BioEffect is betting it can tap into a market for skin regeneration in the U.S.
The skin-care business, which makes a line of products from a plant-based version of epidermal growth factor, is launching its U.S. operations this October with an e-commerce site.
BioEffect, based in Iceland, is already sold through Colette in Paris, Harrod’s and Liberty in London, KaDeWe in Berlin, Harvey Nichols in Hong Kong and Lane Crawford in China. Airlines, including British Airways, Lufthansa and KLM also sell the brand.
The business makes a line of antiaging products that containing a plant-based replica of EGF, which comes from the barley in its Iceland greenhouse. The ingredient essentially tells the skin to create new cells, which can build up skin and reduce wrinkles, according to the company. BioEffect’s product lineup includes: EGF Serum, $160, which is meant to hydrate, restore and revive skin; 30 Day Treatment, $290, which is a highly concentrated antiaging treatment regimen that can be used between one and four times per year; EGF Day Serum, $145, which is lighter and can be used as a primer; EGF Eye Serum, $90, a cooling, antiaging eye product in a rollerball; Body Intensive, $110, a body serum; Volcanic Exfoliator $50, a foaming exfoliator made with volcanic micro-crystalline lava; Daytime for normal skin, $105, and Daytime for dry skin, both day creams.
The company’s plan to launch e-commerce first is part of a broader strategy to educate as well as sell to a U.S. customer. “That gives us a chance to interface directly to the U.S. consumer,” Grétarsson said. “We want to be having that discussion, provide you with proper education and have the opportunity to tell you about our science and our background, show you our greenhouse and connect you to what we have been doing for the last six or seven years in terms of BioEffect and our research.”
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That research is a point of pride for Grétarsson, who spent 15 years in science and medical research before BioEffect, working for eight of those years to try to find an earlier way to diagnose Alzheimer’s disease and dementia, he said. “I had been exposed to the application of growth factors in my previous year,” Grétarsson said — and that scientific interest is what brought him over to BioEffect and its parent company ORF Genetics, where he is also ceo. “The world knows a whole lot about growth factors, especially how it is applied in skin, but all the other products on the market either come from human tissue [or] bacteria,” Grétarsson he said. “We have mastered the technology of growing growth factors in a barley system.”
The company and external scientists have both conducted testing on BioEffect, including using double-blind studies and biomarkers to measure outcomes — which Grétarsson said, have included an increase in skin thickness by 60 percent. The business spent $2.2 million last year on research and development, according to Grétarsson, who said the funds went into improving the quality of the barley and EGF, as well as on testing. To develop the EGF used in its products, BioEffect spent about $25 million, he said.
“The U.S. consumers are really well-equipped to critically view a product and see what’s behind it, if there is something behind it,” Grétarsson said. Though BioEffect will initially launch online, the company intends to make it into U.S. retail doors before the end of the year.
“We have a close relationship already with a partner in the U.S., who we expect to introduce and offer our products later this year,” Grétarsson said. “We’d rather have fewer doors but doors that have people who are well-trained and qualified.”
The product is expected to bring in about $1 million in sales from the U.S. market for the first year, according to the company, and then grow 40 percent for 2018 and 30 percent for 2019. BioEffect had about $24.5 million in sales for 2015, and is expecting gross revenue to increase by 30 percent for 2016.