Saviq: Honeypot market

Having spent a decade or so equipping hapless males in the dark arts of shaving, moisturising, and hair styling, entrepreneurs Shane Young and Anthony Gadsdon of Mix Limited have pretty well conquered their corner of the market. Now they've got a new venture underway, with the help of a secret weapon.

mix limited saviq idealogHaving spent a decade or so equipping hapless males in the dark arts of shaving, moisturising, and hair styling, entrepreneurs Shane Young and Anthony Gadsdon of Mix Limited have pretty well conquered their corner of the market. Now they've got a new venture underway, with the help of a secret weapon: the humble honey bee. Ladies, watch out.

Thanks to the ‘menaissance’ (aka rise of the metrosexual) men’s grooming has enjoyed a serious boost over the past decade. Helping guys take better care of themselves is a noble cause indeed, but no matter how fast it grows, there’s no chance of ever matching or overtaking women’s collective beauty spend.

So, having cut their teeth on a handful of male-focused product lines, Mix Limited’s Shane Young and Anthony Gadsdon are turning their entrepreneurial sights to the fairer sex. Their new brand, Saviq, is the result of a savvy mix of science and marketing. The magic ingredient? Bee venom.

Guys in a garage

Back up a little – say, 12 years or so – to when Young and Gadsdon first met. Young owned a few salons around Auckland, while Gadsdon had experience in the supermarket industry. They saw a market opportunity for a tough- wearing hair wax, and armed with little more than a credit card and a $200 washing machine pump (to pour out the hair wax into pots, obviously), they set about making it.

That became the Dominate brand – now a top seller in supermarkets here and across the Tasman – and was quickly followed by the launch of natural skincare line Primal Earth, marking Mix’s first foray into the growing ‘green’ space.

PHOTO: Jessie Casson

Dominate and Primal Earth are now both sold in Singapore, which Young says triggered their “laser focus” on a new export-ready product opportunity – a move into women’s skincare. They’ve timed it well. According to market research firm Euromonitor International, ‘masstige’ products (which claim similar benefits to premium brands but at a lower price – see sidebar, next spread) are starting to make real inroads into the New Zealand market, particularly in the anti-ageing category – and skincare is the biggest category in the global beauty market and continues to rise, driven by growth in Asia.

Skin deep?

Saviq is the result of two years of painstaking research. On one hand, it’s a typically Kiwi proposition: natural, organic, good for you. But as Young explains: “Green chemistry sounds nice – everyone loves the values around it – but it’s very challenging around stabilising formulas.” Preservatives are a no-go, as are other chemicals traditionally used in beauty products that we’re only now starting to wise up about.

Fortunately, a couple of things happened that kept them on the right track.

“As we were getting through the project, bee venom hit the media with the royals and Kate Middleton, and got a lot of traction. It very quickly went viral. [Middleton was said to have been using a pricey bee venom facial mask prior to the royal wedding.]

“We thought, let’s have a look at it see and if it’s a just a magic marketing ingredient or whether there’s some substance behind it.

“We spoke to some people who told us about some people who told us to go and speak to this other guy ... We eventually came back to the source, this guy who’s actually doing the venom harvesting, Dr Nikolai Nikolaev. He’s actually patented a safe and ethical method for harvesting bee venom that doesn’t hurt the bees. Matter of fact, they love it.”

Nikolaev, a Russian scientist, lives in Auckland and has patented his bee venom collection technique both in New Zealand and Russia. The process starts with bees stinging a glass pane inside a hive, from which their venom is extracted. This is then purified and mixed with manuka honey, which reduces the potential for an allergic reaction. It takes 10,000 bee stings to make a single gram of highly purified bee venom, so it’s a substance that’s literally worth its weight in gold.

Young says there’s a symbiotic relationship between bee venom and honey.

“There’s an old wives’ tale that if you get a bee sting and rub honey on it, it would actually take it away. And what they’ve found is when the venom is mixed with the honey the allergy effect goes down and the healing effect goes up.”

Nikolaev is the founder of ApiHealth NZ (the practice of using bees or bee products for medical treatment is known as apitherapy), which is the main commercial supplier of bee venom in New Zealand, and offers its own range of natural products and supplements, including a bee venom mask.

“He’s the real deal – a real boffin, very smart,” says Young.

The pair were dubious at first – the use of bee venom dates back to ancient medicines, but its use in skincare is relatively new.

“We went in quite cynically to start with but we got some amazing results. We started our own internal trials and it actually does work.”

Active bee venom is being touted as a kind of natural Botox, helping to firm up skin by stimulating the release of collagen and elastin. Young says it works to dissolve cell membranes, allowing other active ingredients to be absorbed and work their magic.

Other brands are also jumping on the bee venom bandwagon, although Young plays up the fact that Saviq is ‘owned’ by Mix from end to end, made in their own factory, and with the support of dedicated cosmetic chemist Nikolaev. And being able to develop and test products in their own lab is a strong advantage, according to Gadsdon.

“We’re all trying to grow a brand new category,” Young says. “Two years ago bee venom in skincare didn’t exist. It did exist prior to that with Nikolai in a medical product – it has been shown to help with arthritis.

“We feel like we are pioneering it a little bit – a new ingredient into a new space – but I think there’ll be many more to come.”

He adds: “We get asked the same three questions: What does it actually do? Will I be allergic to it? And do the bees get harmed?

“We can’t find anyone who’s ever had a reaction. It’s a really complex ingredient but it’s delivering some real, visible results.”

saviq mix limited idealog

What women want

On the branding side, Mix has taken a very deliberate approach to crafting its packaging and even tweaking the product formula for export markets. Gadsdon says the key to export success is to be flexible and quick to adapt.

“You can’t expect to sell the same product you’re selling in New Zealand and expect to sell it in every other country in the world without changes,” he says.

Young says consumer expectations vary hugely by geographic area: “The pack format – whether it comes in a pot or a tube, even if it’s the same product – can be the difference between whether you’re going to sell or not.

“America’s quite different – even though we sort of think they’re quite similar, their consumer habits are quite different again. It’s why we’ve had to spend a lot of time in market to understand what sells, what are the price points, what customers’ expectations are around performance, sensory, packaging ...”

In Asia, their packaging has a lot more ‘bling’, he says, and favours silver over gold. In Singapore, product formulas need to be much thicker to withstand the heat and humidity, while up in Japan or northern China, a thinner formula is better suited to the cooler climate.

“We take all these small in-market details on board.”

All systems go

“What we’re finding is that as organic products are growing, so is greenwashing,” Young says. “Being third-party validated is becoming more important and consumers are getting more and more educated.”

The rub: there’s no one global standard – various geographic regions have their own certifiers – which poses a challenge for brands that want outside validation. In this case, they went with French-based EcoCert, the largest and the first certification body to develop standards for natural and organic cosmetics back in 2003. Saviq is the first complete New Zealand skincare range and first bee venom range to be certified organic from source to skin, as well as the first New Zealand skincare range to receive the EcoCert seal. EcoCert staff flew to New Zealand from its regional office in Japan to audit the Saviq factory, systems, and processes, checking raw materials and random product samples.

“It gives us another tick now that we have gone through those hoops,” he says, adding that the initial pain will pay off in the long run – and hopefully force other manufacturers to raise their game as well.

Research indicates customers aren’t entirely sure what natural or organic actually means these days. As a result, Young says they’ve adapted some of the marketing material for Saviq to better educate buyers, emphasising that its formulas are derived from verified 100 percent organic sources without harmful substances and don’t include mineral oils, sulfates, parabens, fillers, or other nasties.

Understandably, while consumers might be intrigued by the bee venom phenomenon, they’re equally likely to be wary of actually using the stuff on their faces. So Gadsdon and Young devised a numerical system that ranks each different Saviq product on a scale from one to eight. The higher the number, the higher the level of bee venom; the daily cleanser clocks in with a rating of one, while the face mask displays a rating of 8. It’s not unlike the UMF (Unique Manuka Factor) system used in manuka honey products. And they’ve trademarked the system throughout Asia, as it’s a core target market.

“One of the things that’s come up really loud from people is that skincare’s gotten so complicated now. There are 10 types of moisturiser and day cream ... so we’ve gone to market with a basic system.”

That means focusing on ‘hero’ products rather than endless varieties that ‘clutter’ the message.

Taking stock

After more than a decade in business, Mix has grown to 30 staff. Young handles development and operations; Gadsdon looks after sales and distribution. Their products are sold in 3,500 stores through Asia, the Pacific Islands, Australia and even Mauritius. E-commerce extends their reach online to about 30 countries, including the US and UK. Nearly three-quarters of revenue comes from export, in particular to Australia.

“We’ve had some export lessons in what not to do,” laughs Gadsdon. There was the time they nearly went broke, for one.

“We sold too much and weren’t too sure how we were going to pay for it. Turns out it’s a pretty common thing, when businesspeople haven’t planned out their cash flow well enough to be able to buy raw materials.”

Getting into Australia, on the other hand, was a major coup early on. So what was it like being a Kiwi company selling to the Aussies?

“Looking back with what we know now, it’s a very tough trading environment in Australia,” Young says. “The Aussies are very smart. They’re also globally hardened to what you have to do. But we love Australia, they’re our biggest customer.”
Adds Gadson: “[The Aussies] have got high expectations but if you can deliver what they want it’s a great market to be in.”

Being a Kiwi brand has absolutely helped, says Young – “people want to see Kiwi companies do well” – and other New Zealanders in the global market are always happy to help out fellow homelanders. In the skincare space, it’s still a point of difference. “New Zealand is still under-represented in the wider Asian markets. Xinxilan [New Zealand in Mandarin] is very well understood for purity and safety and commands a higher price point.”

Mix now oversees five brands, the biggest being Dominate (the top selling men’s haircare brand in supermarkets, and the third largest in Australia behind V05 and L’Oréal) followed by Primal Earth.

The hope is that Saviq will propel Mix to the next level. It launched in late 2012 – a time when retailers traditionally go hard on discounting – but they’ve resisted taking that path and Young says initial sales are looking promising. “We’ve got some big expectations in terms of where we want to take it. We’re looking for partners through Asia – we’ve developed the range with export very much in mind.”