Optimizing Gut Health: A Business Model

Design Journey for BiomeBoost Probiotic

Beverages

Student Number: 209047826

Angus Thomas
Supervisor: Professor Yasin Rofcanin
Msc Entrepreneurship and Management
02/09/2024
Word Count: 13727

Submitted as part of the requirement for completing an MSc in

Entrepreneurship and Management at the University of Bath

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Table of Contents
Abstract ............................................................................................................................. 3
1. Introduction ............................................................................................................... 4
1.1 Background and motivation ..................................................................................................4
1.2 Problem Definition .........................................................................................................5
1.3 Business Idea ........................................................................................................................6
2. Exploratory Phase ...................................................................................................... 7
2.1 Literature Review ..................................................................................................................7
2.2 Original Design Propositions ............................................................................................... 10
2.3 Customer Overview and Analysis ........................................................................................ 12
2.4 Competitor Overview in the UK Probiotic Market ............................................................... 13
3. Generative Phase ..................................................................................................... 15
3.1 Design Thinking Approach ................................................................................................... 15
3.2 Market Validation through Primary Data Collection ............................................................ 17
4. Business Model ........................................................................................................ 25
4.1 Business Model Canvas ....................................................................................................... 25
4.2 Marketing Model ................................................................................................................ 34
4.3 Financial Model................................................................................................................... 40
5. Discussion and Reflection ............................................................................................. 49
5.1 Reflection on the Entrepreneurial Journey .......................................................................... 49
5.2 Addressing Key Underlying Uncertainties and Assumptions ................................................ 51
5.3 Reflection on the Viability of BiomeBoost’s Business Model ............................................... 52
5.4 Conclusion .......................................................................................................................... 53
6. Bibliography................................................................................................................. 54
7. Appendices................................................................................................................... 59
7.1 5 Year Forecast P&L ...................................................................................................... 59
7.2 5 Year Revenue Analysis ............................................................................................... 60
7.3 5 Year Revenue Assumptions........................................................................................ 61
7.4 5 Year Margin Analysis ................................................................................................. 62
7.5 5 Year Cost of Sales Analysis ......................................................................................... 63
7.6 5 Year Cost of Sales Assumptions.................................................................................. 64
7.7 5 Year Marketing Mix ................................................................................................... 65
7.8 5 Year Headcount and Salaries ..................................................................................... 66
7.9 5 Year SG&A ................................................................................................................. 67
7.10 5 Year SG&A Assumptions ............................................................................................ 68

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 7.11 Working Capital Assumptions ....................................................................................... 69
7.12 Venture Capitalist 1 IRR Calculation .............................................................................. 70
7.13 Summarised Cap Tables ................................................................................................ 71
7.14 Scientific Background of Probiotic Blends in BiomeBoost Products ............................... 72

Abstract

This dissertation explores the journey of designing and developing a business model for
BiomeBoost, a brand aimed at revolutionizing the probiotic market with a range of targeted,
science-backed probiotic yoghurt beverages. The study is motivated by the growing
consumer demand for personalized health solutions, particularly in the area of gut health.
Through a detailed literature review, market analysis, and customer research, the
dissertation identifies gaps in the current probiotic market, such as the lack of specialized
products and the prevalence of high-sugar content in existing offerings.

BiomeBoost addresses these gaps by offering a range of probiotic yoghurt drinks tailored to
specific health needs, including athletic performance, immune support, and general
wellness. The development process was guided by design thinking principles, ensuring that
the final products not only meet but exceed consumer expectations. This dissertation also
presents a comprehensive business model, detailing customer segments, value
propositions, key activities, and revenue streams, supported by a robust marketing strategy
aimed at driving brand awareness and customer loyalty.

By focusing on transparency, scientific validation, and natural ingredients, BiomeBoost will

position itself as a leading player in the competitive probiotic market, catering to the
different health needs of modern consumers.

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 1. Introduction
1.1 Background and motivation

In recent years, gut health has emerged as a critical area of focus within the health and
wellness community, driven by mounting evidence linking the gut microbiome to overall
well-being (Prajapati et al., 2023). The gut, often referred to as the "second brain," plays a
vital role in digestion, nutrient absorption, and immune function. Recent studies have
demonstrated its profound influence on various aspects of health, including mental health,
physical strength, and chronic disease prevention (Gupt et al., 2024). The presence of
diverse and beneficial bacteria in the gut is essential for maintaining a balanced immune
system, reducing inflammation, and even enhancing cognitive function.

This growing recognition of gut health's importance has sparked a surge in interest among
health-conscious individuals, increasingly seeking natural and effective ways to support their
digestive systems and improve their overall health. Probiotic supplements, fermented
foods, and dietary adjustments are becoming popular products to boost gut health. As
awareness spreads, the market for gut health products continues to expand, reflecting a
broader trend towards holistic health practices.

My motivation for creating a business in the gut biome industry stems from my journey as a
type 1 diabetic. Managing diabetes requires meticulous attention to diet and medication to
maintain an ideal body balance. This daily commitment has not only heightened my
awareness of the body's complex interplay of systems but also my understanding of the
critical role of gut health in overall well-being. I have developed a deep appreciation of the
importance of maintaining a balanced gut microbiome to generate several important health
benefits.

This has inspired me to translate my personal health practices into a business that provides
similar benefits to all. My goal is to create a product that enhances gut biodiversity and
supports overall health, making it easier for individuals to achieve body balance. By offering
a scientifically backed, convenient daily probiotic beverage, I aim to empower people to
take control of their health in a natural and effective way. This business is not just a
commercial endeavour for me; it is a mission. Through this, I hope to make a positive impact
on the health and wellness of many.

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 1.2 Problem Definition

The current probiotic market, though rich in variety and widespread in consumer use, faces
several significant issues. One of the primary problems lies in the nature of the bacterial
strains used in many popular products. Most probiotics, such as Yakult and various kefir
brands, contain an array of beneficial bacteria that are generally non-specialized. While
these bacteria can aid in overall digestive health, they do not specifically target other critical
aspects of human health, such as strength, immunity, or mental well-being. This lack of
specialization means that consumers seeking specific health benefits cannot find the precise
support they need.

Another critical issue in the probiotic market is the high sugar content found in many
products. Brands like Actimel and Yakult, despite their beneficial probiotic cultures, are
often packed with sugar. This poses a significant concern as excessive sugar intake has been
shown to have numerous negative effects on the body, including detrimental impacts on gut
health (Garcia et al., 2022). High sugar content can feed harmful bacteria and yeast in the
gut, potentially leading to an imbalance in the microbiome. This imbalance can negate the
positive effects of the probiotics and contribute to various health issues such as
inflammation, obesity, and metabolic disorders.

Beyond the issues of non-specialized bacteria and high sugar content, there are additional
problems within the probiotic market such as the lack of transparency and standardization
in product labelling and efficacy. Many probiotic products do not provide clear information
on the strains of bacteria used, their concentrations, or their specific health benefits (Ahire
et al., 2023). This makes it difficult for consumers to make informed choices about which
products might best meet their needs. Moreover, the efficacy of these products can vary
widely, with some containing insufficient quantities of live bacteria to deliver any
meaningful health benefits.

Finally, the probiotic market often overlooks the importance of prebiotics, which are non-
digestible fibres that feed beneficial gut bacteria. While some products combine prebiotics
and probiotics, many do not, potentially limiting the overall effectiveness of the probiotics.

These issues highlight the need for more specialized, transparent, and scientifically backed
probiotic products that address specific health concerns.

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1.3 Business Idea

BiomeBoost: Unleashing the Power of Targeted Probiotics

The current probiotic market offers a vast array of products, yet many consumers struggle
to find solutions that truly address their specific needs. BiomeBoost solves this problem by
offering a revolutionary range of targeted probiotic beverages designed to gut health.

Unlike one-size-fits-all probiotics, BiomeBoost takes a personalized approach. We offer

distinct blends formulated with specific health goals in mind. Each formula is tailored to a
different demographic, including strength and recovery supplements for the fitness
enthusiasts, as well as immune boosting formulas for the immune conscious probiotic
consumers

Understanding the detrimental effects of sugar on gut health, BiomeBoost prioritizes sugar-
conscious formulations. Our drinks are meticulously crafted with minimal sugar content,
achieving a delicious taste using natural sweeteners like stevia leaf extract. This ensures the
customer reaps the benefits of probiotics without compromising overall health goals.
BiomeBoost prioritizes complete transparency. Our products clearly list the specific
probiotic strains used, their quantities, and the scientific evidence behind their inclusion.

Furthermore, BiomeBoost prioritizes maximizing efficacy. Our drinks are produced using
modern processes that ensure a high concentration of live bacteria reaches your gut,
maximizing the potential health benefits. Recognizing the symbiotic relationship between
prebiotics and probiotics, we incorporate prebiotic fibres in all our formulations. These
fibres act as food for good gut bacteria, promoting their growth and activity, ultimately
creating a thriving gut ecosystem.

By addressing the key shortcomings of the current probiotic market, BiomeBoost offers a
powerful and targeted approach to gut health. Our unique features translate into a range of
benefits for consumers. Whether you're an athlete seeking enhanced performance,
someone prioritizing immune health, or simply focused on optimal digestion, BiomeBoost
offers a targeted solution that aligns with the customer’s specific goals. Transparent
labelling empowers customers to make informed choices about what you consume. High
concentrations of live bacteria and the inclusion of prebiotics work synergistically to
maximize the effectiveness of our products. By providing both probiotics and prebiotics,
BiomeBoost creates a healthy and balanced gut environment, allowing consumers to
nourish their microbiome and unlock its full potential for overall well-being. BiomeBoost is
more than just a probiotic drink; it's a commitment to empowering individuals to take
control of their gut health.

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 2. Exploratory Phase

2.1 Literature Review

Gut Health and the Microbiome

In recent years the human gut microbiome, a complex ecosystem of microorganisms, has
emerged as a pivotal determinant of health and disease. Research has significantly
advanced our understanding of this intricate relationship, revealing its profound impact on
various physiological processes.

Beyond its well-established role in digestion, the gut microbiome plays a crucial role in
immune system development and function. Microbial communities actively participate in
immune cell development, education, and function (Wu & Wu, 2012). This dynamic
interplay is essential for maintaining a balanced immune response, preventing infections,
and potentially influencing the development of immune-mediated diseases. Additionally,
the gut-brain axis has been extensively explored, with emerging evidence supporting the
microbiome's role in modulating mood, behaviour, and neurodegenerative diseases (Dinan
& Cryan, 2017).

Modern research on the gut microbiome shows how it impacts physical performance.
Emerging research suggests a complex interplay between the gut microbiota and athletic
ability. Specific microbial profiles, found in the biomes of many elite athletes, have been
linked to enhanced strength, endurance, and recovery in athletes through protein reuptake
and lactate metabolism (Scheiman et al., 2019).

The gut microbiome's influence extends to metabolic health. Dysbiosis, an imbalance in the
microbial community, has been linked to the development of obesity, type 2 diabetes, and
non-alcoholic fatty liver disease (NCDs) (Rodrigues et al., 2022). Mechanisms underlying
these associations include altered energy metabolism, inflammation, and short-chain fatty
acid production (Wolf & Lorenz, 2012).

Furthermore, the gut microbiome is increasingly implicated in chronic inflammatory

conditions. Research has identified specific microbial signatures associated with
inflammatory bowel disease (IBD) (Yao et al., 2021), suggesting a causal relationship
between dysbiosis and disease pathogenesis (Zheng et al., 2022). The microbiome's role in
modulating immune responses (Turroni et al., 2014) also highlights its potential involvement
in autoimmune diseases.

In summary, the gut microbiome has recently emerged as one of the most significant and
influential factors in human health.

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The Supplement and Personalised Nutrition Market

The market for probiotic supplements has witnessed significant growth in recent years,
driven by increasing consumer awareness of the benefits of probiotics for digestive health,
immune support, and overall wellness (Siddiqui et al., 2023).

Market Trends

The global market for probiotic supplements is expanding rapidly, with an estimated annual
growth rate of 7% and a current market value of approximately $15 billion USD (Day et al.,
2019). This growth is fuelled by a growing body of research supporting the health benefits of
probiotics and increased consumer interest in natural and preventative health solutions.

During the COVID-19 pandemic, there was a notable surge in the sales of dietary
supplements, including probiotics, as consumers sought to boost their immune systems and
improve overall health. For example, the global dietary supplement market increased from
USD 82 billion in 2018 to USD 149.5 billion in 2021, with projections to reach USD 308 billion
by 2028 (Djaoudene et al., 2023). This trend is indicative of a broader shift towards health
and wellness products, as individuals become more proactive in managing their health
through supplementation.

Consumer Behaviour

Consumer behaviour is characterized by a growing preference for natural and health-

promoting products. According to a survey by the Council for Responsible Nutrition, the
primary reasons for taking supplements are to improve immune health (36%) and maintain
general health and well-being (44%) (Djaoudene et al., 2023). This aligns with the increasing
popularity of probiotics, which are perceived as a natural way to support digestive and
immune health (Effendi et al., 2022).

The demographics of probiotic supplement consumers are diverse, but there is a significant
uptake among health-conscious individuals, older adults, and those with specific health
concerns (Nguyen et al., 2019). For instance, older adults often use probiotics to prevent
age-related chronic diseases and improve digestive health. Additionally, the use of
probiotics has extended beyond traditional health supplements to include applications in
sports nutrition and beauty products, reflecting broader consumer trends towards
comprehensive health and wellness solutions (Aykut et al., 2024).

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Demand for Health Supplements and Personalized Nutrition

The demand for health supplements, including probiotics, is closely linked to the rise of
personalized nutrition. Personalized nutrition involves tailoring dietary advice and
supplement recommendations based on individual characteristics, such as genetic makeup,
lifestyle, and health status. This approach is gaining traction as informed and educated
consumers seek more targeted and effective ways to improve their health.

Personalized nutrition holds promise for enhancing the efficacy of dietary interventions by
accounting for individual variability in response to nutrients. For example, some studies
suggest that personalized dietary advice based on genetic information can lead to more
significant improvements in dietary habits and health outcomes compared to generic advice
(Nielsen & El-Sohemy, 2012). This has led to the development of personalized probiotic
supplements designed to meet specific health needs, such as improving gut health,
enhancing immune function, or managing metabolic conditions.

The increasing interest in personalized nutrition is also reflected in the market trends for
dietary supplements. Consumers are increasingly looking for products that offer
personalized health benefits and are willing to pay a premium for such products. This has
led to the proliferation of customized supplement plans and the integration of advanced
technologies, such as genetic testing and microbiome analysis, into supplement
recommendations.

Regulatory Landscape

The regulatory landscape for probiotics and dietary supplements varies significantly across
regions (Szajewska & Vinderola, 2024), impacting market trends and consumer behaviour. In
the UK, the Medicines and Healthcare products Regulatory Agency (MHRA) has stringent
requirements for health claims, including the need for robust scientific evidence to
substantiate claims (Medicines and Healthcare products Regulatory Agency, 2021). This has
led to many health claims for probiotics being rejected, which in turn affects market growth
and consumer trust in probiotic products.

