NutritionInvestor talks to UK-based liposomal supplements company YourZooki about making a business profitable in under three years, the trends in the market, and growing the company at home and in the US with debt finance instead of equity investments
By Murielle Gonzalez
People’s attitudes towards supplements are changing – and Marcus Mollinga, founder and director of liposomal supplements company YourZooki knows this from first-hand experience. As with many start-up founders, Mollinga started the business to solve a problem for himself. “The idea came about shortly after finishing school when I suffered a serious knee injury playing rugby,” he tells me. Mollinga had to take large amounts of fish oil as part of his rehab, but the whole experience put him off. “The capsules were awkward, unpleasant to swallow and caused fishy burps,” he says.
Mollinga joined forces with long-time friend Jack Morrison and the entrepreneurial duo embarked upon a journey to create an Omega 3 product that tasted nice, removed the need for large capsules – and didn’t result in fishy oil aftertaste. “We always bounced business ideas off each other and quickly saw an opportunity to shake up the global supplement industry, which seemed to mostly contain mediocre powders, sickly oils and generic pills,” he says.
The dietary supplements market is huge. The latest PwC report on this industry showed the global market had grown at a rate of 6.3% in the four years to 2018, reaching $110 billion. This growth accelerated with the onset of the Covid-19 pandemic and the market is estimated to be worth $156.2 billion last year, according to Nutrition Business Journal.
YourZooki launched in 2017 with Omega 3 Zooki as its flagship product. The co-founders came up with the brand name ‘Zooki’ to describe the delivery method. Mollinga explains: “It’s so that customers can see the name Omega 3 Zooki, Vitamin C Zooki, and so forth, and know it equals improved bioavailability, good taste and natural ingredients.”
The Zooki range is complete with vitamin D, collagen, and glutathione. These products are sold in the UK since the company started, and in the US since January. YourZooki also sells a range of CBD oils – cannabidiol.
A TV breakthrough
For Mollinga, there was clearly demand in the market for great tasting fish oil that didn’t involve swallowing uncomfortable gelatin capsules, but the question was how YourZooki was going to get the word out. The answer was national television.
The company secured a listing on QVC, a television shopping channel broadcast in the UK, and the show’s nationwide reach allowed the brand to be seen by consumers up and down the country. “We were given a seven-minute airing to test the waters and to our amazement, the phone lines went ballistic. We sold out straight away,” says Mollinga.
Soon after the show, the company attracted the attention of some national retailers, and today the brand is sold at Holland & Barrett, Boots and at GNC in the US since January. Mollinga doesn’t disclose sales figures but explains that since founding YourZooki, the business has enjoyed consistent growth. “This is now our third year in a row where we have more than doubled our annual revenue.”
Mollinga argues YourZooki’s success story stem from its obsession with delivering an enjoyable experience to the consumer. “We’re obsessed with delivery systems, flavours, textures and the impact our products can have, all the things that the big commodity brands tend to overlook,” he says. “We design our ranges with all these things in mind: experience, bioavailability, taste and natural ingredients, so consumers have something that not only works, but they look forward to taking every day.”
YourZooki: A family business
All YourZooki supplements products are manufactured in the UK. The company began in Preston, Lancashire, and engaged local suppliers. Raw materials are purchased from all over the world, particularly the US and the EU. Last year the company moved to bigger premises in Blackpool – Morrison’s hometown.
The company claims it only uses 100% natural, sustainably sourced ingredients and places particular emphasis on avoiding ingredients such as potassium sorbate, sodium benzoate and alcohol that are typically found in liquid supplements. And individual sachet servings ensure that no oxidation takes place and that each serving is as effective as the last.
Liposomal formulations are another distinctive feature of the YourZooki brand, but why? Mollinga explains: “Liposomes have been shown to aid the absorption of nutrients and when it comes to supplements that’s crucial.”
Liposomes were first discovered in the 1960s by British scientist Alex Bangham and since then have been used largely in the pharmaceutical industry to improve the bioavailability of active ingredients in drug products. Mollinga notes that it’s only in recent years that liposomal delivery systems have been applied to supplements. “With YourZooki products, we expect that trend to continue,” says Mollinga.
Growth beyond Covid-19
US-based market research firm IRI reported this month that sales of vitamin, mineral and supplements increased by 21% since the onset of Covid-19. YourZooki, like many supplements brands in the market, had to cope with the upward trend in demand from at home and abroad.
“Even before the pandemic, consumers were becoming increasingly health-conscious, and it has only accelerated since,” says Mollinga. People are further educating themselves on vitamins and nutrition, so there’s a real opportunity for businesses that offer unique delivery methods and great user experience in the supplements space.”
YourZooki was manufacturing one million sachets a week to keep up with demand. “We were already growing at pace, and Covid-19 helped us to rapidly accelerate brand awareness for the specialist products we offer online,” says Mollinga, noting YourZooki is a family business. “My and Jack’s families are both heavily involved in the business. Even helping us pack and ship orders, so we’ve been keen to keep our local roots.”
While it may seem the business is booming, the journey has not been easy. “One of the biggest challenges we faced recently has been growing our online offering, especially in the face of events like Brexit, which has obviously thrown up a few hurdles,” says Mollinga.
As with many other exporters into the EU, Brexit caused significant disruption at the start of the year, but Mollinga says the company is in a good position because YourZooki established operations in Ireland and the Netherlands to prevent ongoing issues.
Profits grow the business
Mollinga says YourZooki is a profitable brand and that right from the start the strategy has been to keep the business lean, reinvesting profits into growth. This approach, Mollinga says, has enabled the company to use debt as opposed to equity finance.
Last year, YourZooki secured £300,000 from the Lancashire County Council’s Rosebud Fund, and £950,000 from Investec. In February, the company agreed to a £1.6 million deal with Metro Bank. Mollinga says these funds will help to launch new products, grow the team, expand production facilities, and target expansion in North America. “YourZooki is at a crucial stage of growth, so we have been keen to secure investment that allows us to keep growing, but also to retain control of the company,” he says.
Mollinga has his sights set on consolidating the expansion of the business – and is targeting the North American market for a good reason. “The interesting thing about this market is the appetite for innovation. If you have something that’s different, [North American consumers] are extremely interested to learn more. Sometimes in the EU, it feels like the instinctive reaction is one of caution, so it can take more time to get people’s attention.”
He reveals the dietary supplement market in North America is projected to reach $53 billion by 2023, and YourZooki’s listing with GNC has opened up access to it.
“That’s not to say that doing business in North America is smooth sailing – you have to get your timing right,” says Mollinga, noting that in the early days, the attempt to expand to the US was somewhat naïve as the business was not ready for it.
“We learnt some valuable lessons from that, and with our recent investment, we’re in a good position to take advantage of the initial success we’re seeing in the region and further grow our US and Canadian presence,” Mollinga concludes.
Date published: 4 March 2021