of oil is clearly USD 100-plus again, which is going to be a big challenge. I think in terms of the actual product ingredients, again, they will typically come from a variety of locations, particularly the botanical elements. I think it is extracted from plants, they will come from a variety of typically tropical locations. There's definitely some challenges in this.

I think pricing power becomes quite important here because I think there is going to be a fair amount of volatility in prices. I think maintaining that is going to be quite important. I think certainly, what I've seen in other companies has been making sure that there isn't a dependency entirely on a single location. I think if I go back a couple of years ago, the reality is probably almost 100% dependency on China for certain elements of plastics. I think diversifying that supply base so that there is a bit more flexibility becomes important. I think hedge becomes a lot more important. In the last couple of businesses, I've seen people hedging a lot further out just to get that certainty, so having a higher proportion of the next six, 12, 18 months hedged than you would do ordinarily, just to give that certainty both within your business, but also to your supply chain. I know export and wholesale accounts are very important for Vitabiotics. Wanting to give that price clarity to a Tesco or whoever it may be is quite important. I think hedging and diversification of where stuff is sourced from is more and more important as the business steps forward.

00:20:22] How do you think Vitabiotics' sales and market share will perform over the next couple of years? Do you expect any deviation from how the business has trended over the last couple of years?

RA [00:20:50]: The first thing to say is, if you're going to face pricing pressure, you want to do it from a 40-50% margin standpoint, that gives you a bit more flexibility at least. The margin structures in Holland & Barrett when you look at the accounts there, I think their gross margin in the accounts is 60%. I think Vitabiotics, given its sales in the wholesale, I think from the accounts I looked at last night is mid-40s. I think they're probably going to have to stomach a little bit of this would be my guess, especially given cost of living and where things are. I think in the near term, it is going to be difficult in the UK market to pass significant price increases on because I think you are starting to see wage growth is slowing quite a bit. I think a Tesco is going to probably be quite reluctant to take price increases. The reality is they probably will have to stomach some of this. I think, like I said, multi-sourcing, diversifying that sourcing base, hedging further out are going to become important.

I think the reality is they probably are going to have to eat a little bit of the margin pain in the near term, but I think diversifying supply base, hedging probably provides a bit of certainty around. I think there probably will be a bit more of a push on efficiency, automation of supply chain, how can you produce more efficiently so that you haven't got to push through price in the near term would be my guess, but yes, I think there's probably going to be a bit of challenge to margins, I would suspect in the next 12-18 months, in particular, while there is the pressure on supply chain, while there is the pressure on oil prices, the disruption with the various wars that are happening.

00:22:50] If Vitabiotics is looking to absorb some of the cost increase without upping price, the company's top-line momentum should be consistent with what we've seen in the past. Is that correct?

RA [00:23:01]: Yes, I would think. I did note when I looked at the accounts last night that the revenue had dropped slightly. I think it was GBP 196.5m in '23. It dropped down to GBP 195.5m-ish. I think the momentum has slowed slightly against the prior-year run rates. It seemed to be mainly in the rest of the world segment. I think the UK market had grown about GBP 6m and the rest of the world had gone down about GBP 7m. How much of that is conscious vs unconscious, I don't know. I think the tailwind is definitely the market momentum. I think that helps. More and more people are buying this product. I think the headwind is very much cost price pressure vs what they are able to pass through in the near term when consumers are facing a cost-of-living crisis. I think consumers will want to protect this kind of spend as much as they can, but equally, there will be limits. They are probably talking to a more premium customer, by and large, who probably is able to take a little bit more of that pain, but I think the reality is I think top-line momentum will continue to benefit from market growth, but we'll probably have a bit of pricing pressure from not passing through the same level of price increases as maybe they've done in the last couple of years, would be my guess.

00:24:38] How would you describe Vitabiotics' current portfolio? How should we assess segmentation across categories or brands? Do you have any insight into its geographical exposure?