In the European Union, probiotic supplements are regulated primarily as food products
under the European Food Safety Authority (EFSA). The EFSA mandates strict guidelines on
health claims made by probiotic products, requiring scientific evidence to support any
assertions about health benefits. This rigorous standard ensures that all marketed probiotic
supplements are both safe for consumption and effective in delivering the health benefits
they claim. (EFSA 2018)

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In contrast, the regulatory environment in the United States is relatively more relaxed (de
Simone, 2019), with dietary supplements being regulated as foods rather than drugs. This
has facilitated the rapid growth of the supplement market, although it also raises concerns
about product quality and safety. The need for standardized regulations and better
consumer education about the efficacy and safety of probiotics remains a critical issue for
the industry.

Having conducted thorough research on the safety and efficacy of the bacterial strains used
in each BiomeBoost formula—Daily, Immuno, and Active—I am confident in their suitability
for consumer use. Additionally, after reviewing the regulations and approval requirements
set by key regulatory bodies, including the UK’s MHRA, the USA’s FDA, and the EU’s EFSA, I
am assured that BiomeBoost is well-positioned to meet the necessary standards and secure
approval from all relevant authorities.

Future Directions

The future of the probiotic supplement market lies in the continued integration of
personalized nutrition (Poínhos et al., 2014) and the development of more targeted and
effective probiotic formulations. Advances in microbiome research and the application of
technologies such as metagenomics and metabolomics are expected to enhance our
understanding of how probiotics interact with the human body and contribute to health.

Moreover, the industry must address regulatory challenges and invest in large-scale clinical
trials to establish the efficacy of probiotic products and gain consumer trust. By focusing on
personalized, evidence-based solutions, the probiotic supplement market can continue to
grow and meet the evolving health needs of consumers worldwide.

In summary, the probiotic supplement market is characterized by rapid growth, driven by

increasing consumer demand for natural health products and personalized nutrition
solutions. While regulatory challenges and the need for robust scientific evidence remain,
the future looks promising as the industry continues to innovate and adapt to consumer
needs. By leveraging advances in microbiome research and personalized nutrition, the
probiotic supplement market can play a significant role in promoting health and wellness.

2.2 Original Design Propositions

The journey to developing the BiomeBoost probiotic yogurt drink was marked by a series of
creative iterations and strategic pivots, deeply informed by market research and scientific
insights into gut health and personalized nutrition. This section explores the evolution of
product ideas that led to the final design.

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 i. Probiotic Capsule for Enhanced Immune Function
The initial concept was a probiotic capsule aimed at enhancing immune function, leveraging
the critical role of the gut microbiome in immune system development. This product was
designed to appeal to consumers prioritizing immune health, a need highlighted by the
COVID-19 pandemic. It featured easy-to-swallow capsules that would particularly attract
older adults seeking straightforward supplement routines. However, this design was
ultimately set aside because its distribution through the supermarket channel would be
hard to obtain, potentially limiting accessibility and significantly impacting projected profits
and revenues. The need for a more marketable and broadly distributable product became
apparent.

i. Customizable Probiotic Powder

Subsequently, the idea of a customizable probiotic powder was explored. This format was
intended to tap into the growing trend of personalized nutrition, offering consumers the
ability to tailor their supplements to specific dietary needs. Despite its versatility in dosage
and method of consumption, this product concept was not pursued further. The dominant
presence of established yogurt-based probiotics like Actimel and Yakult in the UK market
suggested that a powder form might struggle to compete effectively. The market's
preference for ready-to-consume, familiar formats steered the development process toward
a more familiar product design.

ii. Digestive Health Probiotic Snack Bar

Another innovative proposition was a probiotic snack bar designed to support digestive
health, aligning with the demand for convenient health solutions. This snack bar was
intended to be rich in fibres and probiotics to promote a healthy gut microbiome. After
further exploration, I discovered that creating a tasty probiotic snack bar that consumers
would find appealing required a substantial amount of sugar. The high sugar content could
negate the probiotics' beneficial effects, as well as compromise BiomeBoosts’ no sugar value
proposition, and this prompted a pivot away from solid food formats.

iii. Athletic Performance Probiotic Blend

I then landed on the concept of an athletic performance probiotic blend that could be added
to water, targeting athletes aiming to enhance strength, endurance, and recovery. Although
research supported the effectiveness of certain probiotic strains in boosting athletic
performance, practical challenges emerged, particularly in ensuring consistent delivery of
these benefits. Given that consumers would mix the blend into water themselves, there
were potential issues with mixing that could prevent the guarantee of correct probiotic
intake with each use. This highlighted the complexity of maintaining sufficient probiotic
content without compromising the product’s stability or consumer appeal, emphasizing the
need for a more reliable delivery method.

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 iv. BiomeBoost Probiotic Yoghurt Drink (Final Product)
The culmination of these explorations was the BiomeBoost probiotic yogurt drink. This final
product combined the benefits of live probiotic cultures with the nutritious properties of
yogurt, effectively addressing the limitations of previous propositions. The yogurt-based
drink format offered a familiar, practical and appealing way to deliver probiotics, enhancing
gut health and supporting immune functions. I decided to create a line of three unique
products; Active, Immuno and Daily, to capture and target customers from every consumer
demographic in the probiotic market, including health-conscious individuals and athletes.

2.3 Customer Overview and Analysis

The demographic and psychographic analysis of potential customers is essential for

developing effective marketing strategies and tailored product development for
BiomeBoost. I believe this product primarily appeals to two key demographic groups. The
first group includes middle-aged to older adults who are well-educated, possess higher
disposable incomes, and exhibit a strong interest in health supplements aimed at
maintaining wellness and preventing age-related health issues. The second group consists of
athletes, ranging from young adults to middle-aged individuals, who leverage probiotics to
enhance their physical performance and recovery, valuing supplements that provide a
competitive edge and support rigorous training regimes.

Psychographically, these consumers are united by a high level of health consciousness, with
a strong preference for supplements that support long-term wellness and offer preventive
health benefits. Athletes, in particular, focus on performance enhancement and quick
recovery, seeking scientifically proven products that can improve physical outcomes. Across
all demographics, there is a universal demand for high-quality and effective products, with
consumers favouring those that are backed by scientific research, have transparent
sourcing, and feature clear labelling of ingredients. Both demographic groups also prefer
products that integrate seamlessly into their daily routines, whether for ongoing health
maintenance or specific pre- or post-workout needs. Additionally, there is a pronounced
preference for clean label products that are organic, non-GMO, and free from unwanted
additives.

Probiotics are typically consumed as part of a daily health regimen, indicating a steady
demand once brand loyalty is established. Before making a purchase, consumers extensively
research products, especially athletes who are meticulous about the components that could
impact their performance. The trend towards online shopping is also pronounced, with
many consumers appreciating the convenience of purchasing supplements online.

For BiomeBoost, potential marketing implications include tailoring messages to address the
specific health needs of both older adults and athletes. This involves highlighting benefits

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 like enhanced immune function, improved gut health, and better recovery times. Providing
in-depth information about how probiotics can benefit various aspects of health and
performance can help in building trust and authority. Moreover, strengthening online sales
channels and enhancing digital marketing efforts are crucial to attract tech-savvy consumers
who prefer online shopping. By aligning the product offerings and marketing strategies with
the detailed demographic and psychographic profiles of the target market, BiomeBoost can
effectively cater to the nuanced needs of its diverse consumer base, ensuring broad appeal
and sustained interest in its probiotic products.

2.4 Competitor Overview in the UK Probiotic Market

Yoghurt/Kefir-Based Probiotics: Actimel, Yakult, and Biotiful

Actimel is positioned as a mid-range probiotic option, available extensively

through major UK supermarkets such as Tesco, as well as online retailers. It is
recognized for its versatility and nutritional enhancements, including a blend of
probiotics like Lactobacillus casei Defensis, and fortification with nutrients such as
calcium and vitamins B6 and D. This probiotic formula functions only to boost and
maintain gut health and does not provide targeted benefits to other aspects of
human health. Despite its broad appeal and variety of flavors, Actimel’s higher
sugar content may deter health-conscious consumers. The product’s widespread
availability and nutritional value provide a solid benchmark for BiomeBoost,
though the sugar content and non-specialised formula highlights a potential area
for improvement. (Danone, 2023)

Yakult offers a more affordable option with widespread distribution across

supermarkets, convenience stores, and health food stores. Known for its simplicity
and strong scientific foundation, Yakult features the Lactobacillus casei Shirota
strain, promoting untargeted benefits to gut health. However, its limited flavour
options and higher sugar content might restrict its appeal among those seeking
variety and health-conscious solutions. Yakult’s established market presence and
scientific backing set a high standard for credibility, which BiomeBoost aspires to
match while addressing the lack of variety (Yakult UK, 2024).

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Biotiful Kefir is marketed as a premium product found in health food stores,
premium supermarket sections, and available via direct online sales. It caters to
consumers seeking natural ingredients without added sugars and is known for its
health benefits including immunity boosting and digestive health improvement.
The distinct taste of kefir may not appeal universally, potentially limiting its
audience to those familiar with or open to fermented products. Biotiful’s
commitment to natural, clean ingredients aligns with BiomeBoost’s ethos, though
its market reach is somewhat niche. (Biotiful UK, 2023)

Non-Yoghurt-Based Probiotics: AG1 and Symprove

AG1 by Athletic Greens, targeting the premium segment, is

sold directly to consumers through its website. It
encompasses a holistic approach by combining vitamins,
minerals, superfoods, and probiotics into a comprehensive
supplement. While this all-in-one formula is appealing to
health enthusiasts, its premium pricing and complex
ingredient list may be daunting for average consumers
seeking simpler health solutions. (Athletic Greens, 2023)

Symprove stands out with its unique water-based formula that includes
four strains of live activated bacteria, engineered to withstand stomach
acid and colonize the gut effectively. This product is primarily sold through
its website, select pharmacies, and health clinics. It is particularly lauded
for its low-sugar formulae, and ability to manage symptoms of IBS
effectively, gaining favour for its clinical backing and specialized
formulation. These attributes provide Symprove with significant
competitive advantages, especially appealing to consumers with specific
health issues. However, despite its strengths, Symprove's premium price
point and its use of untargeted bacterial strains may not appeal to all
consumers, limiting its accessibility and effectiveness in addressing
specific health needs within the broader market. (Symprove UK, 2024)

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Market Competitor Table

Product Price Point Sales Channel Strengths Weaknesses

Actimel Mid Range Supermarkets, Nutritional High Sugar
Online B2C. additions,
versatility
Yakult Low to Mid Supermarkets, Science Backed Limited product
Range Online B2C, and trusted range and
Health Stores. strain flavour, high
sugar content
Biotiful High Supermarkets, No added Distinct,
Health Stores. sugars acquired sour
taste
AG1 Premium Online B2C Complete High price, not
Nutritional in ready-to-
Blend consume state
Symprove Premium Online B2C, Contains High price.
Health Stores. Prebiotics, and
is Vegan

The analysis reveals a significant market gap for a low-sugar, tailored probiotic that offers
targeted health benefits without the complexity or high sugar content of current options.
BiomeBoost aims to fill this gap with a blend of probiotics and prebiotics, offering a specific
health-focused alternative, with the Immuno and Active formulas positioned as mid to high-
price offerings, while the Daily formula is offered at a low to mid-price point.

3. Generative Phase

3.1 Design Thinking Approach

Design Thinking is a user-centred methodology used to solve complex problems in a highly

creative and innovative way. At its core, Design Thinking focuses on understanding the
needs and challenges of the end users. It involves five key stages: empathize, define, ideate,
prototype, and test. This approach is crucial for developing products that genuinely meet
user needs and stand out in the market due to their functionality and user-friendliness.

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The importance of Design Thinking lies in its iterative process of learning and innovation. By
continually testing and refining ideas based on user feedback, companies can reduce risks
and avoid costly mistakes. This iterative cycle of testing and refining is closely linked to the
“Lean Startup” methodology, popularized by Eric Ries. Lean Startup emphasizes the concept
of “build-measure-learn” to test hypotheses and pivot strategy where necessary, much like
the iterative nature of prototyping and testing in Design Thinking (Ries, 2011).

In the context of developing the BiomeBoost product range, Design Thinking was applied
extensively particularly at the empathize, define and ideate phases. Starting from the
empathize stage, efforts were made to understand the demographic and psychographic
characteristics of potential customers through literature reviews and customer analysis. This
informed the define stage, where the specific needs and challenges of the target market
were articulated.

During the ideate stage, several product concepts were brainstormed, such as probiotic
capsules, powders, and eventually the yogurt drink, reflecting a deep engagement with the
emerging market needs and scientific research.

For instance, the decision to not pursue the probiotic capsule was based on feedback
regarding distribution challenges, reflecting the Lean Startup’s principle of pivoting based on
learnings from real-world experiments. Similarly, the final decision to develop a probiotic
yogurt drink was a pivot towards a more marketable product that aligned better with
consumer preferences and distribution capabilities.

In summary, the application of Design Thinking and its adherence to Lean Startup principles
were evident throughout the development process of BiomeBoost. This approach not only
ensured that the products were well-aligned with market demands but also minimized risks
and resource expenditure, maximizing the potential for success in the competitive health
supplement market.

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3.2 Market Validation through Primary Data Collection

The literature review and customer analysis were vital in the development of three distinct
BiomeBoost products, each tailored to meet the specific needs of different demographic
groups. This targeted approach ensures that each product optimally supports the health and
lifestyle requirements of its intended audience.

The first of these products is BiomeBoost Active:

Targeting gym-goers, athletes, and active individuals, BiomeBoost Active is designed to

enhance physical health and expedite recovery post-exercise. This demographic values
efficiency and effectiveness, seeking supplements that can reliably support their high-
energy lifestyles and recovery needs after intense workouts.

To validate the market demand for a probiotic tailored for the active fitness enthusiasts,
primary data was collected through means of a focus group. This method allowed for in-
depth conversation and real-time feedback from a targeted group. The focus group for
BiomeBoost Active consisted of a diverse range of fitness enthusiasts who regularly engage
in physical activities. The demographic includes:

Age Range: Participants were primarily between the ages of 20 and 40, representing a mix
of young adults to mid-career individuals.
Activity Levels: All participants were actively engaged in either gym workouts, running,
cycling, team sports, or other fitness routines at least three to five times a week.
Professionals and Amateurs: The group included both amateur fitness enthusiasts and
professional athletes, providing a broad perspective on performance and recovery needs.
Gender and Background: There was a balanced mix of male and female participants, with
diverse backgrounds in terms of profession and lifestyle, ensuring varied insights into fitness
routines and supplement usage.

