Orgabio Sees Healthier Beverage Opportunities Despite Higher Formulation Costs
By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, Oct 23 (Bernama) -- Healthier beverage formulations can cost approximately five to 10 per cent more to manufacture, but Orgabio Holdings Bhd sees opportunities in the segment as brand owners explore products that cater to evolving consumer preferences.
Chief executive officer and executive director Ean Yong Hien Voon said additional manufacturing costs depend on ingredient selection, formulation complexity, nutritional requirements, and production volumes, particularly when alternative sweeteners are incorporated.
However, the instant beverage premix manufacturer does not necessarily view the premium as a barrier, as brand owners serve different consumer segments and pursue different product positioning.
“Rather than being solely driven by manufacturing costs, the decision to introduce healthier beverage formulations is also influenced by customers’ brand positioning, target demographics and willingness to explore new product offerings,” he told Bernama recently.
Gradual shift in consumer preferences
Ean Yong said functional and food supplement premixes accounted for approximately two per cent of the group’s total revenue in the financial year 2026 (FY2026), while conventional coffee and tea premixes continued to dominate consumer preferences.
Their familiarity, affordability and established consumption habits continue to support conventional premixes, which contribute the majority of Orgabio’s orders.
Nevertheless, the company is seeing growing interest in healthier alternatives, particularly among overseas customers where health and wellness trends are more established.
Its existing formulations include herbal-infused beverages, colostrum-based formulations and high-calcium formulations.
“We recognise that the transition towards healthier beverage consumption will be gradual, particularly in markets such as Malaysia, where conventional premixes remain popular.
“However, we view this as an opportunity to progressively diversify our product offerings as consumer awareness and preferences continue to evolve,” he said.
Rather than setting a specific revenue contribution target for FY2027, Orgabio is focusing on strengthening product development capabilities, deepening relationships with existing customers and supporting brand owners in introducing new formulations.
Balancing affordability and product differentiation
Ean Yong said not all customers seek to introduce healthier beverages at the same price point as conventional premixes.
Some prioritise affordability for mass-market consumption, while others are willing to incorporate specialised ingredients to cater to consumers seeking specific functional or nutritional benefits.
“For instance, some of our network marketing customers prefer incorporating natural sweeteners into their product formulations to differentiate their offerings from conventional beverages and competing products in the market.
“Some customers also approach Orgabio with a specific product concept or desired functional benefits, allowing our product development team to propose customised formulations aligned with their requirements and target price points,” he added.
He said the team evaluates different ingredients and formulation approaches to balance functionality, taste, quality and manufacturing costs.
The new factory also provides opportunities to enhance operational efficiency and achieve better economies of scale as production volumes increase, although potential savings depend on individual formulations, ingredients and order volumes.
Testing the market before scaling up
Ean Yong said brand owners are mindful of consumer purchasing power and market demand, particularly for healthier and functional beverages that may involve higher formulation costs.
“Some may therefore prefer to assess market acceptance before committing to larger production volumes.
“As such, some customers may adopt a more cautious approach by testing the market with smaller initial orders or refining their formulations based on consumer feedback before scaling up production,” he said.
As a business-to-business manufacturer, Orgabio’s production is driven primarily by customers’ purchase orders, with manufacturing schedules determined by demand and order volumes rather than fixed production timelines, he said.
He said protecting customers’ proprietary formulations and commercial information is vital to maintaining long-standing relationships, and that the company will not disclose customer identities or specific contractual details.
Looking beyond sugar content
Developing a healthier beverage also requires considering its overall formulation, as sugar contributes to sweetness, texture, and mouthfeel.
Ean Yong said alternative sweeteners may be incorporated into reduced-sugar beverages, but further ingredient adjustments may be necessary to maintain the intended flavour and drinking experience.
“Importantly, reducing sugar content does not automatically mean that a beverage is healthier in every aspect, as the overall nutritional profile depends on the combination and quantities of ingredients used.
“Common nutritional claims sought by local customers include low-sugar or zero-sugar content, low-fat formulations, products positioned as a source of fibre or protein, and high-calcium products,” he said.
He said product samples are submitted to accredited third-party laboratories for nutritional analysis, and the results are assessed against applicable requirements under Malaysia’s Food Act 1983 and Food Regulations 1985 before relevant nutritional declarations are included on labels.
Where a formulation does not meet its intended nutritional specifications or applicable regulatory requirements, Orgabio works with the customer to explore adjustments before proceeding.
However, while Orgabio provides formulation and manufacturing expertise, the respective brand owners generally determine the final products’ marketing and positioning and are responsible for ensuring their product claims comply with applicable regulatory requirements.
-- BERNAMA