RA [00:25:06]: Broadly, they structure men, women, kids and then underneath each, they've got use cases on each. I think women is very much focused on the Wellwoman brand. Pregnacare is clearly huge there. I think that is dominant in the conception during pregnancy, post-pregnancy, breastfeeding, that kind of thing. I think the Pregnacare brand is massive. I think also the menopause side of things is increasingly big for them. The 50-plus piece they have under the Wellwoman brand, I think is very strong, certainly resonated with the customer base at Holland & Barrett very well. I think on the men's side of things, there was certainly a lot more around joint care. That was definitely one that was growing quite well. Then the generic, I guess, Wellman brand, but also the hair piece was definitely growing in interest too. I think kids was very much the multivit packaged with an insert of latest brand name that works well, whether that's kind of Peppa Pig or the Marvel Comics, etc, etc. I think that was a bit more of a generic multivit with a brand on the front of it that the kids liked taking as a result of things.

I think it was definitely more on the female space that there was the clear traction. I think Pregnacare, Wellwoman, but also menopause increasingly were very important. I think as ever, outside of those use cases, anything with a brand partner on that resonates with people always did well. I think Wellwoman always did well because of the Tess Daly piece. I think that was definitely a brand partner that people resonated with. I think there was good traction with that. Clearly, it works better in the UK market. It's a UK business. It's been more established here for longer. The brand partners probably resonate really well here more so than in the other international markets.

Holland & Barrett as context is UK and Benelux predominantly, and then they've got international businesses as well. I think from memory, the relative penetration in those international markets was lower than it was in the UK market. The UK market is clearly the big piece for the business. I think since acquisition, I suspect for Vitabiotics, the focus will probably be on how do they grow more internationally and how do they grow that side of the business even more, I suspect. I think trying to replicate those brand partner-type relationships in international markets is going to be probably the best route forward. I don't know whether there are acquisition opportunities for them to leverage partners that are doing that kind of thing really well. I think in the UK market, clearly, they price at a premium. They price at a premium because the perception of their brand is it's a premium brand. I think the brand partners definitely play into that. There's a perception among customers that they are more science-backed, they are better quality rightly or wrongly. I think there's a lot more trust around the longevity of the brand, the science-backed piece, the brand partners, and therefore, it commands more of a premium in the UK market.

I think internationally, it probably has a good exposure. The majority of their revenue comes outside of the UK. Clearly, they're doing something right there. I think replicating that same premium position in new markets takes a bit longer, because I think in the absence of that sort of… Tess Daly doesn't transfer to the Netherlands in the same way it does in the UK, as an example. I think trying to replicate that sort of brand partner penetration is quite important. I think probably acquisitions give them an opportunity. Now that they've got bigger private equity financial backing, that probably gives them an opportunity to shortcut some of that, but I think replicating that model in international markets probably works quite well with the local brand partners that are relevant for that market. We certainly see in the US that that approach works well as well.

AS [00:29:42]: Across men, women and kids, is women the biggest segment?

RA [00:29:52]: I believe so, yes. Certainly, that's my recollection.

00:29:58] It seems that Vitabiotics is having slightly more success in the UK with its women's segment, compared to men and kids. What do you think is driving that superior performance?

RA [00:30:16]: If you think about the portfolio, I think they've got, like I said, consistent, good, well-established brands like Pregnacare that are just the go-to for that use case, pre-pregnancy conception, during pregnancy, post-pregnancy, I think that market is very, very strong. I think menopause has been huge in the last couple of years. I think pre-menopause, post-menopause, I think that side of things has been certainly a big growth area when I was working in the sector. I think beyond that, the age-specific, 50-plus, 70-plus, those side of things, were working quite well as further segmentation. There was a lot more around haircare. I think we've got a Hairfollic range, that side of things. I think that always worked well. There was certainly a bit more of a, I guess, trying to toe that line between health and beauty, so vitality-type things, stuff that helps you with energy, stuff that helps you with hair appearance, that kind of thing, nail appearance, they were becoming more and more popular as well.

00:31:38] How should we assess the competitive strengths and weaknesses of the Vitabiotics brand and its portfolio?