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The session was structured around 5 key discussion points:

1. Current Supplement Usage:

“Could you share what types of supplements, if any, you currently use as part of your fitness
regimen? What are your main reasons for using these supplements?”
2. Perceived Benefits of Probiotics:
“What are your perceptions of probiotics in relation to physical fitness and recovery? Have
you used probiotic supplements before, and what was your experience?”
3. Expectations from BiomeBoost Active:
“What specific benefits would you expect from a probiotic supplement designed for athletes
and fitness enthusiasts like yourself?”
4. Product Appeal and Features:
“When considering a new health supplement, what features are most important to you
potentially ingredient transparency, the lack of artificial additives, or price?”
5. Potential for Habitual Use
“If BiomeBoost Active effectively supports your fitness goals, how often would you
incorporate it into your routine, and why?”

The focus group for BiomeBoost Active underscored the importance of scientific evidence in
supporting product claims. Participants expressed a keen interest in understanding the
specific mechanisms by which the probiotic strains could enhance athletic performance and
recovery. There was a clear demand for a product specifically tailored to the unique
nutritional needs of athletes, differentiating itself from generic probiotic options.
Participants also emphasized the importance of product composition, with a strong
preference for natural ingredients and sweeteners. There was a notable aversion to artificial
additives and preservatives. Additionally, the convenience factor was highlighted, with
participants expressing a desire for easy accessibility through traditional retail channels.

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The table below shows how focus group feedback translates into specific need statements.

Focus Group Quote Specific Need Statement

"I'm all about data and results. If you can The product needs to be backed by
show me the science behind the bacteria scientific evidence demonstrating the
strains in this yogurt and how they effectiveness of the bacteria strains in
scientifically help with recovery and enhancing recovery and athletic
boosting performance, I'm in." (Participant performance.
2, CrossFit enthusiast)
"I've tried a few probiotic supplements, but The product should be specifically
they all seem pretty generic. Nothing really formulated to address the needs of athletes
targets the specific needs of athletes. I'm and fitness enthusiasts, differentiating itself
curious to see how this one differs." from generic probiotic supplements.
(Participant 1, Competitive Runner)
"Sugar is a big no no for me, so I'm glad to The product should use all-natural
hear about the stevia. A lot of these ingredients and sweeteners to cater to
products are loaded with artificial health-conscious consumers who are
sweeteners." (Participant 3, Yoga and avoiding sugar and artificial additives.
Meditation Practitioner)
"Convenience is key for me. If I can grab The product needs to be conveniently
this at my local supermarket on the way available for purchase at supermarkets and
home from a ride, that would be ideal." health stores frequented by the target
(Participant 4, Cyclist) audience.
"I'm interested, but what’s crucial for me is The brand requires a strong identity and
the assurance of all-natural ingredients and emphasizes its use of natural ingredients to
no fillers or artificial additives." (Participant differentiate itself from competitors in the
5, Weightlifter) probiotic market.

These specific need statements were then considered in the final product decision making
stage of the generative phase.

The second offering from the business is Biomeboost Immuno

Immuno is formulated to support and strengthen the immune system. It is aimed at

individuals who are particularly focused on enhancing their immune health, including those
with heightened health concerns, such as the elderly, those with compromised immune
systems, and health-conscious individuals looking to maintain robust health during flu
seasons or pandemics.

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A separate focus group was organised to validate the market demand for an immune
boosting probiotic supplement among members of the target audience demographic:

Age Range: Participants were primarily between the ages of 50 and 75, with a few
individuals in their early 40s who are health-conscious and proactively focusing on their
immune health.
Health Concerns: The group included individuals with varying levels of health concerns,
including those with compromised immune systems, chronic conditions, or a heightened
focus on avoiding illness during flu seasons or pandemics.
Lifestyle: Participants range from moderately active individuals who engaged in regular,
gentle exercise (such as walking or yoga) to those with a more sedentary lifestyle due to age
or health limitations.
Gender and Background: The group had a balanced mix of male and female participants
from diverse professional backgrounds, including retirees, working professionals, and those
with flexible lifestyles.

The 5 key points of discussion in the group were as follows:

1. Current Immune Health Practices:

“Can you describe any specific practices or supplements you currently use to support your
immune system? What motivates you to use these products?”
2. Concerns and Expectations Regarding Immune Supplements:
“What are your primary concerns when it comes to immune health, and what do you expect
from an immune-boosting supplement?”
3. Perceived Effectiveness of Probiotics for Immune Support:
“Have you used probiotics in the past to support your immune health? What has been your
experience, and how effective do you perceive them to be?”
4. Importance of Natural and Safe Ingredients:
“How important are natural and safe ingredients to you when selecting an immune-boosting
supplement? Are there specific ingredients you avoid?”
5. Frequency and Convenience of Supplement Use:
“If you find an immune-boosting supplement effective, how often would you incorporate it
into your daily routine? What factors would influence your decision to use it regularly?”

Participants expressed a strong desire for a reliable and effective solution, particularly one
that goes beyond common options like Vitamin C and elderberry. There was a clear
emphasis on the importance of a supplement that is backed by evidence and free from
harsh side effects, especially for those with chronic health conditions. Participants also
highlighted the need for natural ingredients and transparency, avoiding products with
artificial additives. Finally, ease of integration into daily routines was identified as a critical
factor for consistent use.

20
The translation of focus group feedback into specific need statements is shown below:

Focus Group Quote Specific Need Statement

“I’ve been very careful with my health, The product needs to offer a reliable and
especially now. I take Vitamin C daily and effective solution that stands out from
elderberry syrup during flu season, but I’m common supplements for immune support.
always on the lookout for something more
reliable to boost my immunity.” (Participant
1, Retiree, Age 68)
“I’m concerned about getting sick because The product should be backed by research
my immune system isn’t the strongest. I and proven efficacy, with a focus on safety
want a supplement that’s proven to work and minimal side effects.
and doesn’t have any harsh side effects.”
(Participant 2, Female, Age 55, Chronic
Condition)
“I’ve tried probiotics before, but they seem The product must demonstrate clear and
hit or miss. Some work for my digestion, specific benefits for immune support,
but I’m not convinced they’re doing much beyond general probiotic benefits.
for my immune system.” (Participant 3,
Male, Age 72)
“Natural ingredients are a must for me. I The product should emphasize the use of
won’t touch anything with artificial all-natural ingredients, avoiding any
additives or fillers—there’s too much junk artificial additives or fillers.
in supplements these days.” (Participant 4,
Female, Age 63, Health-Conscious)
“I want something easy to take every day, The product should be convenient and easy
something I can just add to my morning to integrate into a daily routine to
routine without thinking too much about it. encourage consistent use.
Consistency is key for me.” (Participant 5,
Male, Age 48, Active Professional)

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The final offering is BiomeBoost Daily.

Designed for general well-being, BiomeBoost Daily includes a blend of probiotics that
support overall digestive health, enhance nutrient absorption, and contribute to a balanced
gut microbiome. This product is targeted at a broad demographic, including health-
conscious adults of all ages who are interested in maintaining a balanced diet and lifestyle.
Due to the wide demographic targeted, the focus group to validate its demand consisted of
a wide range of individuals.

Age Range: Participants were primarily between the ages of 25 and 65, reflecting a broad
spread of adults interested in maintaining general health and well-being.
Health Focus: The group included individuals with various health goals, ranging from
maintaining digestive health to enhancing overall vitality. Some participants are proactive
about preventing health issues, while others are looking to address existing digestive
concerns.
Lifestyle: Participants included a mix of moderately active individuals who engage in regular
exercise and those with busy, sedentary lifestyles. All participants were health-conscious
and interested in easy-to-implement wellness solutions.
Gender and Background: The focus group featured an equal representation of male and
female participants, with diverse professional backgrounds, including office workers, stay-
at-home parents, and freelancers.

The session was based around these 5 key discussion points:

1. Current Daily Health Practices:
“What daily practices or supplements do you currently use to maintain your overall health?
How do these fit into your routine?”
2. Digestive Health Concerns and Expectations:
“What concerns do you have about your digestive health, and what would you expect from
a daily probiotic supplement?”
3. Perceived Benefits of Probiotics for Daily Use:
“Have you ever used probiotics as part of your daily routine? If so, what benefits did you
experience, and if not, what has held you back?”
4. Preferences for Product Composition:
“When selecting a daily health supplement, what qualities or ingredients are most
important to you? Are there any specific ingredients you prefer or avoid?”
5. Commitment to Daily Supplementation:
“How likely are you to incorporate a daily supplement into your routine, and what factors
would influence your commitment to taking it regularly?”

The focus group for BiomeBoost Daily highlighted the importance of convenience, with
participants expressing a need for a probiotic supplement that easily integrates into their

22
daily routines. There was a strong emphasis on the product being gentle on the digestive
system, particularly for those with sensitive stomachs. Participants also stressed the need
for the supplement to support consistent digestive health, including addressing issues like
bloating and enhancing nutrient absorption. The preference for natural, safe ingredients
without artificial additives was clear, reflecting the group’s broader desire for a trustworthy,
health-focused daily supplement.

Feedback was once more translated into specific need statements:

Focus Group Quote Specific Need Statement

“My days are pretty hectic, so I need The product needs to be easy to integrate
something simple that fits into my routine. into a daily routine, specifically targeting
I’ve tried different supplements, but I common issues related to IBS like bloating.
always look for ones that support digestion
because I often feel bloated.” (Participant
1, Female, Age 32, Busy Professional)
“I think digestive health is crucial, especially The product should support nutrient
as you get older. I’m looking for something absorption and digestive balance, with a
that helps with nutrient absorption and strong emphasis on safety and natural
keeps everything balanced, but it has to be ingredients.
safe and natural.” (Participant 2, Male, Age
45, Health-Conscious)
“I use probiotics regularly, and I’ve noticed The product must provide consistent daily
they help with my digestion, especially benefits for digestive health,
when my diet isn’t perfect. A daily accommodating imperfect diets.
supplement that keeps me feeling good
every day would be ideal.” (Participant 3,
Female, Age 28, Active Lifestyle)
“I’ve tried some supplements that upset my The product should be gentle on the
stomach, so I’m cautious. I want something digestive system and free from artificial
that’s gentle and easy on my digestive ingredients, ensuring it’s suitable for
system, with no artificial stuff.” (Participant sensitive users.
4, Male, Age 60, Semi-Retired)
“Consistency is key for me. If I find a The product should be convenient and easy
supplement that really works, I’ll stick with to use daily, encouraging long-term,
it. I need it to be convenient and something consistent use.
I don’t have to think twice about every
morning.” (Participant 5, Female, Age 50,
Health Enthusiast)

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Focus Group Influence on Final Product Design Decisions.

During the generative phase of developing BiomeBoost, the insights gathered from focus
groups were pivotal in shaping and refining the product’s design. The feedback provided
influenced critical decisions regarding the final product features, formulations, and
marketing strategies. By actively listening to potential consumers, I was able to create a
product line that resonated deeply with its intended market.

One consistent piece of feedback across various focus groups was the demand for low sugar
content in probiotic products. Participants were acutely aware of the negative impact that
high sugar levels can have on gut health, particularly its potential to feed harmful bacteria
and counteract the benefits of probiotics. This concern led to a decision to formulate the
products with minimal sugar content and to use natural sweeteners like stevia leaf extract.
This decision positioned BiomeBoost distinctively in a market where many competitors, such
as Yakult and Actimel, are known for their higher sugar content.

The focus groups also highlighted the importance of scientific backing and transparency,
especially among participants from the fitness enthusiast and immune health-focused
segments. These consumers expressed a strong preference for probiotic products that were
not just generic supplements but ones that offered specific, scientifically backed health
benefits. They wanted clear evidence that the probiotic strains included in BiomeBoost
would deliver the promised outcomes. In response to this, BiomeBoost committed to
providing transparent information on the scientific studies supporting each bacterial strain
used in their products (Appendix 7.14) This approach will be crucial in building trust with
consumers, establishing BiomeBoost as a credible and research-driven brand.

There was also a widespread preference for products made with natural ingredients and
free from artificial additives and preservatives. This feedback was particularly strong among
the immune health-focused and aging population segments, who were concerned about the
potential adverse effects of synthetic additives. The emphasis on natural ingredients led to
BiomeBoost being formulated without any artificial components, reinforcing the brand’s
commitment to health and wellness. This decision should broaden the appeal of
BiomeBoost, attracting consumers who prioritize clean-label products in their daily routines.

Convenience also emerged as a critical factor during the focus groups. Participants,
especially those with busy lifestyles or regular physical activity, expressed a clear preference
for products that could be seamlessly integrated into their daily routines. They favoured
products that were readily available in supermarkets and health stores, rather than those
requiring purchase from specialty shops or online platforms. This insight was instrumental in
guiding BiomeBoost’s distribution strategy, ensuring that the products would be widely
accessible in mainstream retail channels. Prioritizing convenience, this made it easier for

24
 consumers to incorporate BiomeBoost into everyday life, thereby increasing the likelihood
of consistent use.

The focus groups had a profound impact on the final product design decisions. By directly
addressing the specific needs and preferences identified by potential consumers, we have
developed a product line that exceeds market expectations, positioning itself for success in
a competitive market.

4. Business Model

4.1 Business Model Canvas

Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Manufacturing Product Health Benefits. Customer Service. Health-Conscious
Partner. Development. Retailer Support. Individuals.
Sales and Scientific Backing. Consumer
Distribution Partners. Marketing. Education. Fitness Enthusiasts.
Managing Convenience. Loyalty Program.
Advertising Agency.
Outsourced Immune Health
Partners. Diverse Strains. Focused.
Key Resources Channels
Human Resources. Natural and Safe. Supermarkets Aging Population.
Intellectual Health Stores.
Property. No Sugar. Online E-
Financial Commerce Retail.
Resources. Pharmacies.

Cost Structure Revenue Streams

Cost of outsourcing manufacture. Product sales from selling directly to retailers and
Sales and Marketing fees. through own online platforms.
Outsourcing distribution costs.
R&D costs.
Customer Support.

25
Customer Segments

Health-Conscious Individuals
BiomeBoost targets health-conscious individuals who prioritize maintaining or enhancing
their overall health. These consumers are proactive in incorporating wellness products into
their daily routines and seek high-quality probiotics that support gut health, enhance
nutrient absorption, and promote a balanced microbiome. This segment values
transparency, scientific backing, and products that provide tangible health benefits without
adverse effects such as high sugar content.

Fitness Enthusiasts
Fitness enthusiasts are another significant customer segment for BiomeBoost. These
individuals are dedicated to improving their physical performance and speeding up recovery
times. They are attracted to BiomeBoost’s specialized probiotic formulations, which include
strains aimed at reducing muscle damage and supporting strength and endurance. This
segment prioritizes products that optimize athletic performance and recovery, making
BiomeBoost’s targeted approach particularly appealing.

