Sunday, May 31, 2015

Learning lessons from Comvita

Stuff, 5/31/2015

Behind Comvita's excellent year-end results lies a long story of how it has learnt to create and capture value in health products.

As it transformed itself over the past decade, sales have increased four fold and its operating profits almost five fold.

Comvita has a simple way to show what value creation means. At the rock bottom end of the scale sits 250 gm of an utter commodity it doesn't sell – generic, unbranded honey. A jar of it is worth only $5.

But the same quantity of manuka honey in a branded Comvita jar is worth a lot more. Depending on its Unique Manuka Factor, a scientific way of measuring its health benefit, the price ranges from $14 for UMF 5+ to $104 for UMF 20+.

On up the chain, the 250 gm of raw manuka honey is worth $250 in throat lozenges, $330 in an antibacterial gel used to treat severe infections in wounds, and $500 in skincare products...

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