RA [00:32:13]: I think you have to talk about UK and international very differently here. I think UK, like I said before, their strengths are very much well-established. It's perceived to be an older brand that's been around for a while, been doing it for a long period of time. I think there is a lot of trust in outcome and the science piece, and I think it is trusted almost like a medical level as a brand. Then I think the brand partnerships, like I said, they all work pretty well. I think the penetration probably for the business in the UK market is probably a bit more weighted towards older. I think things like Pregnacare is probably mainly talking about a mother in the 30s rather than mother in the 20s. I think Wellwoman, Wellman are generally targeting 40-plus. Clearly, menopause is targeting an older age group as well. I think things like Perfectil, the more hair, nails, like I said before, the skin, too, they probably aren't targeting a 20-year-old as much. I think they're definitely targeting an older demographic. I don't mean by that a 60-70, I mean a 40s-plus demographic as opposed to some of the brands like maybe Heights and those kind of guys that seem to be targeting younger sectors.

I think given that they charge a premium in this space, they're probably going to have to talk to a slightly older customer base just practically. I think that is clearly where they are stronger in that older group. They're stronger, particularly within the female side of things, in particular, I think they're very, very strong. I think clearly, they are targeting a more premium side of the market. I don't think they want to compete in the lower end of things. I think they probably are less on the tailored. They are mission-specific, which itself, I guess, is tailored, but they are less specific to me or you. They're less specific to what we want. That's not where they are. I do think that is going to become more and more important. I see them going less in some of the more faddy things like CBDs, like nootropics. I've seen a bit of them doing that stuff, but I think they've generally stayed away from that. Those things have proved to be very popular, but they can burn out quite quickly. If those things become more and more popular, I think they need to find a solution there. I suspect the top five for them are probably the same top five they had maybe a decade ago would be my guess. I doubt they're shrinking, but it's just how do they continue to bring new, relevant things, particularly as they expand into new markets.

00:35:32] Do you think there is an opportunity to target younger consumers or does Vitabiotics' premium price make that difficult? You mentioned charging a premium and how the USP probably plays better with the 40-plus age group.

RA [00:35:52]: I would say if they wanted to do that, they'd probably do that through a different brand – would be gut feel on that one – and maybe they acquire something. If they were to acquire another brand, there's going to be a huge synergy they can bring to the table in terms of producing the product, sourcing the product, branding the product. In the same way other retailers have been adding brands to their portfolios quite efficiently. I think they probably could do that quite nicely because they've clearly got a lot of experience in this. I think it will be harder for them to go into a younger demographic, would be my initial read. I think they don't seem – or haven't seemed to me, at least – particularly interested in doing that. I think they're quite clear on who they serve, who their customer is, and they do a great job on that, but I think targeting that younger market with the brand might be challenging.

00:37:03] Are consumers buying into and staying loyal to the Vitabiotics name or the sub-brands? Would an acquisition be showcased under Vitabiotics or kept as an independent brand?

RA [00:37:25]: I think you're probably right, the sub-brand is quite important in this one. For example, Pregnacare, I'm not sure people would know necessarily that that is Vitabiotics. Pregnacare is the one that is quite different because when you think about all of the other female ranges, they're branded very, very similarly – the Wellwoman, the menopause, the branding, the colour scheme, Perfectil, too, it's all heavily purple. Pregnacare looks very different. I hadn't appreciated prior to joining the sector that they were part of the Vitabiotics brand. I think there probably is an opportunity. The sub-brands are very important for them. Pregnacare exists as a thing completely independent of Vitabiotics. I think you'd think that was a brand in and of itself or a business in and of itself. I think they could definitely have another sub-brand. I don't think you would target the younger demographic with a well, insert whatever the right word is after the word, well, but I don't think you would necessarily target someone in their 20s in that way. I think it would be a bit more use case-specific. I don't think that Wellman, Wellwoman, that kind of thing would work well in the 20-35 category.

00:38:53] You said there's a high level of consumer loyalty towards Vitabiotics and its sub-brands, with legacy being a factor. What is the consumer perception regarding product quality or efficacy, and is that a result of legacy or first-mover advantage?

RA [00:39:29]: Yes, there's definitely a lot of trust on this. We could see a lot of switching data that was showing us same customer buying same product quite intensely. I think particularly when you look at women, it would seem from the data I've seen at least, Pregnacare was often the entry point. Thereafter, there was an opportunity to retain them in the portfolio with post-pregnancy, but then also into Wellwoman and that sort of things that worked quite well as a entry point for the brand. There was a lot of loyalty into repeat purchase of that brand, definitely.

AS [00:40:16]: What drives that perception of trust and efficacy, and is there a risk of that breaking down?

