Omnichannel retail in China: Chromadex targets ‘blue-hat’ registration for Tru Niagen within two years

15-Jun-2022 - Last updated on 15-Jun-2022 at 01:02 GMT

A bottle of Tru Niagen. © Tru Niagen Australia

America’s nicotinamide riboside (NR) maker Chromadex is eyeing omnichannel retail in China and is confident of achieving the ‘blue-hat’ health foods registration status – required for normal trade of health foods in China – in the next 24 months or less.

Chromadex recently announced a joint venture with three other companies to facilitate the distribution of Tru Niagen via all channels in China.

The JV will consist of Chromadex Asia Limited, Crystal Lake Developments Limited, Pioneer Idea Holdings Limited, and Hong Kong Taikuk (China) Group Limited.

The amount of investment in the JV is initially US$4m.

“The JV will consist of four partners, two of them are already important investors in Chromadex (referring to Crystal Lake Developments and Pioneer Idea Holdings), the third is Chromadex and the fourth is Taikuk – which is an enterprise which has a relationship with Sinopharm and is helping us in our relationship with Sinopharm,” Chromadex CEO Rob Fried told NutraIngredients-Asia.

Earlier in September last year, Chromadex also announced that it had struck a deal with Sinopharm Xingsha Pharmaceuticals for the distribution of Tru Niagen in China.

Fried said that the JV, which would be officially formed in July or August this year, would be responsible for the distribution of Tru Niagen in all channels in China, including normal trade and cross-border e-commerce (CBEC).

It will also assign CBEC operations to Sinopharm which is also in charge of attaining the blue-hat registration for Tru Niagen with the Chinese regulator State Administration of Market Regulation (SAMR).

‘Blue-hat’ registration is required for health foods containing ingredients that are not listed in the Health Food Raw Material Directory and are sold via the normal trade channels in China, such as offline retail.

“We are estimating 24 months or less and we are hopeful of 24 months because we have also been doing work to that end already,” Fried said of the timeline in gaining the ‘blue-hat’ status.

Over 15k stores in sight

Chromadex is expecting to sell Tru Niagen in about 15,000 retail locations once the ‘blue-hat’ status is secured.

Some of the partnering retailers are Watsons, which is Chromadex’s retail partner in Hong Kong.

“We understand that Watsons has approximately 4,000 retail locations in China and we understand that Sinopharm has between 10,000 and 12,000 pharmacies in China.

“It is our hope that the joint venture would be able to distribute Tru Niagen to those approximately 15,000 locations once regulatory approval (for blue-hat) is achieved,” Fried said.

Tru Niagen is a capsule product contains Niagen – the company’s patented nicotinamide riboside (NR) ingredient.

Nicotinamide riboside is a precursor of nicotinamide adenine dinucleotide (NAD+) – an essential coenzyme regulates cellular metabolism and is found in human body cells.

Supplementation of Niagen has shown to increase NAD+ levels in the body, with the findings published in Scientific Reports.

In April, Chromadex also launched Tru Niagen Immune, which combines Niagen with vitamins C, D, zinc, and curcumin trademarked Theracurmin.

So far, other versions of Tru Niagen include Tru Niagen EX powder sachet targeted at individuals who lead an active lifestyle and Tru Niagen Beauty for skin, hair, and nails health.

For healthy ageing

Fried said that entering China’s normal trade retail was important for Tru Niagen partly because of the firm was targeting the ageing population.

“There are approximately 1.4 billion residents in China, and we have seen estimates that in the coming years there will be as many as 500 million people over the age of 60.

“Healthy ageing is important in China. There is also an increasingly sophisticated market about dietary supplements and healthcare in general.

“The sales of Tru Niagen have been very strong in Hong Kong through our partner Watson.

“We believe that there is already a high level of awareness throughout China of Tru Niagen, so we believe that China represents a very important business opportunity for Tru Niagen and the shareholders of Chromadex. Additionally, we think it is an important opportunity to help the residents of China to improve the way they age.”

In the first three months of FY2022, Chromadex reported net sales of US$17.3m, up US$2.6m or 18 per cent as compared to the first quarter of 2021.

The increase was largely driven by growth in sales of Tru Niagen, primarily via e-commerce, paired with slight growth in sales of Niagen.