How ex-supermarket boss Tom Siebel is taking the Australian vitamin market by storm with $5 million brand VÖOST
Tuesday, July 12, 2016/
As the former general manager for Sakata rice crackers in Australia and a one-time Coles executive, Tom Siebel knows the power of an advertising jingle.
It was Siebel who bought the rights for Sakata to switch Trio’s song “Da Da Da” to “Sa Ka Ta” when the brand was making a play in the Australian market, and he saw first hand the influence Coles’ “Down Down” campaign had on the grocery sector.
But this time round, Siebel is hoping Australians will soon be dancing along to the tune of the well-known song that gave will.i.am’s a hit for the film Madagascar and singing: “I like to VÖOST it, VÖOST it”.
Siebel is the managing director of VitaminHaus, a company he founded with three business partners to bring a full range of effervescent vitamins to the Australian market. The company’s consumer brand is VÖOST, which in the space of two-and-a-half years has secured a 35% stake in the local market for effervescents.
But Siebel has his sights set even higher and that’s where the jingle comes in.
“It will be a very similar brand building exercise,” Siebel told SmartCompany,referring to the Sakata campaign.
“It takes three-to-five years to get the right cut through.”
Siebel says he is confident that in that timeframe, VÖOST will be the market leader in effervescent vitamins in Australia, which up until recently, has been dominated by just one brand: Berocca.
While there are a number of other players in the market, including vitamin B product Hairy Lemon and a small range from Swisse, Siebel estimates that before his brand came along, Berocca was holding 95% of the market.
“One brand has dominated with one form of [effervescent] tablets for 20 to 30 years. They’ve done a remarkable job educating the market,” he says.
“[But] we thought there’s a bit available for us as well.”
VitaminHaus was established in August 2013 and in that time the number of stockists selling VÖOST products in Australia has reached 2,800. This includes the major supermarket chains and independent supermarkets, as well as pharmacy chains Chemmart, Pharmasave and soon, Chemist Warehouse.
Another 1000 retail stores stock VÖOST products in the UK, including Boots, along with some 2500 in South Africa through a joint venture with local vitamin brand Vital, and prominent chains such as 7-Eleven in Hong Kong. In China, customers can buy VÖOST vitamins from 50 “virtual stores” and the larger e-commerce platforms.
VitaminHaus is turning over around $5 million annually from its standard VÖOST range of vitamins and the VÖOST isotonic sports range.
From supermarket exec to business founder
For Siebel, the path to launching his own business is built on more than 30 years experience in the fast-moving consumer goods sector.
Siebel began his career with a 16-year stint at Woolworths before moving on the becoming a business manager at supermarket chain Franklins. From Franklins, Siebel moved to Sakata, where he spent seven years establishing the brand in Australia.
“It was the highlight of my life,” Siebel says, reflecting on making the switch from retail buying to the “dark side” of supply.
“We got really lucky, we were in the right place at the right time … The [rice cracker] category just exploded from a $5 million category to a $110 million category.”
From Sakata Siebel went to Sigma Pharmaceuticals where he spent almost two years as general manager of Herron and was given his first taste of the complementary medicines markets.
This experience no doubt helped Siebel catch the eye of the management team at Coles who hired him as general manager of category marketing, a role he stayed in for 12 months.
“I was really fortunate to work with the whole new executive there who totally re-engineered Coles to put the customer first with marketing,” Siebel says.
“It really changed how marketing is done in Australia.”
Siebel counts himself lucky that he has experienced both sides of the grocery fence and he says this experience gave him confidence to venture out on his own. Building brands from the ground up, as he did with Sakata, also instilled confidence.
“It was always a dream but I had to get over the fact that I was investing real money rather than other people’s money,” Siebel says.
“So many owner-operators are so successful because they have the courage to make a personal financial investment. You’ve got to be ready for it.”
Finding that “great idea” and getting on to grocery shelves
The other essential ingredient, says Siebel, is finding that “great product” that will make the investment worthwhile.
“You’ve got to have the right to succeed in a category. If you don’t, you’re kidding yourself,” he says.
It was during a visit to a trade show in Germany that Siebel saw the potential of effervescent vitamins as a category. German vitamin brands were operating in a large, lucrative market, and Siebel says he knew Australian consumers would also quickly take to a larger range of the dissolvable tablets.
“We got the basic concept together and sat down with the Woolworths buyer who said, ‘I’ll give it a go’,” he says.
“That gave us the motivation. We didn’t have a brand or design and those took close to 12 months to develop. But we turned it around.”
His instincts appear to have been spot on, with Siebel saying VÖOST has taken close to 40% of market share away from Berocca and the local effervescent vitamin market growing at more than 10%.
“We’re driving that growth,” he says.
“Australians have really taken to it.”
As to what makes the VÖOST brand stand out, Siebel says it comes down to the vitamins ticking all the boxes for consumers, including price; VÖOST vitamins start at $6 for a tube of 10 tablets.
Siebel says VÖOST’s packaging and young personality are strengths, as is the fact the products are made in Germany, although this may change in the future as VitaminHaus plans to eventually move production to Australia.
“That’s more a medium-to-long term plan, it’s a definite desire for us,” he says, adding that it would require significant capital expenditure to set up a regulatory approved manufacturing facility in Australia.
Where to from here
When it comes to future growth opportunities, Siebel says “there’s still plenty more new products to develop” for VÖOST.
Three new vitamin products will be added to the VÖOST line next month, with another 15 products to rollout over the next 12-18 months.
“We will have the biggest range of effervescents in the world,” Siebel says.
VitaminHaus will cross the Tasman in September, while China is also a key market for the company. And looking further ahead, US consumers will also be able to get their hands on VÖOST’s range.
“There is a big, sophisticated market in the US,” Siebel says.
“We’ve scoped out the US and to be honest, there is one player there with a really bad product. There’s a great opportunity for us the expand.”
Siebel doesn’t shy from his goal of turning VÖOST into a market-leading brand. In fact, he says having that mindset it critical.
“If you think, act and behave like a leader, you will eventually become one within your category,” he says.
“Every brand or category I’ve worked in, I’ve taken the mindset of thinking like the leader in the category.
“Keep innovating up … start small and eventually you build critical mass.”
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