RA [00:40:27]: I think with Pregnacare, like I said, I've literally seen multiple doctors recommend that brand as if that's the only thing in that space. I think with Pregnacare, there is a medical link to it. It is recommended by doctors, it is recommended by your GP. I think beyond that particular sub-brand, because that one is a bit unique, I've not really seen that in any other sub-brand or any other vitamin at all really. I've not seen a GP consistently recommend that brand, but I think beyond those, I think the thing that keeps people coming back is definitely there is a perception of quality with the brand. There is a perception of efficacy in terms of the science-based outcomes. I think there is definitely a link to the brand partner. I guess, they tend to keep the same brand partners for long periods of time, long, long deals, and they tend to pick well. They tend to pick good advocates that are perceived to be healthy, perceived to be, I guess, particularly on Perfectil and things like that, they are perceived to be having the same people who would want in terms of hair, nails, that kind of thing, good looking, that kind of stuff. I think those kind of things will work well.

It is a brand that, from my perspective, has been fairly low on scandal. That kind of thing, it hasn't happened and that kind of thing is death in this kind of space, any perception of poor-quality production, any negative health outcomes. If David Gandy was not a vendor for six months, that would not reflect well. Those kind of things, they've not really had, would be my perception, so the consistency is definitely there. I think as some of the new brands become more and more established, they will clearly challenge that. Clearly, Vitabiotics is charging a premium for a pretty similar product to a lot of other people, but people buy into that. It is no different to iPhones.

I think maintaining that for those customer sets and bringing on new brand partners as they come towards the end of the life cycle is important. I think clearly, they're going to become undercut. I think clearly, as people go more and more down the use case mission-based route, I think it is going to become more and more niche and less and less generic multivit, it's going to become more and more like Pregnacare, like menopause. I think you're going to see a lot more of this. Gut health has been the big one recently. I think you will see more and more of those and how they adapt to that is probably the key bit making sure they continue to have more and more relevant brands as these new interest levels come out. I think they're pretty good at staying on trend, but these trends do come up quite a lot as either science or social media drives their interest.

00:43:28] Would you say the perception surrounding Vitabiotic's brand and product efficacy isn't as established or strong outside of the UK?

RA [00:43:43]: Yes, I think it's different market by market. Clearly, Ireland is so similar to the UK that you can almost treat them as the same. Outside of UK and Ireland, I think mainland Europe, probably less so. Benelux, less so. US is a very, very competitive market that Holland & Barrett tried unsuccessfully several times. That is a difficult market. I suspect they do okay in that market, but again, I think replicating the position they hold in the UK market where they are perceived to be the established, trusted and they've got that sort of brand reputation with the brand partners of being able to charge that premium price, I think that will take longer to establish. They've been doing influencer marketing way before it was a thing. They've been 20-30 years ahead of that in terms of what they've been doing there. Replicating that in new markets now will take longer and cost more. I think with the ownership and the capital structure they'll have behind them now post the sale, I think they'll be well-positioned to do that. I would think acquisitions might become attractive to them to acquiring something they can put under the sub-brand that they can then probably acquihire some good people in, but also then leverage their supply chain, their sourcing, their marketing, that kind of stuff, I think that will make a lot of sense to me.

AS [00:45:22]: You mentioned that brand perception in the UK is very strong in terms of R&D, science and efficacy. How does it stack up in reality? Is there any way to gauge that?

RA [00:45:39]: Yes, I think perception internally it was good. Primary care in particular, I think, good. The other areas, Perfectil, I always wonder how you ever prove skin better. I think that's just in the eye of the beholder really. I would say certainly the perception is that it does what it says. I think that certainly was the perception from a company standpoint, but also from a consumer standpoint.

00:46:12] Recognising Vitabiotics' change of ownership in July 2026, how do you think a new owner should steer the business vs five decades of family ownership? What organic growth strategy and changes should be implemented to ensure the business remains competitive in the UK?

RA [00:46:43]: One thing I always wondered about was when you look at the business structure, so 2024, they did GBP 195m revenue, of which I think GBP 84m was in the UK. UK accounts, which I'm assuming is wholesale is GBP 71m of the GBP 84m, which implies GBP 13m is direct-to-consumer via e-commerce. I'm surprised they can't do more direct-to-consumer and cut out the middleman. I'm assuming the margin structure is significantly higher when they're going D2C rather than via a Tesco or a Holland & Barrett that are taking their own cut and things as well. We're trying to target more D2C and things like… I know they offer a discount if you do repeat purchase, that side of things. I don't know if they've ever done standalone stores. I suspect that's not something they'll be interested in doing. How can you ramp up that e-commerce side of things? Because I think if e-commerce is GBP 13m-14m of a GBP 84m-85m UK business, that sounds quite low to me. I'm surprised they've not been able to increase that. I would definitely see that as an area they could probably improve on. I'm not entirely sure why that is. I'm not sure if it is just the convenience, but given the data suggests this is a repeat purchase, I would have thought subscriptions would have worked well there.

I don't know if they're on Amazon and stuff like that. I'm not sure if they're able to with the Tesco-type relationships they've got. I would definitely say that kind of route to market would seemingly be an opportunity in my mind. They will have the internal data as to why that isn't the case, but being able to cut out the wholesaler, I think it's got to be a big margin play. Like I said, they are very good at owning a thing, so they are very good at owning Pregnacare, very good at owning menopause and Perfectil. I think there will be more and more opportunities for them to go into new areas in a calculated way. I don't think they will go into an area that they think they can't prove the science on. I think that's probably why they've been reluctant to go into some of the more faddy bits like nootropics and CBD with quite the same force as they have in other areas, probably because they don't want to water down the brand perception, would be my guess.

I would certainly say they could probably do more around trying to get that route to market, trying to go direct-to-consumer. I would certainly say that replicating the success they've had in some of those missions I mentioned into newer ones where they think it is right to do, I think, is probably another area they could push hard on. I do wonder whether they have been quite restricted on what they do in terms of sticking in that vitamin line. I do wonder if there's any opportunity to think a bit more lateral and go into food a bit more, for example, or something like that or beauty in a more deep way. Could you embed some of their products into shampoos as an example? I don't know if I see them do that side of things. I can see a few ways where you can now leverage the market, particularly in an established market like the UK. Beauty is the obvious sideways step, as is food. Could you deliver that product into those kind of things and therefore, start going a bit horizontal with your customer base that you've already got a lot of trust and respect with? I think trying to do more direct-to-consumer, trying to leverage your e-commerce operation gives you way more latitude to do that as well.

00:50:30] Is the D2C model just a margin play, or would it offer an opportunity to draw new customers to Vitabiotics vs switching existing retail channel customers to direct?

RA [00:50:45]: Yes, both would be my guess. I would guess there is probably somewhere in the region of 10% of difference on margin between those two would be my guess. Subscription, definitely like Amazon's Subscribe & Save-type thing, I think there's definitely some (inaudible 51.04) that. I think they can definitely access new customers, you're absolutely right. Yes, I think trying to go more direct – they've got such a well-established brand, trying to remove their dependency on a Tesco, a Holland & Barrett, would seem like a logical thing to do.

00:51:25] What gaps do you think Vitabiotics might look to fill within the more traditional VMS category? You mentioned beauty as a parallel play and preferably avoiding fads or short-lived trends, but are there any established opportunities it could be more involved in?

RA [00:51:55]: I've seen less from them around gut. Gut health is definitely one that Holland & Barrett were making a lot of inroads on. Maybe probably see less in terms of fitness-related stuff. I don't know whether they'd have any aspirations to go into protein or things like that, but again, you have to find a way to add value in that space because people like Myprotein and Holland & Barrett… Protein is a fairly commoditised thing. If there is always a way to leverage vitamin into that, that might be an opportunity. I think probably gut is maybe the one that stands out. There is a lot more interest in sleep now as well and supplements to help you sleep, those side of things maybe, too.

00:52:54] Is there an opportunity for Vitabiotics to further premiumise its portfolio through innovation vs price increases? Can you further elevate products such as Pregnacare?

RA [00:53:16]: Yes, I think if you are to look at some other industries, I think they probably don't have that. They're clearly premium, they're positioned as premium without doubt, some of the vitamins lines they've got, you look at the prices and how they compare to even Holland & Barrett, which itself is an expensive brand, but certainly against the commoditised version, they're expensive. They don't have a super-premium line, I would say – I can't remember the name of the brand. They definitely don't have… They could potentially go into very premium. They could try and skim off the proportion of their customer base that is even more affluent or even more engaged and try and do a really enhanced, more premium-positioned line, I think that would be quite a natural step for them. That's definitely one I could see that they could leverage further. Really playing up premium packaging, really playing up the science angle, the outcome angle, they could probably do a premium version of a lot of the things they do and target that kind of 10-20% of the customer base that has that sort of spend capacity. That's probably one they could push a bit harder.

00:54:56] What are your thoughts on Vitabiotics' opportunity for international growth? How easy or difficult could it be to expand the portfolio internationally?

RA [00:55:14]: I think they probably want to do something not dissimilar to what they've done in the UK. They probably want to go in and find a partner to work with that would showcase the product physically. H&B had a lot of success with some of the brands in terms of doing this via pharmacy networks. Certainly, where they were looking at the international businesses, I think this is all in the public domain, but they would try and partner with pharmacies and organisations like that. I think when you stock a health-related product at a place that sells drugs, the perception is it is a medical product rightly or wrongly, and I think that kind of route to market is certainly working well for them. I think in Greece, the Baltics and then also into the Middle East, that was a good entry point.

When you put it in the supermarket, (a) there's a lot of competition, but (b), particularly when the supermarket doesn't necessarily put it in the healthcare aisle, the perception is slightly different. I think being able to position as a premium going down that pharmacy route was definitely helpful. The challenge is, Tesco has more eyeballs and Carrefour has more eyeballs than the pharmacist chains do. You're restricting it, but you are able to position it as a premium product still. I think D2C is clearly a big opportunity there, finding good local partners that they can replicate a David Gandy, a Tess Daly-type relationship with is important. They're less active on social media. Again, I don't hate that because I think that's probably where the faddy perception comes from. I think they probably want to be a bit more targeted on that side of things.

Middle East was another area H&B were pushing quite a bit through the franchise business. Again, that's prominently through… Pharmacies were quite important there, but also storefronts were as well. I wonder whether there is an opportunity for them to take small, temporary storefronts in key markets internationally. In key cities in China, key cities in the Middle East like Dubai, could they potentially operate their own storefronts either on a permanent or a semi-permanent basis? You don't need to be everywhere. I think if you can be in the right urban centres, it almost doesn't really matter what the unit sells because the perception starts to grow then. I think that kind of partnering with pharmacies definitely works well, albeit it's a slower burn, but that gives the brand a bit more science-based medical-based linkage. I think trying to find the right domestic partners in each market, to replicate the success in the UK, I think there is clearly some role for social media, but they need to tread carefully on that side of things. Like I said, I do think acquisitions could give you a good opportunity for them in international markets and trying to put other brands under their portfolio, their platform, I think that would work quite nicely.

00:58:52] What competitive threats might undermine Vitabiotics' premium positioning? How can the company sustain its premium positioning?

RA [00:59:18]: I think, as trends come, they need to respond to them because I think you can see a market split. You can see a multivitamin market split by a gut health mission and whatever it may be, you can see market split like that. Keeping an eye on those trends, I think, is important. I think the D2C businesses, like I mentioned, like Heights, but also some of the other ones. I see the ones linked to the arm patches quite a lot now, like Zoe and those ones where those kind of things are potentially a bit of risk for them, and they are talking to the same premium segment that they operate in. I think within the core established brands, I think they've got a pretty good moat there in the UK market at least. I think maintaining those brand partners, doing everything they're doing, keeping it going, I think, is good. I think it's more around as these new trends, these new areas of interest open up, making sure they've got something credible to compete within those because I'm not sure Wellwoman would necessarily compete well against a gut-specific solution or something like that as an example. I think it's that splitting of the more generic stuff in their portfolio. I think things like Pregnacare, those kind of things are going to be okay. I think it is the more generic, Wellman, Wellwoman-type brands that I can see getting fragmented as specific use cases emerge underneath.

Vitabiotics is a great brand. Really got a good runway ahead of them. I'm sure it's going to be very successful under new ownership.

AS [01:00:49]: Thank you very much for your time and insights. It's been very informative and very helpful for us.

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