OVER USD94 MILLION TURNOVER

Veneto, Italy 2020 | HEALTH & EDUCATION | VIP INTERVIEW

TBY talks to Massimo Slaviero, CEO of Unifarco, on providing added value, growing turnover, and exploring opportunities in the Middle East and beyond.

Unifarco produces cosmetic, dermatological, “nutraceutical” and make-up products, with branches in Germany and Spain, as well as a sales network in France, Austria, and Switzerland. What is Unifarco's added value?

Unifarco distinguishes itself for consumers thanks to our partnerships with pharmacies. We began with the goal of giving pharmacies the opportunity to take the lead. We created Farmacisti Preparatori as an umbrella brand: the pharmacist does not just distribute the product, they also promote it. This has been a winning strategy, helping brands realize global ambitions.

You closed 2018 with a turnover of EUR94 million. Your forecast for 2019 is a turnover of over EUR100 million. What factors contributed to this growth?

Our consumer base is growing, but it has a “territorial exclusivity.” In Italy, we will increase from around 2,600 pharmacies to 3,000. We have acquired clients in the countries where the system of pharmacies is similar to that of the Italian one. First we went to Austria, and then to Switzerland, Spain, Germany and France. They are family-run pharmacies. They appreciate our promotional model. We acquire about one client per day, but also our old clients keep on growing. That is why we have an increase in our average revenue. In addition to “Farmacisti Preparatori” we also have other brands: Unifarco Biomedical, Dolomia, and we have recently acquired MyCli. We have a quite interesting portfolio cosmetics-wise. It starts from pure dermatology and gets to purely natural products. We sell these four brands through our “club” of pharmacists, as I like to call it. In the past 15 years, we have opened to food supplements. The cosmetics sector grows by 1% every year. The market for supplements grows even more. It is still a product that is spread through pharmacies, but is also expanding outside of them as well. A company of our kind cannot avoid research, because you need to invest money, time, and energy to develop new products. We have started a company together with Padua University – UNIR&D. This is another fundamental factor in our company's strategy. Research engages dermatologists, professors, and newly graduated students.

Last year you invested 4.5%, around EUR 3.8 million in R&D. What other investments in R&D are you planning for the upcoming year and how do you use digital technology?

We are using digital solutions, but not as much as we could. We are in contact with a few universities that are outside of Italy. We have built partnerships with doctors working in the anti-aging sector, because in Italy traditional science is not engaged in R&D in our field. The same goes for the European-level. Research investments are still focused on healing illnesses, but our focus is taking care of the person so they can live a long and healthy life. Researchers in the anti-aging field are mostly in the US.

You have implemented collaborations with over 30 labs worldwide, in addition to the universities you have mentioned. Why are these collaborations so important, and what are you planning in this regard for the near future?

The most important thing is that we created an e-learning school, PHI. Lifestyle and food supplements, dermatology, and anti-aging cosmetics are now focused on the human microbiome. The most advanced part of our research puts attention on this, but the traditional research at universities is not interested in this. These new areas of research are focused on the billions of bacteria leaving inside us. There are 1.5kg of bacteria living in the average human intestinal system. They are not enemies to be killed, as traditional medicine was saying. Instead, they have to be valued. Our skin is covered with bacteria and their health makes the difference when it comes to the look of our skin. We are focusing on the kinds of bacteria that deliver results for our clients' cosmetic goals.

Another important topic for Unifarco is sustainability. You were the first company in the cosmetic sector to obtain the Environmental Product Declaration (EPD) certification for your products. You also put a special attention to packaging when it comes to its environmental impact. Can you talk about the Life Cycle Thinking approach that you use?

Our work in this field started a long time ago, when we got the ISO14000 certification. This imposes norms of good behavior regarding waste, water usage, risks for environment, but only within your country. The vision we embraced with EPD is a global one, because our home is the world. EPD is about how much energy it costs for the world to move materials and transport them. We produce our packaging locally. The costs for us are higher, but we pollute less. We have been carrying out research into biodegradable plastic, which is plant-based, although that may not be a viable solution. We have been trying here in Veneto to implement an initiative asking the consumer to bring back their plastic bottles to the pharmacy, so we can reuse them. This could be a good message we convey to consumers.

Unifarco exports around 15% of its products, with the goal of getting to 35% in the medium-term and to reach 6,000 pharmacies. What are the strategies that need to be implemented in order to reach these goals?

These strategies are our same as our oldest strategies, which center on taking care of our partners. Taking care of others is important throughout the whole value chain. The pharmacist has to take care of the customer, not only by handing them the product, but also by knowing them personally and knowing what they may need or want in their future. Our task is to take care of our pharmacists in the same way. We have only a little bit of interaction with the final consumer. But we never want to substitute the pharmacists and their role. It is not easy to have 6,000 people that are able to take care of the consumers as we want them to. But this is the goal. When it comes to food supplements or cosmetics, a piece of good advice is worth much more than a EUR3 saving, or than having the product in 12 hours. If we manage to take good care of our clients, we will have full pharmacies and fewer people shopping online to save money. Our value chain and supply chain are weaved together.

Do you plan further expansions abroad?

We are currently testing out Eastern and Middle Eastern countries as markets. For sure, internationalization has high costs, both in terms of money and human capital. It is a big commitment because you need to have people there and keep track of your product. We are taking it one step at a time. We can maintain our current 8-10% rate of growth. We are in no big rush.

What can we expect from Unifarco in the future?

We expect to continue on our path to the EUR150 million revenue goal by 2023. This is a monetary goal, but we actually hope to get more customers thanks to taking care of people. That is our philosophy, and we hope that consumers understand it and appreciate it.