Probi applies three business models adapted to business area, risk and opportunity. These business models and a summary of Probi’s partnerships are described below.
This model is applied in the Functional Food business area. Customers are predominantly leading food companies with the potential to achieve major sales volumes. Revenue is mainly derived from royalties from partner-generated sales. This model carries a very low risk, but Probi receives a limited portion of the revenue and the value chain. The licensee usually owns the product brand, while Probi guarantees the product through its ingredient brand.
This model is applied in the Consumer Healthcare business area. Revenue derives from sales of ready-made products in bulk or consumer packaging to a partner or distributor. This model carries a low to medium-high risk and provides opportunities for higher revenue and a larger share of the value chain than the licensing model. The product brand is owned by the partner or distributor, while Probi guarantees the product through its ingredient brand.
This model is applied in the Consumer Healthcare business area. Probi’s proprietary brands are marked clearly on the packaging and in all communication. Examples include sales of Probi Frisk and Probi Mage in the Nordic market and the Swiss launch in partnership with Vifor in 2013. Revenue is derived from sales of ready-made products to a partner, or in a joint-venture model that creates opportunities for building Probi’s brand among consumers. A joint venture model enables more control and generates higher revenue for Probi, but also entails higher risk since Probi contributes to marketing investments.