Nestled in the northwest corner of the South Island with over 90 employees, HealthPost is already a sizeable online natural health retailer, with over $30 million in annual sales and revenue growth of 6% over the last year.
It serves hundreds of thousands of domestic and international customers annually, with over 15,000 products available, ranging from traditional vitamins and supplements to food, drink and body care products.
Butler first got involved with the business in the early 2000s as it launched an online retail platform.
“You had the very beginnings of e-commerce then. Amazon was established, and counterintuitively, you also had the dotcom bubble and bust. There were obviously barriers to adoption in the early stages, but the model of relatively small, high-value products and the ability to ship them all around the country, which we were already doing, lent itself very well to an online model.”
In 2009, after years of building up HealthPost’s customer base and prior to the launch of its new e-commerce site, Linley made the decision to step away from the business due to health reasons.
That year Abel assumed the position of chief executive, while Lucy took on the role of sustainability lead.
He explained that since the business’s early beginnings, there has been huge growth in consumer awareness of the impacts of their choices.
“Even natural health as a category was relatively novel. I think the concept of conscious consumption was really quite nascent and hadn’t hit the mainstream,” Butler said.
“What I think for us in the last few years, there’s been a huge increase in consumer awareness of the impacts of the choices they make, and also for them personally, I think there’s a continuing demand for higher quality and greater transparency from retailers.”
HealthPost’s sustainability lead, Lucy Butler, is guiding the business alongside her brother Abel.
Transtasman expansion
HealthPost is operating in a competitive industry, sharing customers and market share with boutique players, independent pharmacies and retail giants such as Chemist Warehouse.
Butler said it was good that customers could be served in all their diverse needs, but said HealthPost has a “real strength” in its transparency, efficacy and environmental standards.
“We’re making it easier for customers to make mindful and considered choices that they can be confident in without having to do an enormous amount of research themselves. If we stock it, they can be confident that it already meets a number of standards which we’re transparent about.”
In May 2023, the business established a physical presence in Australia with its purchase of two competitors there whose parent company went into receivership, Flora & Fauna (a vegan and eco-lifestyle pioneer) and Nourished Life (a clean beauty and natural health platform).
Butler said they already had a love for the two brands and could see them as the closest to what HealthPost was doing in the Australian market.
But in his opinion, despite the two businesses beginning as founder-led brands with clear visions, both were victims of corporate mismanagement.
“The brands had suffered quite a bit of reputational damage, so the first thing that we had to do is restore trust in them. That’s been a matter of focusing on doing all of the basics very well, and we’ve been really pleased to see the way the market has responded to that.”
Since HealthPost took ownership of the brands for an undisclosed amount, the transtasman expansion has delivered month-on-month sales growth averaging 15%, and is on track to be profitable within the financial year.
HealthPost’s purpose-built premises in the South Island’s Golden Bay, where it is the largest employer in the area.
Product growth
Butler said it has been intensely competitive both here and in Australia, but credits the business’ recent growth to the team’s ability and understanding of unit economics.
“The supply chain and logistics are really complex, and it does require an enormous amount of time and effort to keep track of such a large and diverse stockholding.
“We have really good systems that we’ve built up over many years of experience in terms of how we forecast, how we manage and offboard slow-moving stock, how we interface with suppliers, how we manage products across the website, all of those systems have been really well established.”
When it comes to expanding the range of the business, Butler said New Zealand is normally two to three years behind global trends. However, HealthPost is benefiting from its Australian footprint, as the market across the Ditch tends to be an early adopter of innovation across the natural health category.
Now with the Australian acquisitions back on track, Butler’s attention is returning to where he started, the business’ online retail platform.
“It’s a really interesting time in terms of e-commerce technology at the moment, particularly with the intersection of e-commerce and AI. Things are becoming possible in terms of streamlining customer experiences that were only a dream previously.”
Butler said some capital would be invested into the business’s technology to “enable world-class customer experiences”, as well as continued expansion of its range and supply chain capabilities.
The business will also continue its focus on sustainability. It currently holds B-Corp certification and is zero-carbon certified, with a large multi-year commitment to environmental restoration in its backyard of Golden Bay.
Perhaps the biggest change for Butler and the business was the death of his mum and HealthPost founder Linley late last year.
Reflecting on her life and his relationship with her, Butler said she was hugely influential in giving him lessons in business.
“I would say it’s a bar and a standard for us to aspire to. It’s relatively hard to feel like we consistently live up to it, but I think it gives us a North Star to try to honour that incredible legacy that she did see for us.”
Butler said the biggest lesson Linley taught him was in her approach to “radical generosity”.
“A good example is she would look at the products a customer was buying on an individual level, ascertain from that or make her best reasonable estimate of the type of person they were and why they were accessing products from us, and then add additional products of her choosing into the parcel.
“We talk as a team about trying to replicate that type of ethos and approach through digital channels. The business was a lot smaller then, and it was easier to do, but I think that radical generosity in a personalised way is a great approach to winning customer loyalty and feeling good about what we do.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.