Many companies stubbornly pursue the same strategy year after year, which turns out to be the fate of many. Others understand that the world is changing and recognise the need to evolve.
Aromtech, a Finnish health products company, is a model example of a company that knows how to reinvent its skin when the situation calls for it. Aromtech used to be a purely B2B company, but the changing world drove the Tornio-based player to the consumer side.
A few years ago, Aromtech started to build its own Membrasin brand, which has been used for a long time in some of its target markets, such as Sweden and the Netherlands. Membrasin is a natural range of products for dry mucous membranes, skin and eyes based on scientific research. The range includes both medical products and dietary supplements.
This year, Membrasin started to build the brand with with Foppa’s marketing growth funding. According to Helena Korte, CEO of Aromtech, Foppa has been an excellent choice as a partner for a brand that is aiming for strong growth.
“We wanted to partner with Foppa because they have the marketing expertise, the know-how and tools to buy media space effectively and the capability to minimize our financial risks as marketing repayment is aligned with sales growth. Why pay for marketing on short-term payment terms when the return is longer term?” says Korte.
Despite the challenging global situation, Aromtech has been clear that the marketing of the Membrasin brand requires significant investment. Foppa’s financing model provided an easy solution.
“We understand the need to invest in the brand for the long term – especially now that the world is less predictable. In Finland, it is typical to invest heavily in product development but not enough in the next stage, marketing. Commercialisation is as expensive – if not more so – than product development, and this is not ingrained in the Finnish mentality. There is also a fear of risk-taking,” Korte continues.
Last spring, Aromtech launched a campaign with Foppa that made strong use of mass media. Membrasin was seen on TV, digital media and in print. According to the campaign measurement, Membrasin became the second best-known brand in its category in Finland. During the two-month campaign, sales increased by 96%, and in the second month the increase was as high as 156%.
Significantly, consumers have also noticed one of the brand’s greatest strengths: research. The campaign was successful in communicating this important criterion to consumers well, with 71 % of campaign respondents saying they were impressed by the researched product.
“The success of the brand’s products is driven not only by the fact that they are clinically proven and effective, but also and above all by their suitability to today’s demand. People are interested in looking after their health, sustainability, circular raw materials and zero emissions, natural and plant-based, all of which are at the heart of our products,” says Korte.
B2C marketing was a must
Originally, Aromtech’s operating model was to manufacture products for distributors under either the Aromtech brand or a partner’s brand, but the distributor has had complete freedom in terms of brand image and marketing. This meant that the company did not have to invest in consumer marketing itself. However, digitalisation meant that distribution partners no longer invested in consumer marketing in the same way as before.
“In the past, distribution partners invested more in marketing when the trade was mainly conducted in their own market, but with digitalisation, consumer trade does not look at country borders and therefore manufacturers have a greater role in marketing. In today’s world, we have to invest in the brand, because no one is doing it for us”.
So far, Aromtech has invested in consumer marketing in Finland with the help of Foppa, but in the future the partnership may also cover international marketing. Sweden and the US, for example, are important markets for the brand.
Membrasin products are sold in dozens of countries, and sales figures are exceptionally impressive, especially in the US, where total sales have already reached the $20 million mark this year.
“Since the beginning, sales have been made on Amazon and the distributor’s own online store, and this year the Walmart online store has been added. Next, our products will be sold in the pharmacy chain CVS Pharmacy. The strong visibility of the brand has generated a lot of contacts for us, including interest in buying the brand,” reveals Korte.
Amazon is the world’s largest online retailer, while Walmart is the world’s largest retailer. CVS is the world’s largest e-commerce player in the pharmaceutical sector.
75 % of Aromtech’s turnover comes from exports, while Membrasin accounts for almost 40 % of the company’s turnover. Half of its turnover comes from products for other brands.