Website Closers® presents a company that operates in Australia and New Zealand, dominating the lowcarb and keto foods space in those countries.
The market for low-carb and keto products has seen tremendous development in recent years due to the rising health consciousness among people globally. These diets, which emphasize a high intake of protein and healthy fats while minimizing carbohydrate consumption, have gained popularity for their potential health benefits and weight loss effects. The market for low-carb and keto-friendly foods is diverse and is expected to expand as more consumers seek healthier and more sustainable ways of managing their weight and improving their overall health. Subsequently, companies have been increasingly offering a wide range of products catering to this growing demand.
This profitable business has solid fundamentals, evidenced by its ability to withstand the pandemic and periods of economic downturns and uncertainties, including rising interest rates and cost of living pressures.
The majority of products are sourced from domestic manufacturers and distributors, while the remainder is imported from the US via an importing company. In March, the business began producing a range of food items under its brand name, and in April, the brand launched ready-made meals and desserts. Many of the imported products are exclusive or semi-exclusive for the company to sell in Australia.
The business invests in a targeted marketing strategy with digital marketing comprising a substantial component of this. The business also runs an effective promotional campaign with monthly specials; many of those discounts are covered by the company’s vendors. These specials are displayed in-store and online and are also promoted on social media organically and via paid media.
Furthermore, management runs paid Google Ads and regular email marketing campaigns, especially for new products and specials. The website is well-optimized for SEO on Google and is reviewed regularly
The company dispatches, on average, 62 orders daily from its 4,000 sq. ft warehouse, which includes plenty of unused space for expansion. These include orders from approximately 5 wholesale accounts – a channel with enormous room for growth.
Inventory levels are typically stable, and around $150,000 of stock is maintained. Orders are placed daily, and management has negotiated favorable terms with many suppliers, with whom they have built excellent relationships.
Sales are healthy year-round and peak from June through October, and the typical customer is a female between 25 and 54.
The two owners jointly run most day-to-day and operational responsibilities, which include:
- Picking and Packing Online Orders
- Ordering Inventory
- Unpacking Inventory and Restocking
- Shelves and Pallets
- Cleaning
- Customer Service
- New Product Selection
- Dealing with Overseas Suppliers
- Financial Controls
They also work on various marketing tasks, such as creating email and social media content and updating SEO and SEM.
Part-time workers spend 18 hours weekly picking and packing orders.
The business has an enormous opportunity to scale, particularly as the economy and the local exchange rate improve. Management has identified locking in the distribution of imported lines with major retailers such as Coles, Woolworths, and Costco as the next major opportunity.
In addition, the company is launching an in-house brand of ready-made meals and products, and the owners intend to focus on successfully launching these in the near term. Management has identified that scaling and distributing this in-house brand represents another significant growth opportunity.
International shipping represents another prospect to boost top and bottom lines. The US, for example, dominates the market share of the niche. At the same time, Asia Pacific is expected to grow at the highest rate in the coming years. The company could capitalize on those regions’ demands and expand internationally within the next 6 months.
Furthermore, the owners have been regularly asked about opening secondary brick-and-mortar sites in other cities. This would enable in-store shopping experiences in multiple markets, increase average order values, and boost profits.
The acquisition opportunity is particularly enticing for a buyer with related businesses where cost-based synergies and savings could be achieved by reducing or removing the duplication of:
- Warehousing and Associated Costs
- Picking and Packing
- Staff IT Infrastructure
- Insurance
- Improved Logistics Rates
- Enhanced Foreign Currency Exchange and Hedging.
The acquisition opportunity is also very attractive for a buyer with related businesses where there are established distribution relationships with major national supermarket and health food chains. Such a buyer would be well suited to unlock the potential of the imported lines of the business.