Immune Health Focused

Consumers focused on immune health, including immunocompromised individuals, are
increasingly aware of the connection between a balanced gut biome and a robust immune
system. They seek products that enhance the body’s natural defences. BiomeBoost’s
immunity-boosting formulations cater directly to this need, offering preventive health
benefits that support overall well-being.

Aging Population
The aging population is another key customer segment. Older adults often face challenges
related to digestive health and seek ways to support overall wellness. This demographic
appreciates the targeted benefits of BiomeBoost's probiotics, which help maintain a healthy
digestive system and support general health as they age. Products that are easy to consume
and free from excessive sugars are particularly appealing to this group.

By targeting these diverse customer segments, BiomeBoost positions itself as a versatile and
comprehensive solution in the probiotic market, catering to a wide range of health needs
and preferences.

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Value Propositions

Health Benefits
BiomeBoost offers significant health benefits by enhancing gut health and overall well-being
through daily intake. Our probiotic formulations are designed to support a balanced
microbiome, which plays a crucial role in digestion, nutrient absorption, and immune
function. Regular consumption of BiomeBoost can help improve digestion, boost the
immune system, and even contribute to better mental health, providing comprehensive
support for your body's needs.

Scientific Backing
BiomeBoost is built on a foundation of scientific research and evidence-based formulations.
Each product is developed with strains of bacteria that have been clinically proven to offer
specific health benefits. This scientific backing ensures that consumers are getting effective
and reliable products that truly make a difference in their health, distinguishing BiomeBoost
from other probiotics on the market. Furthermore, the research conducted on the safety
and efficacy of these bacterial strains, combined with compliance with regulatory
requirements, ensures that BiomeBoost is well-positioned to receive approval from key
regulatory bodies, further validating the quality and credibility of the products.

Convenience
BiomeBoost is designed for convenience, offering an easy-to-use daily supplement in a
small, portable bottle. This makes it simple for consumers to integrate into their daily
routines, whether at home, at work, or on the go. The small bottle size is perfect for quick
consumption and easy transportation, ensuring that maintaining gut health is hassle-free
and accessible.

Diverse Strains
Our products feature a diverse range of beneficial bacterial strains, each selected for their
specific health impacts. This variety maximizes the overall effectiveness of BiomeBoost,
targeting multiple aspects of health such as digestion, immunity, and mental well-being. By
incorporating a wide array of strains, we ensure that our products offer comprehensive gut
health support.

Natural and Safe

BiomeBoost is committed to using high-quality, natural, and safe ingredients. We prioritize
the purity and safety of our products, avoiding harmful additives and sugars that can
counteract the benefits of probiotics. Our formulations are designed to be gentle on the
body while delivering powerful health benefits, making BiomeBoost a trustworthy choice for
consumers seeking natural health solutions.

27
BiomeBoost’s value propositions can best be demonstrated using the value proposition
canvas (Osterwalder et al., 2014).

28
BiomeBoost’s Value Proposition Canvas for articulates how the product line meets the
diverse needs of its targeted customer segments through tailored health benefits,
convenience, and quality. By aligning our products closely with customer jobs, pains, and
gains, BiomeBoost is well-positioned to enhance customer satisfaction and loyalty, ensuring
the brand remains competitive and relevant in the dynamic health supplement market. This
alignment demonstrates our commitment to delivering value that resonates deeply with our
consumers' everyday health goals.

Channels

Key Accounts
BiomeBoost will leverage major UK supermarkets and large chain pharmacies and large
chain health food shops as primary sales channels. These include well-known chains such as
Sainsbury’s, Boots and Holland & Barrett. Such outlets provide a broad reach and high
visibility, ideal for introducing BiomeBoost to health-conscious consumers who frequent
these locations for their regular shopping needs. Supermarkets and pharmacies with
refrigerated sections are particularly suitable for stocking BiomeBoost, ensuring the product
maintains its quality while being easily accessible to consumers.

Independents
Independent health stores and smaller pharmacies represent a critical component of
BiomeBoost’s distribution strategy. These establishments are often seen as trusted sources
of health and wellness products, making them perfect partners for reaching consumers who
prefer shopping in more specialized outlets. Partnering with these independents helps tap
into a customer base that values expert advice and personalized service, enhancing the
credibility and trustworthiness of the BiomeBoost brand.

B2C Sales
E-commerce platforms, particularly through Amazon, play a crucial role in BiomeBoost’s
direct-to-consumer sales strategy. This channel offers the convenience and accessibility that
modern consumers demand, allowing them to purchase BiomeBoost online with delivery
direct to their homes. Utilizing Amazon’s extensive logistics network and refrigerated
delivery options ensures that BiomeBoost maintains its product quality during transit and
expands the brand’s reach beyond traditional retail locations.

By positioning BiomeBoost across these diverse channels, the goal is to ensure widespread
availability and accessibility, meeting consumers wherever they prefer to shop and
establishing a robust presence in the market.

29
Customer Relationships

Retailer Support
BiomeBoost will prioritize strong relationships with retailers. We offer training for retail staff
to ensure they can effectively promote our products and address consumer questions.
Additionally, we supply promotional materials like brochures and in-store displays to
highlight BiomeBoost’s unique benefits. Regular communication keeps retailers informed
about new product releases and promotional campaigns, maintaining a collaborative
partnership.

Customer Service
Responsive customer service is crucial for BiomeBoost. We address consumer inquiries and
issues promptly through various channels, including phone, email, and social media all
managed by a CRM system. Our team is trained to provide detailed information, resolve
concerns, and ensure customer satisfaction. This proactive approach helps build trust and
loyalty and will drive engagement with BiomeBoost.

Loyalty Programs
BiomeBoost will implement loyalty programs to incentivize repeat purchases and referrals.
These programs offer discounts, free products, and exclusive offers to regular customers. By
rewarding loyalty, we aim to build a community of dedicated consumers who consistently
use our products and advocate for the, enhancing customer retention.

Consumer Education
Education is a key component of our customer relationship strategy. We provide
information about gut health and product benefits through our website, social media,
newsletters, and in-store events. Educational content, such as blog posts, videos, and
webinars, helps consumers understand the importance of gut health and how BiomeBoost
can enhance their well-being. We will do this to build trust and deeper connections with our
customers.

Through these strategies, BiomeBoost aims to cultivate strong, long-lasting relationships

with both retailers and consumers, ensuring continued growth and success in the market.

30
Key Resources

Human Resources
BiomeBoost's success will rely heavily on its dedicated team of professionals. The key focus
of the in-house team will be sales and marketing, although we will have the operational
team to supervise manufacturing and distribution. The CEO will be focused on developing
new products and act as the chief science officer.

Intellectual Property
Protecting our unique formulations and brand identity will be vital for BiomeBoost. We will
invest in intellectual property through patents, trademarks, and proprietary formulations.
Although obtaining patent protection appears challenging at the time of writing, if we are
unable to secure our intellectual property through legal means, we will focus on
strengthening our brand to become the trusted source for probiotic supplements.

Financial Resources
Adequate financial resources will be fundamental to BiomeBoost's operations and growth.
Whilst we have tried to minimise the size of the initial capital injection, by relying
significantly on outsourcing, a significant cash injection will be required to fund our daily
operations particularly as we anticipate being loss making in the early years.

Key Activities

Product Development
Product development will be central to our business. This will involve continuous research
and formulation of improved and new probiotic drinks. Our business plan anticipates
continued investment in the earlier years as we strive to improve our portfolio of 3
products. Thereafter we anticipate further investment as we aim to formulate new probiotic
beverages covering categories like expectant and new mothers, the elderly and the running
community. A pipeline of new products will be essential to guarantee the sustainable
growth of the business.

Sales and Marketing

Building brand awareness and driving sales will be crucial for BiomeBoost’s success
especially as there are some large competitors in the market. We anticipate trying to
manage key accounts through our own in-house sales team, since these comprise the
lowest margin revenue category but also the most critical. We will need to supervise the
sales activities of our distribution partners, provide sales support across the whole portfolio
and run the customer support and engagement platforms. Building brand equity into the
BiomeBoost brand will be the central task of the marketing team: we want to become the
trusted leader in the provision of targeted probiotic yoghurt beverages.

31
Managing Outsourced Partners
To minimise investment and to ensure that our costs are as variable as possible we intend to
rely heavily on outsourcing. This will cover key activities like manufacturing and distribution
but also functional legal and financial support. The skills required to do this involve
negotiating and running contracts and maintaining a strong partnership ethos in the way
that we maximise the benefit of these contracts.
Through these key activities, BiomeBoost will be able to deliver high-quality probiotic
products, maintain operational efficiency, and achieve sustainable growth in the market.

Key Partners

Cultetch Biospecialty Products

Cultetch Biospecialty Products is a key supplier of high-quality probiotic bacterial cultures
for BiomeBoost. Their expertise and commitment to quality ensure that we have a reliable
source of the essential ingredients needed for our probiotic drinks. This partnership is
crucial for maintaining the high standards of our products, ensuring that our formulations
are effective and safe for consumers.

BV Dairy
BV Dairy serves as our contract partner in the production and manufacture of BiomeBoost
beverages, providing specialised contract manufacturing services. BV Dairy enables
BiomeBoost to deliver high-quality, consistent products without the need for internal
production facilities.

Reed Boardall
Reed Boardall is our logistics partner, providing refrigerated delivery services to
supermarket distribution centres. This partnership is essential for maintaining the quality
and integrity of our probiotic drinks during transit. Reed Boardall's expertise in
temperature-controlled logistics ensures that our products reach retailers in optimal
condition, preserving their effectiveness and safety.

Cost Structure

Research and Development

A significant portion of BiomeBoost’s budget will be allocated to research and development.
As the CEO is effectively the chief science officer, these will be managed by him and will
involve contracting with 3rd parties to carry out the research. . Investment will be increased
in years 4 and 5 to help develop new products targeting new customer segments from year
6 onwards.

32
Manufacturing
To minimise capital investment and initial cash outflows it is assumed that manufacturing
will take place on a “contract manufacturing” basis with BV Dairy. Whilst this may result in
slightly higher costs initially, all costs will be variable and will scale up or down with revenue.

Sales and Marketing

Sales and marketing expenses will include costs associated with advertising, promotional
materials, and the costs of the advertising agency. Biomeboost will also build an in-house
marketing capability to help manage this activity. Investment in sales strategies and
marketing campaigns is essential for building brand awareness and driving consumer
demand, ensuring BiomeBoost's products reach a wide audience.

Distribution
Distribution costs will cover expenses related to partnering with Reed-Boardall for
refrigerated delivery services. Where appropriate, we will be using their sales capability to
penetrate the independent sector. Costs will cover sales activity, transportation costs,
storage fees. These fees will contribute to maintaining the necessary infrastructure for
temperature-controlled logistics. We expect to pay a per unit fee. Ensuring efficient and
reliable distribution is crucial for preserving the quality and integrity of our product.
Distribution for Amazon/B2C sales will be via a fulfilment house.

Customer Support and Relationship Management

The costs of customer support and maintaining a CRM system are contained within the Sales
and Marketing expense. Maintaining strong engagement with our customers via the
webpage and our CRM system is a fundamental part of our marketing strategy.

Revenue Streams

Product Sales
BiomeBoost’s revenue will come from the sale of probiotic drinks. This includes sales
through major UK supermarkets, health stores and pharmacies of varying sizes, online
retailers and via our website. By ensuring our products are widely available and accessible
through multiple channels, we aim to drive significant sales and generate substantial
revenue.

33
4.2 Marketing Model

Sketches for The Bottle Design for Biomeboost’s Product Range

I chose this design for its simplicity and eye-catching appeal, which are key to standing out
in a competitive market. The minimalist and uniform bottle shape enhances brand
recognition, while the vibrant colours differentiate the products at a glance, appealing
directly to health-conscious consumers. This combination of aesthetic appeal and
functionality aligns perfectly with the preferences of our target audience, making the bottles
both attractive and practical for everyday use.

34
Overall Marketing Strategy

The marketing strategy for BiomeBoost is grounded in an in-depth understanding of the

target audience, and their unique needs that can be satisfied via a probiotic drink.
Recognizing the growing consumer demand for health-oriented products, BiomeBoost will
position itself as a premium brand that combines scientific rigor with natural ingredients to
deliver effective, convenient, and trustworthy probiotic solutions. The strategy is built
around two core pillars: education and personalization. By focusing on educating consumers
about the specific benefits of probiotics and personalizing the experience based on
individual health goals, BiomeBoost aims to build strong brand loyalty and drive market
penetration.

To achieve these objectives, BiomeBoost employs a multi-channel approach that initially

focuses on digital marketing, such as social media, search engine optimisation (SEO),
influencer partnerships as well as press and PR. This marketing approach aims to drive
traffic to our website, which will be launched with a transactional capability. The strategy
emphasizes transparency, education and personalisation leveraging scientific research to
build credibility and trust with health-conscious consumers who demand clear and reliable
information about the products they consume.

This strategy is based on the Zero Moment of Truth (ZMOT) theory (Lecinski, 2011), which
underscores the importance of the online research phase that consumers undergo before
making a purchase decision. By ensuring BiomeBoost’s strong presence in digital spaces
where potential customers seek information—such as search engines, social media, and
health forums—the brand can effectively influence decisions at the critical moment when
consumers are forming their opinions and preferences. This digital engagement is crucial for
driving awareness and converting interest into purchase decisions, ultimately creating a
deeper connection with the brand.

Customer Journey

The customer journey has been modelled through the creation of detailed personas. These
personas are crafted based on market research and customer data, representing different
segments of the target audience. They include demographic details, behaviours,
preferences, and pain points, making them invaluable for visualizing the customer’s
perspective and needs. This approach helps in tailoring marketing strategies that resonate
deeply with each segment and ensuring we have the right touchpoints along the target
consumer’s journey.

By mapping out these touchpoints, BiomeBoost can understand where to focus its
marketing efforts to maximize engagement.

35
Understanding what type of content each persona consumes is crucial. This includes the
kinds of topics they are interested in, the media formats they prefer (such as blogs, social
media, videos, or podcasts), and the tone of voice that resonates with them. This insight
allows BiomeBoost to craft compelling content that not only catches the attention of each
persona but also delivers value that meets their specific expectations and needs.

As a result, BiomeBoost can effectively tailor its marketing content to align with the
interests and behaviours of its audience.

BiomeBoost Active Persona

Persona Details Persona Touchpoints: Persona’s Preferred

o Name: Emily o Social media: Active Content:
o Age: 30 on Instagram and o Detailed articles
o Occupation: Facebook following and videos on the
Marketing Manager fitness influencers benefits of
and part-time o Fitness Apps: probiotics for
fitness instructor Regular user of athletic
o Goals: To maintain MyFitnessPal and performance
a high level of Strava o Testimonials from
fitness and enhance o Health Blogs and athletes who use
personal health Forums: Frequent probiotics
o Challenges: Finding visitor to sites like o Guides on
supplements that Bodybuilding.com integrating
support recovery o Listens to Heart FM supplements into
without artificial on daily commute fitness routines
ingredients

Tailored Marketing Strategy:

o Create and share workout routines and nutrition tips incorporating BiomeBoost
Active on social media.
o Collaborate with fitness content creators to demonstrate the product’s impact on
recovery.
o Feature success stories and testimonials in online fitness communities.

