DrinkHealthy Shop (DHS) Report

Introduction

The company DrinkHealthy Shop (DHS) is in health and wellbeing industry in the UK competitor. A competitor of Holland &Barrett, a leading company in the industry. The planned introduction of new products is discussed outlining the market trends and potential growth. The products two types of vitamin and Nutrient (low calorie) drinks the company is planning to introduce will be two 290ml bottles of basil seed drinks. However, because of the company’s corporate social responsibility (CSR), packaging will by canned for type 1 and paper carton packages (paper cup and composite can) for type 2. The report is structure to cover the market outlook that include the market channels and trends of vitamin and nutrient (low calorie) drinks consumption in the UK, especially in relation to basil seed drinks. It discusses the procurement profile of the basil seeds, logistics required, risk involved, and mitigating mechanism. Lastly, it conclude by drawing from finding the viable approach the making recommendation on the seeds that will be competitive in the market. If you are seeking business dissertation help, consider exploring how all these market trends and CSR initiatives can impact the success rate of new product introductions such as basil seed drinks.

Market Outlook

Vitamins market is estimated to be worth £500 million in 2020, Vitamin D accounted for 38% of the VMS (Vitamin, Mineral, and Supplement) users, a rise by 8% from 2019. Moreover, new products containing vitamin D increase by 20% as companies respond to market demand. However, over the same period, vitamin A is the only other category that saw an increase in consumption a rise from 28% to 29% while the other vitamins saw a drop in consumption with Vitamin A dropping by 8% to 11%, Vitamin B to 16% from 20% (a drop by 4%), Vitamin E dropped 4% from 10% to 4% (Mintel 2021). The change is attributable immunity and memory improvement as well as COVID-19 outbreak, government recommendation for people to boost their immunity as a preventive measure. Moreover, survey show consumption is driven by focus to live a healthy lifestyle and healthy diet- decline on certain vitamins. The vitamin industry is expected to grow by 13% to £559 million by 2025. Statista indicated that revenue per person stood at £5.6 in 2021 (Statista, 2021). Increase in consumption and demand exert significant pressure on supply chain of the products and raw materials (ingredients) especially January and July of 2020 (Euromonitor, 2020).

Growing fortified and functional drinks use of these supplements and vitamins has been a driving factors. Globally, basil seeds has seen a steady growth and poised to have a compound annual growth rate (CAGR) of approximately 5% from 2019 and 2023 a growth by $92.37 million. The market remain fragmented with several players with company such as Enza Zaden Sakata, David’s Garden Seeds, Sustainable seed company, Satvikk Specialty Foods, and Holy natural being key market players. The industry is segmented into seed type (organic and inorganic basil seeds), and geographic landscape (Americas, APAC, and EMEA), and product type include Sweet, Scented, Holy, and Purple Basil seed. The UK market falls under European geographic segment (Coherent Market Insights, 2021). In terms of the Basil superfood category, products free from sugar, lactose, and preservatives and unique flavour and texture, the following table outlines the basil change over time and penetration ingredient between 2013 and 2018

Product procurement profile

Increasing demands from functional healthy beverages and pharmaceuticals including other myriad applications makes the seeds of higher demands in the market. Harvesting and storage of the seeds require special maintenance to ensure freshness of the product and shelf-life the transportation to the market. Individuals include farmers producing and exporting basil products are required to comply with Global Good Agricultural Practices (GAP) Certification. In 2020, Germany was the top exporter of the basil while the US was top importer. However, the valuation growth in the past 1 year and 3 years were increase by +16.36 and +34.94% respective second to that of Canada. Egypt had the dropped by -53.46% and -52.87% over the past 1 and 3 years respectively. Similarly, Thailand basil seed market saw near similar drop in valuation over the same period. The global average wholesale price remained relative stable selling at ($5.24).

Due to the pandemic, the export quantity and price dropped globally. In term of imports, the US, Germany, and China were leading imports globally in 2020

In 2020, due to COVID-19 pandemic there was a drop of the seeds values as well as volume to approximately $1.64 billion and 300 kmt.

Global Export Trends

The UK import stands at $71.18 million with the seeds coming mainly from Spain and Germany.

Logistics: Suppliers

Because of the price valuation as well as the seed variety in Egypt and Thailand markets, the logistics and suppliers is analysed. In Thailand, Nanapan-agri trade CO. Ltd registered Aug 2019 as basil seeds supplier, is a major player in the market. Established in 1769, the company based in Thailand. It is a manufacturer and producer. The company is certificated with CODEX GMP:2003 BSI – Quality sanitation , HACCP for food packaging, and TUVRheinland for quality food safety.

Alfa Herbs is an Egyptian company offering supplier and logistic services of basil seeds. It know for providing high quality basil seeds purity of 99%, admixing 1%, 5% moisture. It does packaging:- packing 25 kg pp bags and shipping methods 13 metric tons. It been in exporting of the seed for more than 15 years. The company is certified with QACS International for processing and packaging of herbs, spices, and herbs and HACCP

Risks and ways of mitigation

Changing market: with more people getting vaccinated against the corona virus, the end of the pandemic that was a major driving factor may lead to drop in demand. In addition, increasing market share in Asia Pacific may cause the prices to increase significantly. The effect of the COVID-19 pandemic on supply chain system include logistics and transportation. Increasing demand for non-GMO basil seeds can trigger lowering in quality. Also, farmers regulate sales to multiple ends users.

Conclusion and recommendation

Popularity of basil plant particularly seeds and leaves as herbal plant with important health benefits in Asia Pacific (India and China) are the driving factor to high and increasing prices. The growth of VMS consumption and shift to healthy lifestyle are major factors driving growth in demand. Healthy and natural benefits on hair and skin contained by sweet basil seeds is expected to result in higher demand of the seed type. Moreover, demand for organic type in expected to increase to consumer preference for organics and natural food products.

Globally, distribution channels are segmented into online stores, specialty stores, and supermarket and hypermarkets. This is due availability of the seeds in these platforms and stores. However, according to Businesswire (2021), high prices of the seeds will be a major factor hampering its market growth. Asia Pacific is poised to gain significant market share due to forecasted demand. The company should have import Thai Basil seeds from Thailand as type 1: for basil seed drink with lemon juice because of their popularity and cheap prices in Thailand. Then, for type 2, it should import sweet basil seeds from Egypt. In addition to offering cheaper market prices, the two countries have already established and certified logistics network and supply companies. Lastly, the shipping structure fits the requirement of 7*20 ft containers required by the company.

Reference

Business Wire, 2021. Global Basil Seeds Market 2019-2023| Health Benefits of Basil Seeds to Boost Demand| Technavio. [online] Businesswire.com. Available at: [Accessed 31 March 2021].

Coherent Market Insights, 2021. Basil Seed Market Size, Trends, Shares, Insights and, Forecast - 2027. [online] Coherentmarketinsights.com. Available at: [Accessed 31 March 2021].

Euromonitor, 2020. Vitamins in the United Kingdom | Market Research Report | Euromonitor. [online] Euromonitor.com. Available at: [Accessed 31 March 2021].

Mintel, 2021. Brits spend £500 million on vitamins and supplements. [online] Mintel. Available at: [Accessed 31 March 2021].

Statista, 2021. Vitamins & Minerals - United Kingdom | Statista Market Forecast. [online] Statista. Available at: [Accessed 31 March 2021].

Take a deeper dive into Distinguishing Between Strategy and Plan for Effective Execution with our additional resources.