Solid Market for Generic Alimentary SupplementsWed, 09/09/2015 - 16:17
In 2000, Industrias Suanca was founded as a generics pharmaceutical laboratory and today the company offers a wide range of products including injectable medications and tablets, and has now expanded into alimentary supplements. In accordance with Good Practice Regulations laid out by COFEPRIS, Suanca separated these two lines, contracting a third party to manufacture the supplements. The separate company was named Vitapromin, allowing the separation of these two elements, and enabling the new company to sell under the Codifarma brand.
José Luis López, Director of Administration and Finance for Industrias Suanca, explains that the company principally sells to the public sector. To be able to sell to the private sector the company would have to invest heavily in advertising, slowing long-term growth. The company operates a full line of products born from the Vitapromin supplement, which consists of a combination of vitamins and other nutrients, both in powder and liquid forms. Subsequently, the company has created more products aimed at the private market including Vitapromin Kids, and GlucoPromin. The two product launch into the private sector has been slower, yet GlucoPromin has assumed a position in the market, largely due to its reasonable price in comparison to direct competitors, whose products tend to be imported and in liquid form, which is more costly to transport. The high number of diabetic patients requiring this type of medication maintains a constant client base.
The biggest competitors facing Industrias Suanca are international companies, possessing a considerable body of merchandisers with hundreds of medical representatives. While the Mexican market is heavily oriented toward brands, the equivalent product Ensure is priced much higher, limiting access for some customers out of which Industrias Suanca has built a strong client base. A customer can save 25% of the cost of buying Ensure, which retails at at US$74 per month. Although Ensure currently occupies 95% of the market, customers continue to demand lower prices and Industrias Suanca is confident there is a market gap. Pharmacists cannot recommend products with different ingredients to those requested but doctors at the point of sale can prescribe a variant, which allows Suanca to penetrate the OTC market.
The company is also beginning to sell via a Farmacias del Ahorro initiative called Diabetics’ Corner. Walmart is the largest distributor of Suanca medications and supplements, and so convinced of the strength of the Suanca’s products, the supermarket giant would like to acquire the formulas to produce an own brand version. López says that the company has no interest in selling the brand, but points of sale remain limited. As a result of the distribution costs involved in selling directly to small pharmacies, the first sales point is usually the Central de Abastos market place, from where products are resold to private doctors and small shops, making sales monitoring complicated.
Suanca works with an external assembly plant to package their products. High standards of production and hygiene must be assured beforze contracting any health sector distributor. Industrias Suanca also monitors raw materials and attains certified products, as well as employing a quarantine periods. However, the conservation of high quality standards is not difficult for the company, due to experience following more stringent quality measures selling pharmaceuticals. Suanca’s business model requires to very clear registers to monitor the production value of each product, manufacturer, price, and sales. Being able to access these documents allows the company to check patents and understand which products are being developed. Suanca intends to develop new food supplements, having witnessed the success of Glucopromin. This will include specialized products for expectant mothers to meet calcium and folic acid requirements, as well as a new supplement for mature adults, requiring a new line of investigation and innovation.
In the future the company hopes to expand into promoting their products directly to doctors via medical visitors as well as through new collaborations with pharmacy chains, as impulse buys when displayed at the point of sale or as complements to prescribed medicine. López insists that pharmacy collaborations will be the main focus for the medium term, because profound market research into points of sales is a long process.