36
BiomeBoost Immuno Persona

Persona Details Persona Touchpoints: Persona’s Preferred

o Name: John o Health News Content:
o Age: 65 Websites: Regular o Articles on immune
o Occupation: Retired reader of WebMD health
schoolteacher and Healthline improvements from
o Goals: To maintain o Community probiotics
an active lifestyle Centers: Active o Wellness tips for
and enhance participant in senior aging adults
immune health community events o Educational content
o Challenges: Finding o Email Newsletters: about managing
reliable and easy- Subscribed to immune health
to-consume health health and wellness naturally
supplements newsletters o Newspaper or Radio
o Reads a daily articles on Health
newspaper every and Wellbeing
day and listens to
Radio 4 and Classic
FM

Tailored Marketing Strategy:

o Publish and distribute informational brochures at community centres discussing the
benefits of BiomeBoost Immuno.
o Send targeted email newsletters featuring immune health tips and customer stories.
o Host webinars with health experts to discuss immune health and the role of
probiotics
o Use the collateral mentioned above to generate press and radio coverage.

BiomeBoost Daily Persona

Persona Details Persona Touchpoints: Persona’s Preferred

o Name: Sarah o Parenting Blogs: Content:
o Age: 35 Follows platforms o Family-friendly
o Occupation: like Scary Mommy recipes
Freelance Graphic for parenting tips incorporating
Designer and o Social media: Active probiotics
mother of two on Pinterest for o Blogs on balancing
o Goals: To balance a family health tips health and busy
hectic schedule and recipes family life
while maintaining a o Online Shopping: o Reviews and
healthy family life Frequently uses recommendations
o Challenges: Amazon to from other parents
Integrating a purchase health
consistent health supplements
regimen into a busy o Regular trips to the
family schedule supermarket
37
Tailored Marketing Strategy:

o Partner with parenting bloggers to create and share content about using BiomeBoost
Daily in family settings.
o Develop Pinterest infographics and posts focused on quick health tips for busy
parents.
o Feature user-generated content showcasing families incorporating BiomeBoost into
their daily routines.

Each marketing approach leverages the unique touchpoints and content preferences of the
personas to ensure the message not only reaches them but resonates and encourages
engagement and conversion.

Customer Acquisition

The marketing strategy is to launch Active and Immuno in the independent sector and
through Amazon/B2C, targeting early adopters and the personas noted above using
primarily digital media supported by press, instore and the Biomeboost website. After a
couple of years, once momentum has been established, the marketing mix will switch to
embracing more mainstream media such as radio, as well as a significant increase in instore
promo to support the launch of Daily through key accounts. Differentiated strategies for
each product cater to the specific habits and preferences of their respective audiences,
ensuring that marketing efforts are as effective as possible in building a strong customer
base for BiomeBoost. This targeted, well-funded approach aims to establish BiomeBoost as
a trusted name in gut health supplements from the outset, leveraging both digital and
physical touchpoints to maximize reach and impact.

BiomeBoost Active Customer Acquisition at Launch

The launch strategy for BiomeBoost Active involves a two year spend of £373k on influencer
partnerships, leveraging their influence on fitness and health enthusiasts through social
media, which is their primary touchpoint. These influencers will not only endorse the
product, but also educate their followers on the specific benefits of targeted bacteria for gut
health, building credibility and trust among a community already keen on fitness and
wellness. A significant spend on social media and SEO will support this strategy

BiomeBoost Immuno Customer Acquisition at Launch

BiomeBoost Immuno adopts a similarly targeted approach, aimed at aging adults and the
immunocompromised. The acquisition strategy is twofold: a two year spend of £238k is
planned for instore and press/PR activity, since this segments primary touchpoints are
physical rather than digital—supermarkets, health stores, and clinics. Therefore, in-store
displays, informational brochures, and live demonstrations will be crucial. This will be

38
supported by the significant spend on social media and SEO previously mentioned. These
efforts ensure that the product’s benefits are communicated directly where these
customers make their health product decisions, making the educational component
accessible and immediately actionable.

BiomeBoost Daily Customer Acquisition at Launch

The strategy for BiomeBoost Daily is designed to target a broader demographic since the
marketing will be focused on driving large volumes through the mass market via key
accounts. A key component of this will be a significant spend across national media, such as
radio stations supported by a significant increase in instore activity close to the point of
purchase. In addition, this product’s wide appeal necessitates a different online presence,
ensuring that whenever potential customers search for health supplements or gut health,
BiomeBoost Daily appears prominently. The webpage will be optimized not only to attract
traffic but to convert visitors into customers through informative content, user testimonials,
and streamlined e-commerce functionalities.

Customer Relationships

Maintaining strong customer relationships is essential for the long-term success of

BiomeBoost and is a core element of personalising the messaging about the BiomeBoost
products. The strategy for customer retention and engagement is multifaceted, focusing on
personalized communication, loyalty programs, and continuous engagement through
content and community building.

Personalized communication is a cornerstone of BiomeBoost’s relationship management. By

leveraging data analytics, the company can send targeted emails and digital messages that
address the specific needs and preferences of each customer. For example, customers who
frequently purchase BiomeBoost Active might receive information on new fitness-related
products or tips on maximizing recovery. This approach not only enhances customer
satisfaction but drives engagement, thereby increasing the likelihood of repeat and stacked
purchases.

Loyalty programs are another critical component, designed to reward customers for their
ongoing engagement with the brand. These programs will include discounts on future
purchases, early access to new products, or exclusive content such as health tips and
recipes. The goal is to create a sense of belonging and appreciation among customers, which
in turn fosters brand loyalty and encourages word-of-mouth promotion.

Customer support is also prioritized, with a robust system in place that includes live chat,
phone support via the CRM system and a comprehensive FAQ section on the company’s
website. Quick and helpful customer service is vital for maintaining trust, particularly in the

39
health supplement industry where consumer confidence in product safety and efficacy is
paramount.

Engagement through content is maintained by regularly updating a blog or vlog series

focused on gut health, wellness, and nutrition. This content serves to educate customers
about the benefits of probiotics and provides practical advice on integrating them into a
healthy lifestyle. Additionally, BiomeBoost actively seeks customer feedback through
surveys and product reviews, demonstrating a commitment to continuous improvement
based on customer input.

Community building is further supported through online forums and social media groups,
where customers can share their experiences and tips for using BiomeBoost products. This
peer-to-peer support network not only enhances customer engagement but also
strengthens the brand’s value proposition as a trusted partner in health and wellness.

Overall, these strategies are designed to create a strong, ongoing relationship with
customers, ensuring they feel valued, educated and engaged with the brand over the long
term. This personalised approach not only enhances customer loyalty but also encourages
organic growth through positive word-of-mouth.

4.3 Financial Model

Overview of Financial Projections

The financial projections model serves as a critical tool for evaluating BiomeBoost’s
feasibility and profitability over a five-year horizon. This model incorporates vital financial
indicators such as revenue forecasts, cost structures, profit margins, and cash flow
projections, providing potential investors with a clear understanding of the business’s
financial trajectory.

BiomeBoost’s financial performance is projected to follow a classic J-curve pattern. In the

early years, significant losses are anticipated due to high launch marketing costs and initial
startup expenses. However, as the business gains momentum, particularly from year four
onward when key supermarket accounts are secured, profitability is expected to rise
sharply. This pattern is reflective of a typical startup growth cycle, where early investments
in brand and market presence lead to exponential returns as the company scales.

The financial model offers a comprehensive overview of these dynamics, supported by

detailed tables and graphs that illustrate the company’s projected financial performance.

40
 5 Year Summary

Year 1/£K Year 2/£K Year 3/£K Year 4/£K Year 5/£K 5-Year CAGR
Revenue 3,771 6501 11,595 25,026 38,664 59.3%
Total Direct Costs 2,747 4,690 8,293 17,997 27,770 58.8%
Gross Margin 1,024 1,811 3,301 7,029 10,894 60.5%
Marketing 754 1,625 2,203 3,754 3,866 38.7%
Contribution 256 257 258 259 260 92.0%
Total SG&A 870 1,259 1,208 1,679 1,807 15.7%
Operating Profit/Loss -601 -1,074 -110 1,596 5,220

The table highlights the substantial growth BiomeBoost is projected to achieve over the five-
year period, with revenue increasing from £3,771k in year one to £38,664k by year five,
representing a robust 59.3% CAGR. Despite significant increases in direct costs and SG&A,
the gross margin also expands considerably, indicating strong operational efficiency. After
early losses, the operating profit/loss line shows a dramatic improvement, culminating in a
significant profit of £5,220k by year five, demonstrating the effectiveness of the company's
growth strategy.

Revenue Projections

The revenue projections highlight BiomeBoost’s growth potential, driven by its three core
products—Active, Immuno, and Daily—across three distinct sales channels: key accounts
(e.g., national pharmacies, supermarkets, and health stores), independent accounts (small
local or regional stores), and Amazon/B2C (e-commerce platforms including Amazon and
the company’s own website).

Initial revenue growth is expected to come from Active and Immuno, which are premium-
priced, specialist products. These products are initially distributed primarily through
independent channels and online platforms like Amazon. As the company expands,
particularly from year four, Daily, which has a lower price point and broader market appeal,
is expected to drive significant growth through key accounts, including major supermarket
chains.

41
 5 Year Net Revenue By Product
25,000.0

20,000.0

15,000.0
Revenue/£

10,000.0

5,000.0

-
1 2 3 4 5
Year

Independents Key A/cs Amazon

The above graph shows the rapid growth of Daily as it becomes a mainstream product,
becoming the most significant contributor to revenue by year four. This growth is crucial as
it ensures that BiomeBoost not only capitalizes on the high margins of its specialist products
but also secures substantial market share through its mainstream product, Daily.

By year five, key accounts are projected to dominate BiomeBoost’s revenue stream, driven
by Daily’s widespread appeal and increased volume sales through supermarket chains. The
transition from niche market channels to mainstream distribution is pivotal in the
company’s growth strategy, facilitating a broad customer base and enhanced brand
Recognition.

%Net Revenue by Sales %Net Revenue by Sales

Channel in Year 1 Channel in Year 5

Independents Key A/cs Amazon Independents Key A/cs Amazon

42
 %Net Revenue by Product %Net Revenue by Product
in Year 1 in Year 5

Active Daily Immuno Active Daily Immuno

The above pie charts illustrate a significant shift in BiomeBoost’s revenue distribution by
sales channel and product between years 1 and 5. In year 1, revenue is heavily reliant on
independent sales channels and the Active product, reflecting the company’s initial focus on
niche, higher-margin markets. However, by year 5, the revenue mix changes dramatically,
with key accounts (such as supermarkets) becoming the dominant sales channel, driven
largely by the Daily product.

Gross Margin Analysis

The gross margin analysis provides insights into the profitability of BiomeBoost’s products
across different sales channels. Active and Immuno are premium products that yield higher
margins due to their specialist nature and targeted customer base. Daily, on the other hand,
is positioned as a more accessible product with lower margins but higher sales volumes,
particularly through supermarket channels.

43
 5 Year Gross Margin Contribution by Channel
12,000

10,000

8,000
Gross Margin/£K

6,000

4,000

2,000

-
1 2 3 4 5
Year

Independents Key A/cs Amazon

Despite Daily’s lower individual margins, the overall gross margin for BiomeBoost improves
from 27.2% in year one to 28.2% by year five. This slight increase is largely attributed to the
growth in sales of Active and Immuno, which, despite their lower volumes, contribute
higher margins per unit. The strategy to balance high-margin specialist products with high-
volume mainstream products ensures a steady improvement in overall profitability.

5 Year %Margin Contribution by Channel

35.0%

30.0%
Gross Margin/£K

25.0%

20.0%
15.0%

10.0%

5.0%

0.0%
1 2 3 4 5
Year

Independents Key A/cs Amazon

The bar chart above shows the movement in Gross Margin per product over the years. Daily
drives significant market share gains albeit at lower margins than the other 2 products,
largely as a result of the higher discounts obtained by supermarkets and key accounts.

44
Marketing Analysis

Marketing expenses are substantial in the early years, accounting for 22.5% and 25% of
revenue in the first two years, respectively. These high costs are justified by the need to
establish the BiomeBoost brand and gain market penetration. As the product gains traction,
marketing efficiency improves, resulting in marketing expenses stabilizing at around 10% of
revenue by the final year, compared to a peak of 25% in year 2. This increased efficiency is a
key driver behind the rise in net operating margins to 14% by year 5.

Year 1 Launch Marketing Mix Year 5 Marketing Mix

Press/PR Radio Press/PR Radio

Advertising Agency SEO Advertising Agency SEO
Social Media Promo Social Media Promo
Instore Influencer Instore Influencer
Loyalty scheme WebPage/CRM Loyalty scheme WebPage/CRM

The marketing mix evolves over time, shifting from targeted digital campaigns in the early
years to mainstream media aimed at supporting key accounts in later years. By year five,
marketing expenses stabilize at approximately 10% of revenue, a reduction that significantly
enhances net operating margins. The increased efficiency in marketing spending,
particularly the focus on radio advertising and in-store promotions, plays a crucial role in
driving the revenue growth associated with key accounts.

45
 Selling, General, and Administrative (SG&A) Expenses

BiomeBoost maintains strict control over its SG&A expenses, ensuring that operational
efficiency improves as the business scales. The headcount is projected to double from six
employees in year one to thirteen by year five, with most new hires focusing on sales and
marketing roles to support revenue growth.

Overall, SG&A levels are kept to a minimum, with growth primarily driven by the inflation
rate, assumed to be 3% in year 1 decreasing to 2% by year 5. There will be significant one-
off legal expenses for patent applications and R&D costs for new product development to be
launched from year 6, resulting in some uneven fluctuations in both professional fees and
product development expenses.

Year 1 Year 2 Year 3 Year 4 Year 5

Payroll & Social Costs 524.2 622.5 852.0 972.4 1,056.4
Other Staff Costs 58.0 59.7 61.2 62.5 63.7
Facilities, IT, Telephony 109.1 137.4 178.0 208.1 228.1
Costs
Professional Fees and 64.0 217.1 84.5 128.6 152.4
Insurance
Product Development 115.0 224.2 101.0 170.0 192.6
Total SG&A 870.3 1,259.2 1,208.0 1,679.2 1,807.3
% of revenue 23.1% 19.4% 10.4% 6.7% 4.7%

As shown in the table, while SG&A expenses grow in absolute terms, they decrease
significantly as a percentage of revenue—from 23.1% in year one to just 4.7% by year five.
This decrease is a key factor in the company’s improved net operating margins, reflecting
BiomeBoost’s ability to scale efficiently while keeping overhead costs under control.

