Saturated market? Opportunities abound, just ask former Swisse boss Radek Sali
Written on the 6 September 2018 by Matt Ogg
It has now been almost three years since vitamins company Swisse Wellness was sold for $1.67 billion to a Hong Kong company, giving entrepreneur Radek Sali a healthy supplement of around $250 million from the sale.
It's enough money to make time the Australian businessman's most precious asset as he looks for new opportunities through investment vehicle Light Warrior, a fund with a social and environmental responsibility bent.
"As a result of the Swisse sale money isn't such an essential for me anymore, so it just comes back to whether you're spending time with the right people," says Sali.
Make no mistake though. Profit is still one of the four Ps in Sali's business philosophy, the other three being people, passion and principles.
The rich lister has come far since his days at Village Roadshow and then Swisse, which only had annual revenue of $15 million when he first got involved with the enterprise 15 years ago.
Swisse's turnover grew to become more than 40 times that amount when it was sold to Biostime, now Hong Kong Health and Happiness, where Sali continued to be a minority shareholder before selling his remaining stake in late 2017.
So in catching up with him, we were curious to find out what considerations he takes account when starting out from scratch with new ventures, particularly following the big win with Swisse.
"For us it's working with people who are inspiring to be around, who grow and develop those they're working with and also challenge me to be a better manager or board member or shareholder," he says.
"It has to be in an environment where there's an opportunity, but the right people can create opportunity if there's been a bit of a start-up and runway towards success.
"Our model is generally to invest in businesses that have a runway in revenue, may have some profit on their side or may be at a point where they're about to realise some profit and then we can enhance that."
He says the hardest thing for an organisation to achieve is to successfully make the transition from a small business mindset to the approach of a large corporate.
"It's all about system and process, and creating a repeatable measure of how to take something that stems from being a great idea that turns into a business outcome, which then moves into a stage of maturing and can be repeated by others," he says.
So you've got a business plan, but what about your culture plan?
"It's not an elitist thing having a great culture or a wellness-focused culture," says Sali.
The entrepreneur claims a positive and healthy workplace culture helps create purpose in an organisation, but how can this be instilled by managers? Sali relates how the idea was practised at Swisse.
"I think culture isn't expensive to invest in, and what it does is it inspires people to bring their even better self to a workplace. We should focus on things that optimise and enhance our moods," he says.
"The culture was as important as the business. So we actually had a culture plan as well as a business plan, and that culture plan would be reviewed as often as our business plan."
He says buy-in is critical, meaning a culture plan needs to have staff contribution rather than just being a top-down exercise to enforce a certain culture.
"It's like a business plans are too. If you get shoved a whole lot of numbers you've got to achieve without having input on them, it's not a nice way to do it and it's not going to be a practical way to do it either," says the executive.
"But if you sit down with your manager and they say 'these are the numbers we've got to achieve, how are we going to achieve them?' and then show some flexibility and listen to some of the challenges that might be presented, you're going to have much better chances of delivering on that number."
Sali adds communication is critical to making a culture plan successful.
"I reckon it takes about 10 times to get a message across in the workplace," he says.
"Make sure you consider the communication plan the amount of times you're going to meet and talk about how you're delivering on the culture, and how you're going to keep yourselves accountable to delivering a high-performance culture that will deliver great business outcomes."
The implementation of a communications strategy can be as simple as the language used in internal correspondence.
"For instance at Swisse we didn't start emails with things like 'Dear'. We started emails with 'A great day to you' or 'A fantastic day to you', and we ended it with 'Celebrate life every day' or CLED that's the Swisse team spirit," says Sali.
"And we changed the language. Instead of words like 'problem' we had words like 'challenge' so people would think about the solution when a problem came up, because what do you do when there's a challenge? You think about the solution.
"So we were very selective about the words and we focused on language as a way to enhance our culture, and that's a cheap and easy way to start working on creating purpose and creating a better culture in your business."
Rethink to grow
With the right people on board and a healthy workplace culture that encourages wellness, creativity and high-performance, how do you use all of that to your advantage if the industry you're in is experiencing saturation?
For Sali, it all comes down to rethinking the business model.
"I think that the due process of business evolution always deals with saturation," he says.
"To be honest with you when I first started in the supplements business with Swisse back in 2005, the category was stagnant. It was growing at only 1-2 per cent so slower than CPI so you could say technically it was in decline.
"So as a result of potential oversaturation, a rethink was required, and the only way we were able to be successful was to think differently to how the rest of the brands were thinking."
He says other brands in the space were focused on health outcomes, like solutions to irritable bowel syndrome (IBS) or urinary tract infection (UTI), so the trick as to take a different marketing approach.
"What we did is we took those same health claims but we also made them aspirational and we delivered that message in a way that was unique," he says.
"We took ambassadors celebrities, sportspeople, people that people wanted to hear from - and their health regime and their secrets, and this created a new opportunity in the category.
"So when you talk about saturation, I think there are always new opportunities when saturation happens."
What's next for Radek Sali?
Light Warrior is now involved in more than 12 different ventures, many of which are in the health and wellness space but also in education, marketing and content.
These businesses include cold-pressed milk producer Made by Cow, low-sugar clinical hydration company Hydralyte and OurCrowd, a platform that brings crowdfunding to the tech sector.
But Light Warrior's latest deal is a $1 million 50-50 JV with Wanderlust USA to bring mindful living festivals to Australia, New Zealand and South East Asia.
"I've admired Wanderlust for a long time. In fact Swisse was a sponsor of Wanderlust when it first arrived in Australia four years ago and prior to that I was actually looking at ways to bring it to Australia like we did with the Colour Run," Sali says.
"It gave me a good sense of what the brand a business was about, but it also gave me a sense of what the opportunities were going forward."
But the new venture with Wanderlust will be doing things differently this time round.
"There's a real opportunity to develop more partnerships to offer it as an incentive or a culture enhancer to corporations to introduce what Wanderlust brings as a festival to a workplace, and that's a focus on wellness," he says.
"So music, meditation, yoga as well as organic food are all things that feature at our festivals. We also have inspiring speakers, entrepreneurs, as well as specialists, all present in workshops.
"That for me was a real opportunity was to develop that further. The festival experience was really good here in Australia so we just felt that we could broaden it a little further and make it a little bit more accessible to a wider demographic."
And how does this strategy relate to Sali's approach to saturated sectors?
"Festivals here are a dime a dozen, but festivals you can go along to during the day where don't have to get drunk, don't have to worry about getting squeezed by the crowd but can go along to and enjoy, have a healthy experience, and do something you don't do every day and to be inspired by speakers, it's just a different take on a festival," he says.
The plan is to run three festivals at the end of this year, followed by another nine across the country in 2019 and diversification into New Zealand and Asia in 2020.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg