Baby Nutrition & Care business saw strong recovery in the third quarter and the Group saw positive growth in mainland China, Australia & New Zealand and North America markets
Wednesday, 16 November 2022. Leading global health and wellness company H&H Group has announced its unaudited operational statistics for the nine months ending 30 September 2022. The Group reported a positive overall result with its total revenue increasing by 13.4% year-on-year on a reported basis (7.8% on a like-for-like (LFL) basis[1]) to RMB9,184.4 million. This was thanks to a strong third quarter boosted by the healthy growth of its Adult Nutrition & Care (ANC) segment in mainland China and Australia & New Zealand, and the strong growth momentum of its Pet Nutrition & Care (PNC) segment. In addition, H&H is pleased to announce its Baby Nutrition & Care (BNC) segment has returned to growth in the third quarter of 2022.
Akash Bedi, Chief Strategy & Operations Officer at H&H Group and Interim CEO, says it is very promising to see the Group’s BNC segment return to growth and is particularly proud of impressive product innovations across all markets, as well as recent achievements in the Group’s sustainability journey.
“I’m pleased to share that H&H has reported 13.4% total revenue growth on a reported basis for the nine months ending 30 September 2022, boosted by a strong third quarter for the Group. Following a difficult period of COVID-related supply chain challenges and market pressures across the BNC category, our BNC business has returned to positive growth in the third quarter. In keeping with this positive story, our ANC segment in mainland China and Australia & New Zealand continued its growth momentum thanks to innovative new product developments such as Swisse Plus and successful integrated marketing strategies focusing on increasing Swisse brand presence. The Group was also bolstered by positive results from North America, now our third largest market and a major source of revenue.”
Mr Bedi adds, “I’m also proud of the immense progress we’ve made in our sustainability commitments over the past three months. We’ve successfully maintained our A Rating for Hong Kong Quality Assurance Agency (HKQAA), submitted our B Corp BIA in France moving us another step closer to achieving Group-wide B Corp certification, and joined the Ellen MacArthur Foundation Community – one of the most recognised charities working to transition to a circular economy. Earlier this year, we also established the Environmental, Social and Governance Committee of the Board of Directors to lead on the Group’s sustainability strategy. In addition, H&H has progressed its Diversity, Equity & Inclusion (DE&I) strategy, a key area for the business, by developing a Global DE&I statement. In mainland China, we won the Green Sustainability Development Contribution award at the 2002 International Green Zero-carbon Festival in Beijing in recognition of our ESG commitments and developments.
“These results position the Group on a strong trajectory as we head into the final quarter of 2022, and we expect to deliver top-line growth for the full year compared to 2021.”
In mainland China, the BNC business has seen a positive sales turnaround and has returned to growth in the third quarter, thanks to a turnaround in probiotic sales and a narrowing sales decline in the infant milk formula (IMF) business. In the twelve months ended 30 September 2022, market share of the overall IMF market and goat milk IMF market were 5.6%[2] and 4.2%[3], respectively, with high single-digit growth in Biostime’s super premium series. This was thanks to efforts to strengthen brand awareness and rapidly expand reach in lower-tier cities through the Group’s channel expansion strategy, as well as from branding initiatives and focused investments in consumer education. The Swisse brand saw double-digit growth (22.8% on a LFL basis) thanks to a successful omni-channel sales and marketing strategy and focus on enhancing its brand presence, as well as robust consumer demand for beauty products, multivitamins and immune support supplements. Swisse also maintained its number one position online in the vitamin, herbal and mineral supplements (VHMS) market with a market share of 7.2%[4]. Other key highlights include the launch of Swisse Plus in September 2022, bringing effective health and wellness solutions to a higher-end Chinese consumer. This year’s 618 shopping festival, the second largest in China (after Singles Day), was also a huge success and contributed to this double-digit growth. The Pet Nutrition & Care (PNC) segment focused on expanding its online and offline presence and recorded robust growth of 52.3% on a LFL basis in the nine months under review, led by Solid Gold, leveraging increased pet adoption rates and growing consumer spend on premium pet nutrition. However, in the third quarter, supply chain challenges in North America impacted the availability of some Solid Gold products, a situation that is expected to stabilise in early 2023.
In Australia & New Zealand, the Group has maintained strong sales momentum in both domestic and corporate daigou channels, with an uplift of 20.6% on a LFL basis (for the nine-month period). In the twelve months ended 30 September 2022, Swisse maintained its overall share of the Australian VHMS market at 12.2%[5] and achieved the number one new product in the VHMS market with the new Swisse Beauty Collagen + Hyaluronic Acid (based on LTM). The BNC segment saw the launch of Biostime Liquid ‘Ready to Feed’ in five maternity hospitals, the first brand in over 30 years to enter this channel in Australia. In more positive news, the Biostime Human Milk Oligosaccharides (HMOs) product range won ‘Infant and Child Nutrition Initiative of the Year’ at the NutraIngredients-Asia Awards 2022, in recognition for significantly improving infant and child nutrition.
For North America, now H&H Group’s third largest market and a major source of revenue, it was another positive result with a 20.2% increase in total revenue year-on-year (on a LFL basis) for the nine months ended 30 September 2022, despite overall growth in the third quarter as impacted by the transition of Solid Gold’s business on Amazon from a wholesale model to a marketplace model. This was offset by a particularly strong third quarter for Zesty Paws, which saw a record month on Amazon in July with over 35,000 new customers coming to the brand over the two-day Prime event in July 2022. In addition, Zesty Paws was selected as part of Newsweek’s list of ‘America’s Best Petcare Brands 2022’ in the Digestive Support for Dogs category. Offline market presence grew to more than 7,700 stores and 3,800 stores for Zesty Paws and Solid Gold, respectively, including major chains such as Walmart, Target, Petco and PetSmart, which is creating stronger channel synergies and brand awareness that will propel future growth. Innovation was front of mind for the third quarter too with the launch of new innovative products including functional cat bites with CBD and functional dental products for dogs. It was a similar story for Solid Gold, which launched a new calming supplement chews powered by proprietary Bioboost™ and won a Pet Innovation Award for Dog Food Product of the Year 2022 for its Nutrientboost™ product.
In other territories, H&H Group saw great success in Asia, with Zesty Paws being the first pet supplement brand to operate a flagship store on Hong Kong SAR’s leading e-commerce platform, HKTVmall. In the third quarter, Swisse extended its number one beauty supplement brand status in the Singapore market[6
Source: RealWire