46
Operating Profits and Losses

The financial model projects that BiomeBoost will achieve significant profitability by year
five, driven by improved gross margins, marketing efficiency, and operational scaling. The
company’s operating profit is expected to grow substantially as revenue increases and costs
are managed effectively.

Operating Profit over Time

6,000.0

5,000.0

4,000.0

3,000.0
Operating P/L/£

2,000.0

1,000.0

0.0
0 1 2 3 4 5 6
-1,000.0

-2,000.0
Year

In the first three years, BiomeBoost incurs losses, driven by substantial investments in
product marketing, reflecting intensive efforts to build brand recognition and secure
customers.

The turning point occurs in year three, with losses diminishing rapidly as the company
approaches breakeven. By year four, BiomeBoost begins to generate profit, fuelled by
increased sales, operating efficiencies, and economies of scale. The steep rise in profitability
by year five highlights the success of the company’s growth strategy and the scalability of its
business model. The shape of the curve indicates further profitability from year 6 onwards.

47
Investment Model and Capital Structure

The investment model provides a detailed view of BiomeBoost’s funding strategy, and the
returns expected for early investors. The model includes two rounds of investment, the first
at the startup phase and the second at the end of year five, after the company has
established predictable profits and cash flows.

The initial investment round is expected to come from a venture capital investor (VCF1),
who will contribute £2 million for a 33% share in the company. The valuation of this initial
stake is subjective, influenced by various viewpoints but primarily dependent on the capital
required to reach profitability and the level of control the founder is willing to concede.

Investment Model

VCF Returns Year 1 Year 2 Year 3 Year 4 Year 5

Initial -2,000
Investment
Year 5 Return 10,440
Yearly Total -2,000 0 0 0 0 10,440
Exit Multiple 5.22
IRR 39.2%

The IRR table illustrates that the initial investor achieves a 40% return within five years, with
a 5.2x multiple on their initial investment.

The second funding round, anticipated at the end of year five, is expected to attract interest
from private equity or strategic investors. At this stage, the business is projected to be
profitable and generating positive cash flows, making it an attractive investment
opportunity. The valuation for this round is conservatively assumed to be based on a profit
multiple of six, reflecting the company’s growth prospects and brand strength, tempered by
investor concerns about competitive pressures, the lack of patent protection and
uncertainties about future growth prospects

48
 Cap Table After Second Funding Round

Shareholders Post- Money Shares % Price Per Value/£k

Share/p
Angus Thomas 7,711 51.4% 2,088 16,101
Employee Benefit Trust 500 3.3% 2,088 1,044
VCF 1 2,000 13.3% 2,088 4,176
PEF 1 4,789 31.9% 2,088 10,000
Total 15,000 100.0% 2,088 31,321

The cap table outlines the ownership structure post-investment, with the founder, VC, and
new investors all holding significant stakes. Notably, both the founder and the VC are
expected to partially exit their holdings as part of this round, realizing substantial returns on
their initial investments.

The cap table also highlights the dilution impact of new investments, with the founder’s
stake reducing to 51.4% as additional capital is raised. However, the overall increase in
company valuation offsets this dilution, resulting in a significant gain in the founder’s equity
value, whilst still leaving him in control of his business

5. Discussion and Reflection

The discussion section critically analyses the entrepreneurial journey of BiomeBoost,

reflecting on successes, challenges, and key learnings, while evaluating future uncertainties
and the validity of the business model to guide potential future directions.

5.1 Reflection on the Entrepreneurial Journey

Reflecting on the overall entrepreneurial journey, there were several notable successes,
particularly during the empathizing and ideation phases of the design thinking process.

The empathizing phase was a critical success, largely due to my deep-rooted passion for
helping others. This stems from my personal experience as a Type 1 diabetic, which has
fuelled my desire to create a product that could genuinely improve people’s health,
particularly in areas where conventional products fall short. This passion translated into a
strong commitment to developing an effective product tailored to meet specific consumer
health needs, which is a core principle in the design thinking approach.

49
Success also emerged during the ideation phase, where my background in biochemistry
played a key role. My academic training provided me with the scientific mindset needed to
critically assess the UK probiotic market, identifying key issues such as high sugar content
and non-specific bacterial strains in existing products. Leveraging this knowledge, I was able
to pinpoint a significant gap in the market for a targeted, low-sugar probiotic product. This
scientific understanding allowed me to generate ideas that were both innovative and
grounded in science, leading to the creation of a product that I truly believe can address
these gaps. The ideation process, further supported by my biochemistry background, was
instrumental in shaping the unique value proposition of BiomeBoost since without this
background, I would not have had the ability or the confidence to build a product based on
targeted probiotics.

Another personal success in my entrepreneurial journey was the resilience I demonstrated

during the initial product development phase. Faced with the challenge of creating a
method of introducing targeted probiotics to consumers, that met health standards without
excessive sugar, I encountered some setbacks. I demonstrated resilience by pivoting the
project from a probiotic snack bar, towards developing a probiotic yoghurt drink. This
adaptation not only aligned with consumer needs but also maintained the health integrity of
our product. This experience highlighted my commitment to innovation and quality,
ensuring that BiomeBoost could offer a valuable and health-conscious option in the market.

However, this entrepreneurial journey was not without its challenges. One significant
challenge I encountered was during the focus groups, which were part of the generative
phase. The challenge was managing the varying levels of participation among group
members. Some participants were more vocal and eager to share their preferences, while
others were more reserved, resulting in the potential for an unbalanced representation of
customer desires. The dominant voices in the focus groups could have skewed the product
towards the preferences of a more vocal minority, potentially overlooking the needs and
desires of less outspoken participants.

In the future, I plan to use focus groups more effectively by fostering an environment that
encourages every participant to share their views, whether through direct prompts or
smaller group interactions. I recognize the critical role of the facilitator in ensuring everyone
has a voice and creating an inclusive atmosphere that facilitates open discussion. I believe it
would be beneficial to conduct additional focus groups with members of our target
demographic. The sample size in previous sessions may have been too small to accurately
reflect the broader population's needs and preferences. Going forward, it's crucial to
increase the sample size and amount of feedback while ensuring the focus groups remain
small enough to encourage active participation and effectively represent the target
audience.

50
5.2 Addressing Key Underlying Uncertainties and Assumptions

While the initial phases of the design thinking approach have laid a solid foundation, several
key uncertainties and assumptions underpinning the business model must be addressed to
ensure the venture's long-term viability. There are critical areas where further validation
and refinement are necessary.

One of the most significant uncertainties lies in the absence of prototyping and customer
trials. While I successfully completed the empathizing, defining, and ideating phases of the
design thinking approach, the inability to prototype the product meant that critical market
testing could not be conducted. Although the concept was positively received by focus
group participants, the lack of a tangible product to present to potential customers leaves
the question of demand untested. This presents a significant risk, as the true market
potential of BiomeBoost remains speculative.

To resolve this uncertainty, it is essential to develop a functional prototype of

the BiomeBoost product ideally in small batches to allow for customer trials and taste tests.
The experiment would involve offering samples to a broader and more diverse
audience than the initial focus groups, including potential retailers and a larger set of
consumers within the target group. Surveys and feedback sessions will be conducted to
assess consumer interest, willingness to purchase, and perceived value with particular focus
on taste, packaging and efficacy. By giving survey participants enough supply for a 2- or 3-
month trial, I would hopefully generate anecdotal evidence of efficacy as well as generating
some key marketing insights. Ultimately, the objective would be to obtain feedback to help
further improve the product and refine estimates of consumer demand.

Another significant uncertainty in this venture has been the cost of production, particularly
since BiomeBoost is an innovative product without direct comparisons in the market.
Initially, I used Actimel as a benchmark for pricing, positioning BiomeBoost Immuno and
Active at a higher price point and BiomeBoost Daily at a lower price. For the financial model,
I estimated wholesale prices based on an assumed retail markup of approximately 28%, a
figure supported by various online grocery forums. Subsequently, I sourced external reports
to gauge the gross margins typical within the UK and USA yogurt industries (IBISWorld,
2024). These figures were then adjusted upward to account for BiomeBoost's premium
pricing and its focused single-product strategy.

However, this assumption may not fully capture the production costs associated
with BiomeBoost, potentially leading to inaccuracies in the business plan. To address this, a
detailed cost analysis should be conducted in collaboration with potential manufacturers.
This analysis should be based on the production requirements and volumes planned
for BiomeBoost, including a breakdown of all costs associated with producing BiomeBoosts’

51
drinks, from raw materials to packaging and logistics. Engaging with multiple manufacturers
will provide detailed cost estimates for producing BiomeBoost at various scales, allowing for
a more accurate understanding of the actual production costs. This experiment will ensure
that the gross margin is attainable, reducing the risk of financial shortfalls and supporting
sustainable business growth.

Perhaps the most significant uncertainty—and potential threat—to the business model is
the protection of intellectual property (IP). The guidelines for what can and cannot be
patented in the probiotic space are vague, leading to uncertainty about whether I can
secure IP rights for the novel bacterial blends in each BiomeBoost formula. If I am unable to
patent any element of the product or its production, the business model’s reliance on
marketing-led brand building through launch and continued marketing efforts becomes
even more critical. Without IP protection, the risk of market competition increases,
potentially undermining the brand's market position and value.

To address this uncertainty, it is crucial to conduct a thorough assessment of the

patentability of BiomeBoost’s bacterial blends and production methods. This can be done by
filing provisional patents as a preliminary step and seeking expert legal advice to evaluate
the likelihood of securing full patents. By consulting with an IP lawyer specializing in
biotechnology and probiotics, I can gain clarity on BiomeBoost can be protected through
patents. If patents are secured, they can be leveraged to protect the market position; if not,
the focus will need to shift to building a strong brand presence and rapidly gaining market
share to fend off competition.

Addressing these key uncertainties through targeted experiments will be critical for
validating BiomeBoost’s business model and ensuring its long-term viability.

5.3 Reflection on the Viability of BiomeBoost’s Business Model

Strategically, I believe in the viability of BiomeBoost’s business model in addressing the

significant gap in the probiotic market. The business plan is designed to meet an unmet
need but faces challenges that will determine its long-term sustainability. The market
gap identified, specifically the lack of low-sugar, scientifically backed, targeted probiotic
products tailored to specific health needs, is a real one and presents a substantial
opportunity.

The viability of this model depends on several key factors, with risk management being a
crucial consideration. Developing a range of products tailored to specific health needs
strategically aligns with the growing demand for personalized nutrition. However, launching
a new category of products comes with considerable risk, especially when entering an
established market with innovative offerings. Even if the proposed experiments are

52
successful and provide valuable insights, the risks of introducing a new product line remain
significant. While the differentiation among the three launch products helps reduce some of
these risks by targeting different consumer segments, it cannot fully eliminate the
uncertainties associated with a new market entry.

BiomeBoost’s reliance on scientific validation and transparent communication of product

benefits adds a layer of credibility that should enhance consumer trust and further reduce
risk. In a market where many competitors fail to provide clear information about the strains
used and their specific benefits, BiomeBoost’s commitment to transparency and evidence-
based marketing could be a significant competitive advantage.

Despite the risks outlined above, I remain confident in the strength of the business plan and
believe that further experimentation can help mitigate these risks and provide greater
assurance before launch. However, I’ve come to understand that even the best business
plan and strategy are only as good as their execution. It is execution that will ultimately
determine the long-term sustainability and success of the business model. This realization
both excites and challenges me, as I’ve learned that while a solid strategy is important, it is
the quality of execution that truly drives success in any business.

To maximize execution, I would prioritize hiring the best-in-market sales and marketing
team, along with a highly skilled management team. Assembling top talent in these areas is
essential for effectively implementing our strategy and ensuring long-term sustainability. A
strong team will be critical in driving our business forward, optimizing execution, and
securing a lasting presence in the market.

Ultimately, I will need to build a business which is agile and adaptable, staffed with the best
talent on the market. BiomeBoost must be prepared to experiment, pivot and change
course as needed and where a high degree of operational excellence can deliver the
strategic promise of the business model.

5.4 Conclusion

This entrepreneurial journey, reflected through the lens of BiomeBoost, has profoundly
deepened my understanding of the complexities of business development, from market
analysis to product innovation. It has strengthened my capabilities as an entrepreneur,
teaching me the value of adaptability, resilience, and the importance of empathy in
understanding the demands of the target market. As BiomeBoost moves forward, the
strategies and insights gained here position it to not only thrive in the competitive probiotic
landscape but also to make a lasting impact on the health and well-being of its consumers.

53
6. Bibliography
Ahire, J.J.,, Rohilla, A.,, Kumar, V., and Tiwari, A., 2023. Quality Management of
probiotics: Ensuring Safety and Maximizing Health Benefits. Current Microbiology,
81(1).

