Thanks in part to strong performance in mainland China, the company’s overall adult nutrition and care (ANC) revenue reached 1.5 billion yuan (US$211 million), an increase of 14.1% year-on-year, the company said on May 17. This was announced in the announced financial results.
Citing early data and Kantar Consumer Panel statistics, H&H Group says Switzerland ranks first in mainland China’s online vitamin, herbal and mineral supplements (VHMS) market and second in the overall VHMS market. said.
“The ANC segment in mainland China continues to perform well, accounting for 63.5% of the ANC Group’s total sales. We are diversifying our product portfolio with product lines such as Swiss Me and Little Swiss to reach a wider consumer base. I keep getting it.” Akash Bedi, Group CEO and CEO for North America, Europe, Middle East and India, said:
“Swisse Plus continues to stand out, contributing double digits to ANC China’s total revenue.”Bedi added.
In addition to China, Swisse’s market share in Australia and New Zealand grew from 11.3% to 12.2%, the company said, citing IQVIA data.
The company credits its marketing campaign, focus on premiumizing its portfolio and the introduction of innovations such as Swiss gummies as driving results.
H&H Group’s revenue, which includes adult, baby and pet nutrition and care products, fell 9.3% to RMB2.87 billion (US$404.3 million) in the first quarter of this year.
Of this, 70.3% of total revenue came from sales of nutritional supplements.
Infant formula problem puts pressure on China’s overall profits
Despite double-digit growth in China adult nutrition business revenue, overall H&H Group revenue in mainland China fell by 17.4% to RMB 1.85 billion (USD 259.9 million) due to drag from infant formula business It became.
For H&H Group, sales of infant formula in China plunged 34.4%.
The decline is attributed to three factors affecting the industry as a whole, including the transition to new national standards (GBs) or national standards, and a shrinking infant formula industry.
However, apart from industry-wide challenges, H&H Group also faced challenges such as stock-outs of its older goat infant formula range and delays in UK approval of a new goat milk product.
These two factors caused sales of goat infant formula to decline by 38 percent.
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“In the 12 months to 31 March 2024, in addition to the transition to the new GB standards, the overall IMF industry in mainland China contracted by 12.2%.
“In parallel to this, older ‘UK approved’ IMF (infant milk) stocks in the channel have been gradually depleted, which has led to a decline in sell-in compared to a modest sell-through decline of 12.7 per cent. .
“Specifically, the delayed approval of the new ‘GB’ goat IMF series led to a depletion of stocks of the old series of imported goat IMF, resulting in a 38.0 percent decrease in goat IMF sell-through. The IMF milk ratio was limited to 10.1 percent.”said Bedi.
On the bright side, the company’s market share for premium infant formula grew from 11.7% to 12.8%, putting it in the top three.
The company says this is despite an overall slump in China’s super-premium segment, with the market shrinking by 24.7%, based on Nielsen data.
Overall, the company’s infant formula revenue decreased by 32.9% to RMB625 million (US$88 million).
Amid the tough Chinese market, the company is prioritizing expansion of its infant formula business into other markets.
One example is France, where the company reportedly achieved the number one position in the organic infant milk category within the pharmacy channel and in the goat milk market.
Sales of pediatric probiotics and nutritional supplements in China also fell by 41%.
The company said this was due to a high base effect caused by a temporary surge in demand for probiotics in the same period last year.
Still, the company said pediatric nutritional supplements, excluding probiotics, grew 159.5 percent in China, driven by demand for products such as DHA and calcium.
Including all regions, the company’s pediatric probiotics and nutritional supplements sales decreased by 40.6% to RMB223.5 million (US$31.5 million).
