Swedish probiotic specialist Probi has entered a strategic joint venture with the US based health and wellness company Viva5 Group. The collaboration named VivaPro will focus on exploring, researching and co-developing products in probiotic-related market segments adjacent to existing core business areas of the two companies. VivaPro will be governed as a standalone company operating out of the US.
“With this joint venture, we bring together the distinct capabilities of Probi and Viva5 in order to meet the increased consumer interest and demand for consumer friendly applications in areas such as functional food, beverages and pet health,” says Albert Dahbour, Executive Vice President at Viva5.
Viva5 Group and Probi will own 51 and 49 percent of shares respectively, and will have equal representation on the Board of Directors. Probi will have an option to acquire the share majority of the company at a later stage.
“This joint venture is an important step in our commercial efforts to address new and attractive market niches. Even in these turbulent times, we see great opportunities to jointly build a successful business, based on our longstanding relationship and confidence in our respective abilities to create scientific and commercial success,” Tom Rönnlund, Probi’s CEO, highlights.
Probi manufactures and supplies the consumer healthcare and food industry with well-documented probiotics with proven health benefits based on scientific research. Today, Probi is primarily present in the consumer healthcare market with dietary supplements and in selected food and beverage applications. The joint venture will address new and attractive market niches with the target to broaden the market reach for Viva5 and Probi.
Recently, Probi released its Q4 results in which the company reported stable performance and profitability. The results were a welcome recovery from a “weak” Q3 and managed to balance out the entire year’s performance rates. For Q4, the company reported a 2 percent rise in net sales, while net sales for the entire year rose by 4 percent. Moreover, two supply agreements and the publication of research backing the company’s flagship ingredient managed to further boost performance.
“It was a challenge that we did not achieve our long-term objective of growing faster than the global probiotic supplement market in 2019, which is estimated to have been around 7 percent. The year was mostly challenging in the US, due to slower market growth as well as in the Asia-Pacific region, where the result of regulatory measures temporarily caused a slowdown in the Chinese market,” Rönnlund told at the time.
Last year, Symrise and Probi cooperated to deliver probiotic-based cosmetic ingredients. The companies developed cosmetic products with the Lactobacillus strain which could hold particular potential for the sensitive and dry skin market. The partnership combines the probiotic expertise of Probi with Symrise’s experience in manufacturing cosmetic raw materials with functional benefits. Previously Probi also signed a long-term agreement with Cilag, a member of the Johnson & Johnson Family of Companies, for the development of probiotic products.