Athletic Greens, 2023. Foundational nutrition for every day: AG1. [online] AG1 by Athletic
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 7. Appendices
7.1 5 Year Forecast P&L
Appendix 1
5 Year Forecast P&L

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£K £K £K £K £K CAGR

Revenue 3,771.0 6,500.9 11,594.7 25,025.9 38,664.0 59.3%

Cost of Sales 1,800.5 3,084.6 5,533.4 14,007.7 22,989.2 66.4%

Sales & Distribution Cost 946.6 1,605.7 2,760.0 3,989.5 4,780.9 38.3%

Total Direct Costs 2,747.1 4,690.3 8,293.4 17,997.3 27,770.1 58.8%

Gross Margin 1,023.9 1,810.6 3,301.3 7,028.7 10,893.9 60.5%

% of revenue 27.2% 27.9% 28.5% 28.1% 28.2%

Marketing 754.2 1,625.2 2,203.0 3,753.9 3,866.4 38.7%

% of revenue 20.0% 25.0% 19.0% 15.0% 10.0%

Contribution 270 185 1,098 3,275 7,027 92.0%

% of revenue 7.2% 2.9% 9.5% 13.1% 18.2%

Payroll & Social Costs 524.2 622.5 852.0 972.5 1,056.4 15.0%
Other Staff Costs 58.0 59.7 61.2 62.5 63.7 1.9%
Facilities, IT , Telephony Costs 109.1 137.4 178.0 208.1 228.1 15.9%
Professional Fees and Insurance 64.0 224.2 101.0 170.0 192.6 24.7%
Product Development 115.0 215.5 15.8 266.2 266.5 18.3%

Total SG&A 870.3 1,259.2 1,208.0 1,679.2 1,807.3 15.7%

% of revenue 23.1% 19.4% 10.4% 6.7% 4.7%

Operating Profit/Loss -600.7 -1,073.8 -109.7 1,595.6 5,220.2

% of revenue -15.9% -16.5% -0.9% 6.4% 13.5%

Working Capital Adjt 149.2 79.6 59.9 85.1 267.2

Operating Cashflow -451.4 -994.3 -169.6 1,510.5 4,952.9

59
 7.2 5 Year Revenue Analysis
Appendix 2
5 Year Revenue Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£K £K £K £K £K CAGR
Net Revenue by Sales Channel
Independents 1,422 2,403 4,102 5,715 6,794 36.7%
Y over Y growth 69% 71% 39% 19%
Key A/cs 154 386 1,159 10,482 21,384 168.4%
Y over Y growth 151% 200% 804% 104%
Amazon 2,195 3,709 6,330 8,820 10,485 36.7%
Y over Y growth 69% 71% 39% 19%

Total Net Revenue 3,771 6,501 11,595 25,026 38,664 59.3%

Y over Y growth 72% 78% 116% 54%

Net Yearly Revenue By Product

Active 1,874 3,445 6,562 12,011 16,770 55.0%
Y over Y growth 84% 90% 83% 40%
Daily 435 726 1,470 5,914 10,993 90.7%
Y over Y growth 67% 102% 302% 86%
Immuno 1,462 2,326 3,559 7,092 10,900 49.5%
Y over Y growth 59% 53% 99% 54%
Total Net Revenue 3,771 6,500 11,594 25,022 38,664 59.3%
Y over Y growth 72% 78% 116% 55%
Revenue by channel by product
Independents Active 717 1,306 2,432 3,507 4,114 41.8%
Daily 149 230 413 590 782 39.3%
Immuno 556 867 1,257 1,618 1,898 27.8%
Key A/cs Active 50 125 377 3,092 6,307 163.6%
Daily 56 141 420 4,414 9,004 175.9%
Immuno 48 120 363 2,977 6,073 163.6%
Amazon/B2C Active 1,107 2,015 3,753 5,412 6,349 41.8%
Daily 230 355 637 910 1,207 39.3%
Immuno 858 1,338 1,939 2,497 2,929 27.8%

Total Net Revenue 3,771 6,498 11,591 25,017 38,663 59.3%

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

Units Units Units Units Units CAGR
Units by Product
Active 425,000 755,000 1,404,000 2,764,350 3,991,815 56.5%
Y over Y growth 78% 86% 97% 44%
Daily 120,000 200,000 412,500 2,017,500 3,777,750 99.3%
Y over Y growth 67% 106% 389% 87%
Immuno 345,000 532,500 805,500 1,822,500 2,908,688 53.2%
Y over Y growth 54% 51% 126% 60%
Total Units by Product 890,000 1,487,500 2,622,000 6,604,350 10,678,253 64.4%
Y over Y growth 67% 76% 152% 62%

60
 7.3 5 Year Revenue AssumptionsAppendix 3
5 Year Revenue Assumptions

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£ £ £ £ £ CAGR

Retail Price per unit Active 5.40 5.62 5.81 5.99 6.11 2.5%
Price De/Inflation 4% 4% 3% 2%
Daily 4.60 4.74 4.86 4.95 5.05 1.9%
3% 3% 2% 2%
Immuno 5.20 5.41 5.60 5.77 5.88 2.5%
4% 4% 3% 2%

Wholesale Price per unit Active 3.89 4.04 4.19 4.31 4.40 2.5%
Price De/Inflation
Daily 3.31 3.41 3.50 3.57 3.64 1.9%
Discount off Retail 28.0%
Immuno 3.74 3.89 4.03 4.15 4.23 2.5%

After Discount net price per Unit per Channel

Independents Active 3.50 3.64 3.77 3.88 3.96 2.5%

Daily 2.98 3.07 3.15 3.21 3.27 1.9%
Immuno 3.37 3.50 3.63 3.74 3.81 2.5%
Key A/cs Active 3.30 3.34 3.35 3.23 3.30 0.0%
Daily 2.82 2.81 2.80 2.67 2.73 -0.6%
Immuno 3.18 3.21 3.22 3.11 3.18 0.0%
Amazon/B2C Active 5.40 5.62 5.81 5.99 6.11 2.5%
Daily 4.60 4.74 4.86 4.95 5.05 1.9%
Immuno 5.20 5.41 5.60 5.77 5.88 2.5%

Channel Units & Growth Rates Units Units Units Units Units

Units Independents Active 205,000 358,750 645,750 904,050 1,039,658 38.4%

Daily 50,000 75,000 131,250 183,750 238,875 36.7%
Immuno 165,000 247,500 346,500 433,125 498,094 24.7%
Key A/cs Active 15,000 37,500 112,500 956,250 1,912,500 163.7%
Daily 20,000 50,000 150,000 1,650,000 3,300,000 177.6%
Immuno 15,000 37,500 112,500 956,250 1,912,500 163.7%
Amazon/B2C Active 205,000 358,750 645,750 904,050 1,039,658 38.4%
Daily 50,000 75,000 131,250 183,750 238,875 36.7%
Immuno 165,000 247,500 346,500 433,125 498,094 24.7%

Total Units 890,000 1,487,500 2,622,000 6,604,350 10,678,253 64.4%

% % % % %

Growth Rates Independents Active 75.0% 80.0% 40.0% 15.0%

Daily 50.0% 75.0% 40.0% 30.0%
Immuno 50.0% 40.0% 25.0% 15.0%
Key A/cs Active 150.0% 200.0% 750.0% 100.0%
Daily 150.0% 200.0% 1000.0% 100.0%
Immuno 150.0% 200.0% 750.0% 100.0%
Amazon/B2C Active 75.0% 80.0% 40.0% 15.0%
Daily 50.0% 75.0% 40.0% 30.0%
Immuno 50.0% 40.0% 25.0% 15.0%

% % % % %

Discount Rates Independents Active 10.0% 10.0% 10.0% 10.0% 10.0%

Daily 10.0% 10.0% 10.0% 10.0% 10.0%
Immuno 10.0% 10.0% 10.0% 10.0% 10.0%
Key A/cs Active 15.0% 17.5% 20.0% 25.0% 25.0%
Daily 15.0% 17.5% 20.0% 25.0% 25.0%
Immuno 15.0% 17.5% 20.0% 25.0% 25.0%
Amazon/B2C Active 0.0% 0.0% 0.0% 0.0% 0.0%
Daily 0.0% 0.0% 0.0% 0.0% 0.0%
Immuno 0.0% 0.0% 0.0% 0.0% 0.0%

61
7.4 5 Year Margin Analysis Appendix 4
5 Year Margin Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£k £k £k £k £k CAGR
Gross Margin

Independents Active 211.0 395.1 756.4 1,180.2 1,384.4 45.7%

Daily 38.7 60.4 109.6 168.3 223.2 42.0%
Immuno 151.0 243.2 363.3 509.4 597.5 31.7%
Independents Total 400.7 698.7 1,229.3 1,857.9 2,205.1 40.6%
Key A/cs Active 16.3 40.0 118.6 877.3 1852.9 157.6%
Daily 16.5 38.9 110.6 981.9 2093.1 163.5%
Immuno 14.6 35.6 105.3 767.4 1626.3 156.7%
Key A/cs Total 47.4 114.6 334.4 2,626.7 5,572.2 159.4%
Amazon/B2C Active 299.3 555.8 1,055.7 1,595.9 1,935.4 45.3%
Daily 57.0 88.8 160.5 238.2 328.0 41.9%
Immuno 219.5 350.0 518.0 701.2 851.8 31.2%
Amazon/B2C Total 575.8 994.5 1,734.2 2,535.3 3,115.2 40.2%

Gross Margin Total 1,023.9 1,807.7 3,297.9 7,019.8 10,892.5 60.5%

Gross Margin % % % % % %

Independents Active 29.4% 30.3% 31.1% 33.6% 33.6%

Daily 25.9% 26.2% 26.5% 28.5% 28.5%
Immuno 27.2% 28.0% 28.9% 31.5% 31.5%
Independents Total 28.2% 29.1% 30.0% 32.5% 32.5%
Key A/cs Active 33.0% 32.0% 31.5% 28.4% 29.4%
Daily 29.3% 27.6% 26.4% 22.2% 23.2%
Immuno 30.6% 29.6% 29.0% 25.8% 26.8%
Key A/cs Total 30.9% 29.7% 28.9% 25.1% 26.1%
Amazon/B2C Active 27.0% 27.6% 28.1% 29.5% 30.5%
Daily 24.8% 25.0% 25.2% 26.2% 27.2%
Immuno 25.6% 26.1% 26.7% 28.1% 29.1%
Amazon/B2C Total 26.2% 26.8% 27.4% 28.7% 29.7%

Gross Margin % 27.2% 27.8% 28.5% 28.1% 28.2%

Independent Gross Margin £k £k £k £k £k

Revenue 1,422.4 2,403.2 4,102.1 5,715.2 6,794.2 36.7%

Cost of Sales 851.0 1,416.1 2,380.5 3,285.8 3,909.7 35.7%
Distribution Cost 170.7 288.4 492.2 571.5 679.4 31.8%
Gross margin 400.7 698.7 1,229.3 1,857.9 2,205.1 40.6%
Gross Margin % 28.2% 29.1% 30.0% 32.5% 32.5%
Key A/cs Gross Margin

Revenue 153.6 386.3 1,159.0 10,482.1 21,383.6 168.4%

Cost of Sales 98.5 252.4 772.4 7,436.2 15,169.9 173.8%
Distribution Cost 7.7 19.3 52.2 419.3 641.5 142.3%
Gross margin 47.4 114.6 334.4 2,626.7 5,572.2 159.4%
Gross Margin % 30.9% 29.7% 28.9% 25.1% 26.1%
Amazon/B2C Gross Margin

Revenue 2,195.0 3,708.6 6,330.3 8,819.8 10,484.8 36.7%

Cost of Sales 851.0 1,416.1 2,380.5 3,285.8 3,909.7 35.7%
Distribution Cost 768.3 1,298.0 2,215.6 2,998.7 3,460.0 35.1%
Gross margin 575.8 994.5 1,734.2 2,535.3 3,115.2 40.2%
Gross Margin % 26.2% 26.8% 27.4% 28.7% 29.7%
Active Gross Margin

Revenue 1,873.9 3,445.4 6,562.4 12,011.3 16,769.6 55.0%

Cost of Sales 871.3 1,586.4 3,009.2 6,043.3 8,901.2 59.2%
Distribution Cost 476.0 868.1 1,622.5 2,314.6 2,695.7 41.5%
Gross margin 526.6 990.9 1,930.7 3,653.4 5,172.6 57.9%
Gross Margin % 28.1% 28.8% 29.4% 30.4% 30.8%
Daily Gross Margin

Revenue 435.3 726.3 1,470.0 5,913.7 10,992.9 90.7%

Cost of Sales 222.0 379.3 797.8 3,980.2 7,602.0 102.7%
Distribution Cost 101.2 159.0 291.5 545.0 746.6 49.1%
Gross margin 112.1 188.0 380.7 1,388.4 2,644.2 88.2%
Gross Margin % 25.8% 25.9% 25.9% 23.5% 24.1%
Immuno Gross Margin

Revenue 1,461.7 2,326.3 3,558.9 7,092.1 10,900.1 49.5%

Cost of Sales 707.3 1,118.9 1,726.4 3,984.2 6,486.0 55.8%
Distribution Cost 369.4 578.6 845.9 1,129.9 1,338.6 29.4%
Gross margin 385.1 628.8 986.6 1,978.0 3,075.6 51.5%
Gross Margin % 26.3% 27.0% 27.7% 27.9% 28.2%

62
 Appendix 5
7.5 5 Year Cost of Sales Analysis
5 Year Cost of Sales Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£ £ £ £ £ CAGR
Cost of sales by Product
Active 871,250 1,586,444 3,009,158 6,043,257 8,901,202 59.2%
Daily 222,000 379,250 797,847 3,980,242 7,602,026 102.7%
Immuno 707,250 1,118,916 1,726,408 3,984,241 6,485,976 55.8%

Total Cost of Sales 1,800,500 3,084,609 5,533,413 14,007,741 22,989,203 66.4%

Cost of Sales as a % of net revenue
Active 46.5% 46.0% 45.9% 50.3% 53.1%
Daily 51.0% 52.2% 54.3% 67.3% 69.2%
Immuno 48.4% 48.1% 48.5% 56.2% 59.5%

Total % of revenue 47.7% 47.5% 47.7% 56.0% 59.5%

Cost of sales by channel
Independents 851,000 1,416,102 2,380,525 3,285,765 3,909,667
Key A/cs 98,500 252,406 772,363 7,436,210 15,169,869 35.7%
Amazon 851,000 1,416,102 2,380,525 3,285,765 3,909,667 173.8%
35.7%
Total Cost of Sales 1,800,500 3,084,609 5,533,413 14,007,741 22,989,203
Cost of Sales by channel as % of net revenue 66.4%
Independents 59.8% 58.9% 58.0% 57.5% 57.5%
Key A/cs 64.1% 65.3% 66.6% 70.9% 70.9%
Amazon 38.8% 38.2% 37.6% 37.3% 37.3%

Total % of revenue 47.7% 47.5% 47.7% 56.0% 59.5%

Distribution Costs by Segment

Independents 170,683 288,378 492,246 571,521 679,418 31.8%
Key A/cs 7,681 19,314 52,153 419,286 641,507 142.3%
Amazon 768,250 1,298,000 2,215,615 2,998,719 3,459,999 35.1%

Total Distribution Cost 946,614 1,605,692 2,760,014 3,989,526 4,780,924 38.3%

63
7.6 5 Year Cost of Sales AssumptionsAppendix 6
5 Year Cost of Sales Assumptions

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£ £ £ £ £ CAGR

Manufacturing Cost Active 2.05 2.10 2.14 2.19 2.23 1.7%

Cost De/Inflation 2.5% 2.0% 2.0% 2.0%
Daily 1.85 1.90 1.93 1.97 2.01 1.7%
2.5% 2.0% 2.0% 2.0%
Immuno 2.05 2.10 2.14 2.19 2.23 1.7%
2.5% 2.0% 2.0% 2.0%

Distribution Fee Independents 12.0% 12.0% 12.0% 10.0% 10.0%

Key A/cs 5.0% 5.0% 4.5% 4.0% 3.0%
Amazon 35.0% 35.0% 35.0% 34.0% 33.0%

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 7.7 5 Year Marketing Mix

Appendix 7
5 Year Marketing Mix

Year 1 Year 2 Year 3 Year 4 Year 5

£k £k £k £k £k

Marketing % 20% 25% 19% 15% 10%

Marketing Spend 754.2 1,625.2 2,203.0 3,753.9 3,866.4

Allocation by type
Press/PR 75.4 162.5 220.3 187.7 193.3
Radio - - - 619.4 753.9
Advertising Agency 37.7 65.0 66.1 112.6 116.0
SEO 113.1 243.8 330.5 469.2 386.6
Social Media 132.0 284.4 385.5 469.2 483.3
Promo - - 110.2 187.7 193.3
Instore 75.4 162.5 220.3 656.9 676.6
Influencer 113.1 260.0 264.4 206.5 193.3
Loyalty scheme 56.6 121.9 165.2 281.5 290.0
WebPage/CRM 150.8 325.0 440.6 563.1 580.0

