YPB taps into dairy industry with Nature One contract

By Trevor Hoey. Published at Nov 20, 2019, in Technology

Product authentication and consumer engagement solutions provider YPB Group Limited (ASX:YPB) has negotiated a 2+2 year sales contract for the integration of its smartphone based, consumer engagement and serialised authentication solution, Connect, into Nature One Dairy milk powder tins.

Nature One Dairy is the first dairy sector client for YPB’s Connect platform and this sales contract, which is a Master Services Agreement (MSA), is aligned with YPB’s strategy of focusing on high need, mass market verticals such as dairy, wine, pharmaceuticals, health and beauty, and legal cannabis.

While the terms of the agreement are commercially confidential in terms of the quantum of revenues, management said that the supply of QR codes would be on a fee per unit volume basis.

Further, SaaS fees for the provision and management of Connect will be applicable.

YPB will also generate income from developing and providing website and consumer marketing content.

SaaS fees for the provision and management of Connect will be applicable.

Contract also covers white label products

The first tins incorporating Connect will be manufactured in January 2020 and maiden revenues will be realised shortly thereafter.

Nature One Dairy is a Victorian, wholly Australian-owned producer of nutritionally-enhanced milk powders for its own NATURE ONE DAIRY® label and white-label brands.

It is one of Australia’s milk formula manufacturers that is accredited by the Certification and Accreditation Administration of the People’s Republic of China (CNCA) for export to China.

The MSA covers both the NATURE ONE DAIRY® brand and Nature One Dairy’s white-label customers.

Nature One Dairy will promote YPB’s solutions to its third party customers to enhance and differentiate its own product offering.

Nature One Dairy CEO, Nick Dimopoulos, said: “We are excited by YPB’s solutions that for the first time allows us to better understand and directly engage with our consumers to boost our serialisation and marketing effectiveness. We chose YPB due to their technology leadership, and the functionality and ease of implementation of its solutions.”

Under the terms of the agreement, YPB will provide Nature One Dairy with its SaaS Connect consumer engagement solution.

Consumers will scan product QR codes which will see Connect capture valuable individual data (with consent).

This information allows brands whose end consumers were previously remote and invisible to build clear consumer profiles and develop ongoing relationships via a direct-to-smartphone digital channel.

The scan will also open an authentication window in which entry of a serial number checked against the Connect database confirms product authenticity.

YPB’s clients are increasingly demonstrating the power of the key YPB axiom that ‘authenticity triggers engagement’.

YPB’s clients are increasingly demonstrating the power of the key YPB axiom that ‘authenticity triggers engagement’.

Gaining exposure to export markets

Nature One Dairy’s products are specifically formulated to the varying nutritional needs right through from infants to the elderly.

Its own branded products are sold domestically and internationally with its export emphasis on China, South-East Asia and the Middle East.

Nature One Dairy has a broad range of domestic, Chinese and ASEAN customers for whom it produces white label products marketed under the customer’s own brands.

Two of its more prominent customers are Chinese pharmacy giant Sinopharm and Chinese food and beverage multinational Bright Foods.

YPB will also be working with Matthews, another product identification firm, to integrate Connect into Nature One Dairy’s production processes.

Matthews is the leading supplier of intelligent product identification, product inspection and software traceability solutions to Australian manufacturers.

Matthews Australasia Regional Sales Manager, Matt Nichol, said: “YPB has been able to demonstrate a very good understanding of our customers’ manufacturing requirements as well as the requirements of the consumer in China. YPB working directly with Nature One Dairy and Matthews Intelligent Identification has been an enjoyable experience providing guidance and direction from their years of experience. Matthews has a large customer base who manufacture and export products to China and around the world. We look forward to introducing other Matthews clients to the YPB technology.”

The MSA anticipates substantial volume growth over the contract life from the Nature One DairyTM brand’s own volume growth and adoption by its white-label customers over time.

Given that the initial term of the MSA is two years with an automatic renewal for a further two years, YPB can reap the benefits of Nature One Dairy’s growth in product volumes.

Authenticity triggers engagement

Underlining the fact that authenticity triggers engagement, YPB chief executive John Houston said, “Nature One Dairy is in the vanguard of brands increasingly recognising the power of authentication as a trigger to engagement and the value of a direct channel to a known end consumer.

‘’I’m confident our solutions will enable Nature One Dairy to significantly increase its own brand value and that of its white-label customers.

“It is gratifying to see our sharpened sales focus bearing first fruit in the dairy sector with a company of Nature One Dairy’s calibre.

‘’It builds on our earlier success in the wine sector with the renowned Seppeltsfield brand.”

YPB's revenue model.
YPB's revenue model.

Nature One Dairy chief executive Nick Dimopoulos acknowledged the effectiveness of YPB’s technology in the fields of product authentication and consumer engagement in saying, “We are excited by YPB’s solutions that for the first time allows us to better understand and directly engage with our consumers and boost our marketing effectiveness.

‘’We chose YPB due to their technology leadership, and the functionality and ease of implementation of its solutions.”

Interestingly, the collaboration with Matthews could also be vital for the future as management said that YPB’s solutions are of relevance to many of its clients and that the group expects to expand the commercial relationship with YPB over the coming months.

More specifically, Matthews said, ‘’YPB’s technology is certainly much more widely applicable to a much broader range of products and it represents a new vanguard in terms of authentication and consumer engagement.”

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