Total 754.2 1,625.2 2,203.0 3,753.9 3,866.4

Allocation by %

Press/PR 10.0% 10.0% 10.0% 5.0% 5.0%

Radio 16.5% 19.5%
Advertising Agency 5.0% 4.0% 3.0% 3.0% 3.0%
SEO 15.0% 15.0% 15.0% 12.5% 10.0%
Social Media 17.5% 17.5% 17.5% 12.5% 12.5%
Promo 5.0% 5.0% 5.0%
Instore 10.0% 10.0% 10.0% 17.5% 17.5%
Influencer 15.0% 16.0% 12.0% 5.5% 5.0%
Loyalty scheme 7.5% 7.5% 7.5% 7.5% 7.5%
WebPage/CRM 20.0% 20.0% 20.0% 15.0% 15.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0%

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 7.8 5 Year Headcount and Salaries
Appendix 8
5 Year Headcount & Salaries

Headcount and Salaries Year 1 Year 2 Year 3 Year 4 Year 5

£ £ £ £ £
Executive
Managing Director & CSO 100,000 102,000 104,040 107,161 110,376
Sales Director 80,000 81,600 83,232 85,729 88,301
Marketing Director 85,000 87,550 90,177

Total Executive Pay 180,000 183,600 272,272 280,440 288,853

Executive Bonus 59,940 61,139 90,667 93,387 96,188

Marketing Manager 50,000 51,000 52,020 53,581 55,188

Junior Marketing Exec 33,000 33,660 34,670 35,710
Junior Marketing Exec 35,000 36,050
Operations Manager 50,000 51,000 52,020 53,581 55,188
Admin Assistant 28,000 28,840 29,705
Senior Sales Manager 45,000 45,900 46,818 48,223 49,669
Junior Sales Exec 35,000 35,700 36,414 37,506 38,632
Junior Sales Exec 32,000 32,640 33,619 34,628
Junior Sales Exec 35,000 36,050 37,132
Junior Sales Exec 35,000 36,050
Sales Manager 40,000

Total Staff Pay 180,000 248,600 316,572 396,069 447,951

Staff Bonus 31,500 43,505 55,400 69,312 78,391

Total Headcount 6 8 11 13 14
Total Pay 360,000 432,200 588,844 676,509 736,805
Total Bonus 91,440 104,644 146,067 162,699 174,580
Employers National Insurance 54,764 64,038 87,604 99,485 108,190
Pension Contribution 18,000 21,610 29,442 33,825 36,840

Total Payroll Costs and NI 524,204 622,492 851,957 972,519 1,056,414

Wage inflation
Exec 2.0% 2.0% 3.0% 3.0%
Staff 2.0% 2.0% 3.0% 3.0%

Target Bonus
Exec 33.3% 33.3% 33.3% 33.3% 33.3%
Staff 17.5% 17.5% 17.5% 17.5% 17.5%

National Insurance Rate 13.8% 13.8% 13.8% 13.8% 13.8%

Employer Pension Contribution 5.0% 5.0% 5.0% 5.0% 5.0%

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 Appendix 9
7.9 5 Year SG&A 5 Year SG&A

Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

£ £ £ £ £ CAGR

Salaries 360,000 432,200 588,844 676,509 736,805 15.4%

Bonus 91,440 104,644 146,067 162,699 174,580 13.8%
Social Costs 54,764 64,038 87,604 99,485 108,190 14.6%
Pension 18,000 21,610 29,442 33,825 36,840 15.4%

Total Payroll Costs 524,204 622,492 851,957 972,519 1,056,414 15.0%

T&E 24,000 24,720 25,338 25,845 26,362 1.9%

Training 5,000 5,150 5,279 5,384 5,492 1.9%
Charitable Donations 24,000 24,720 25,338 25,845 26,362 1.9%
Subscriptions 5,000 5,150 5,279 5,384 5,492 1.9%

Total Other Staff Costs 58,000 59,740 61,234 62,458 63,707 1.9%

We Work 33,120 44,160 60,720 71,760 77,280 18.5%

Meeting Costs 12,000 12,360 12,669 12,922 13,181 1.9%
Telephone & Network 36,000 48,000 66,000 78,000 84,000 18.5%
IT 20,000 24,600 30,135 36,765 44,853 17.5%
Subsistence 6,000 6,180 6,335 6,461 6,590 1.9%
Postage & Messengers 2,000 2,060 2,112 2,154 2,197 1.9%

Total Facilities, IT. Telephony Costs 109,120 137,360 177,970 208,062 228,101 15.9%

Insurance 10,000 10,300 10,558 10,769 10,984 1.9%

Outsource Finance 24,000 32,969 58,805 126,914 148,680 44.0%
Legal Fees 10,000 160,300 10,558 10,769 10,984 1.9%
Consulting & Temps 20,000 20,600 21,115 21,537 21,968 1.9%

Total Professional Fees & Insurance 64,000 224,169 101,035 169,989 192,616 24.7%

R&D 100,000 200,000 - 250,000 250,000 20.1%

Conferences 15,000 15,450 15,836 16,153 16,476 1.9%

Total Product Devpt 115,000 215,450 15,836 266,153 266,476 18.3%

Total SG&A 870,324 1,259,211 1,208,032 1,679,181 1,807,315 15.7%

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 7.10 5 Year SG&A Assumptions Appendix 10
5 Year SG&A Assumptions

Year 1 Year 2 Year 3 Year 4 Year 5

£ £ £ £ £

T&E Start at £2k a month 24,000 24,720 25,338 25,845 26,362

Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Training Start at £5k a year 5,000 5,150 5,279 5,384 5,492

Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Charitable Donation Start at £24k a year 24,000 24,720 25,338 25,845 26,362
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Subscriptions Start at £5k a year 5,000 5,150 5,279 5,384 5,492

Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

We Work 2 days 46 weeks for all staff. Unit cost per seat 60 33,120 44,160 60,720 71,760 77,280
Meeting Costs £3k for Quarterly all co. & sales meetings 12,000 12,360 12,669 12,922 13,181
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Telephone & Network Per handset per month per employee 500 36,000 48,000 66,000 78,000 84,000
Grow at inflation 2.5% 2.0% 2.0% 2.0%

IT Server,webhosting, sundry devpt, license fees 20,000 20,600 21,115 21,537 21,968
Grow at inflation plus 20% 3.0% 2.5% 2.0% 2.0% 2.0%

Subsistence Taxis and meals for late work £500 a month 6,000 6,180 6,335 6,461 6,590
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Postage and Messengers Allowance at 250 a month 2,000 2,060 2,112 2,154 2,197
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Insurance £10k a year , employers and 3rd party liability 10,000 10,300 10,558 10,769 10,984
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Finance Start at £2k a month full service bookkeeping 24,000 32,969 58,805 126,914 148,680
Grow at revenue growth minus 35% 37.4% 78.4% 115.8% 17.1%

Legal Fees Retainer Start at £10k a year for sundry legal matters 10,000 10,300 10,558 10,769 10,984
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%
Patent protection 150,000

Consulting & Temps Start at £20k a year 20,000 20,600 21,115 21,537 21,968
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

R&D Continued research, patent protection (1 & 2). 100,000 200,000 250,000 250,000
New product research (3&4)

Conferences Attendance at relevant industry events 15,000 15,450 15,836 16,153 16,476
Grow at inflation 3.0% 2.5% 2.0% 2.0% 2.0%

Inflation Rate 3.0% 2.5% 2.0% 2.0% 2.0%

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 7.11 Working Capital Assumptions
Appendix 11
Working Capital assumptions

Year 1 Year 2 Year 3 Year 4 Year 5

Assets £ £ £ £ £

Inventory days of sales 15 -73,993 -126,765 -227,401 -575,661 -944,762

Debtors days
Independents 45 -175,359 -296,279 -505,732 -704,614 -837,639
Key accounts 30 -12,626 -31,749 -95,257 -861,546 -1,757,555
Amazon 15 -90,205 -152,407 -260,150 -362,456 -430,884

Total -352,184 -607,200 -1,088,540 -2,504,277 -3,970,839

Liabilities

Distribution Creditor 30 77,804 131,975 226,850 327,906 392,953

Manufacturing Creditor 45 221,979 380,294 682,202 1,726,982 2,834,285
Marketing Creditor 30 61,989 133,521 181,015 308,430 317,775
Bonus Creditor 365 91,440 104,644 117,762 133,545 144,551
Pension & NI Creditor 30 5,981 7,040 8,089 9,377 10,289
Non Payroll SG&A 45 42,219 78,525 41,517 81,854 87,558

Total 501,411 835,998 1,257,435 2,588,094 3,787,411

Beginning of Year NWC 0 149,227 228,798 168,895 83,817

End of Year NWC 149,227 228,798 168,895 83,817 -183,428

Movement 149,227 79,571 -59,903 -85,078 -267,245

69
7.12 Appendix 12
Venture Capitalist 1 IRR Calculation
Venture Capitalist 1 IRR Calculation

Year Year Year Year Year

VCF Returns 1 2 3 4 5
£ £ £ £ £

Initial Investment -2,000

Year 5 Return 10,440

Yearly Total -2,000 0 0 0 0 10,440

Exit Multiple 5.22

IRR 39.2%

NPV @ 40% 10,440.4

Year 5 return equals cash proceeds from sale plus post money value of remaining investment

70
 Appendix 13
Summarised Cap Tables 7.13
At inception Pre-Funding Round 1 Pre-Funding Round 2

Price per Price per Price per Disposal

Shares % Share (p) Value £k Shares % Share (p) Value £k Shares % Share (p) Value £k Proceeds

Angus Thomas 9,500 95.0% 100 9,500.0 9,500 95.0% 400 3,800 9,500 63.3% 2,088 19,837

Employee Benefit Trust 500 5.0% 100 500.0 500 5.0% 400 200 500 3.3% 2,088 1,044

VCF 1 0.0% 5,000 33.3% 2,088 10,440

PEF 1 0.0% - 0.0% - -

Total 10,000 100.0% 10,000.0 10,000 100.0% 4,000 15,000 100.0% 2,088 31,321

Pre-money valuation £k 10,000 4,000,000 31,321,072

Multiple of Profit N/A 6
Summarised Cap Tables

Post Money Valuation Post Money Valuation

Price per Post-Money Price per

Shares % Share (p) Value £k Shareholders Shares % Share (p) Value £k

Angus Thomas 9,500 63.3% 400 3,800 Angus Thomas 7,711 51.4% 2,088 16,101 3,735.79

Employee Benefit Trust 500 3.3% 400 200 EBT 500 3.3% 2,088 1,044

VCF 1 5,000 33.3% 400 2,000 VCF 1 2,000 13.3% 2,088 4,176 6,264.21

PEF 1 0.0% PEF 1 4,789 31.9% 2,088 10,000

Total 15,000 100.0% 400 6,000 Total 15,000 100.0% 2,088 31,321

Pre Money Valuation 4,000,000 31,321,072

New Money 2,000,000 10,000,000

Post Money Valuation for Calculation Purposes 6,000,000 41,321,072

Notes Notes Notes

Company established with 10,000 £1 shares and 5% of equity put into EBT Negotiated value of £4m pre-money leads to VCF 1 Pre-money valuation of 32,394k based on 6 x multiple of profits. However VCF decides to
for benefit of employees investing £2m to acquire 33% of the business on a dispose of 60% of their shares and AT sells 18.8% of his equity. As proceeds go to investors
post money basis rather than business post-money valuation unchanged. AT still retains majority control

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7.14 Scientific Background of Probiotic Blends in BiomeBoost Products

Each bottle in the BiomeBoost range has been meticulously crafted with a precise blend of
probiotic bacteria, tailored to enhance specific aspects of health—daily wellness, immune
support, or active performance. These blends are the result of extensive research and
testing to ensure they provide the optimal balance of probiotics for each intended health
benefit. For daily health, the blend focuses on maintaining overall gut balance and
enhancing digestive wellness. The immune formula is designed to bolster the body's natural
defenses, supporting a robust immune response. Meanwhile, the active blend is engineered
to improve physical performance and recovery, catering to the needs of athletes and active
individuals.

The specific blend of bacteria in each probiotic formula are as follows:

1. Strength and Endurance Probiotic Culture (BiomeBoost Active)

• Veillonella atypica: Found in the microbiota of athletes, Veillonella atypica has been
studied for its potential to metabolize lactate into propionate, a short-chain fatty
acid that may enhance energy production and endurance. This metabolic pathway
could explain the improved performance and recovery observed in athletes with
higher levels of this bacteria. (Scheiman et al., 2019) (Sabater et al., 2023) (Han et al.,
2020)
• Lactobacillus reuteri: Known for its health benefits across various systems,
Lactobacillus reuteri has been shown to enhance muscle mass and function by
increasing serum levels of insulin-like growth factor 1 (IGF-1), a key hormone in
muscle growth and repair. (Poutahidis et al., 2014)
• Lactobacillus plantarum: This strain has been observed to improve muscle mass and
exercise performance, potentially by enhancing amino acid absorption and reducing
inflammation, thus supporting muscle recovery and physical performance.
(Schwarzer et al., 2016)

2. Gut Health and Digestion Probiotic Culture (BiomeBoost Daily)

• Lactobacillus plantarum: Besides its benefits in athletic performance, Lactobacillus

plantarum is crucial in maintaining intestinal permeability, enhancing nutrient
absorption, and stabilizing gut microbiota, which supports overall digestive health.
(Liu et al., 2018)
• Bifidobacterium longum: The bacteria help maintain a healthy gut microbiota,
crucial for proper digestion and nutrient absorption. It’s also known to reduce
gastrointestinal symptoms such as bloating and stomach discomfort (Yao et al.,
2021)
• Lactobacillus acidophilus: Commonly used to treat and prevent digestive disorders,
Lactobacillus acidophilus helps balance gut microbiota and has been linked to
improved digestive health and the reduction of inflammatory conditions. (Gao et al.,
2022)

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3. Immune Support Probiotic Culture (BiomeBoost Immuno)

Lactobacillus brevis: Known to boost systemic immunity, Lactobacillus brevis enhances the
production of natural antibodies and may help in reducing the incidence of common
infections. (Fang et al., 2018)
Bifidobacterium bifidum: The presence of Bifidobacterium bifidum in the gut boosts the
immune system by increasing the production of certain antibodies and enhancing the
overall composition of gut microbiota, which helps fight off harmful bacteria and pathogens.
(Turroni et al., 2014)
Akkermansia muciniphila: The presence of these bacteria has been linked to improving the
mucosal layer of the gut, which plays a crucial role in protecting against pathogens and
maintaining immune balance. (Rodrigues et al., 2022)
Faecalibacterium prausnitzii: Known for its anti-inflammatory properties, Faecalibacterium
prausnitzii is crucial in maintaining gut health, and supports overall immune function by
modulating immune responses. (Effendi et al., 2022)

73