Swisse and Biostime focus: H&H reveals global expansion drive for major brands as revenue grows 2.5%
For Swisse, the company plans to introduce the brand to new markets via its VMS and beauty-from-within offerings and for Biostime, the focus will be on introducing its probiotics range.
In its FY2020 annual results, H&H said revenue was up 2.5 per cent to RMB$11.2bn (US$1.7bn) but gross profit dipped 0.6 per cent to RMB$7.2bn (US$1.1bn).
Mainland China is its largest revenue source, accounting for 82.8 per cent of its total revenue last year. Revenue from China also grew 9.8 per cent yoy to hit RMB$9.3bn (US$1.4bn).
Its second largest market, Australia and New Zealand, saw revenue contract 32.5 per cent to RMB$1.2bn (US$189m), mainly due to a slowdown in daigou activities as a result of COVID-19.
The remaining markets contributed a revenue of RMB$680.2m (US$104m), which was a 5.9 per cent yoy growth.
Category wise, most of the revenue came from the baby nutrition and care portfolio at RMB$7.3bn (US$1.1bn), which grew by 5.3 per cent.
The adult nutrition and care portfolio on the other hand, shrunk 3.1 per cent to RMB$3.9bn (US$592m), while pet care recorded a revenue of RMB$26.2m (US$4m).
Speaking to NutraIngredients-Asia, H&H Group Chief Strategy & Operations Officer Akash Bedi, said a focus this year would be the globalisation of Swisse and Biostime brands.
“We [Swisse] are Australia's number one beauty nutrition brand and I think that's what we will use as an entry point [to new markets], but over the course of next 12 to 18 months, we will extend our portfolio into other categories.”
Outside of Australia, Swisse’s beauty-from-within and VMS products are already available in various markets such as China, India, Singapore, the US, Netherlands, and Italy.
According to the 2020 Annual Advantage Survey – a retailer feedback survey in Australia – H&H was recognised as the no. 1 supplier in the Health, Beauty, and Baby category.
By Q2 this year, the company plans to launch Swisse’s VMS products in Thailand, which will complement the skincare range which was introduced last year.
Taiwan and Indonesia are the other markets identified for expansion this year.
“Within SEA, Thailand and Indonesia are probably the biggest markets for VMS consumption and overall future growth potential.
“[Also], a lot of Chinese consumers go to Thailand as a travel destination. We saw that they were buying from the duty-free stores [and so] we need to activate the local sales too,” he said.
Elsewhere in mainland China, the Swisse brand has been growing steadily with revenue up 25.4 per cent. Much of the sales are coming from cross-border e-commerce (CBEC) activities.
“Within our Adult Nutrition and Care business segment, Swisse delivered high double-digit revenue growth and profitability improvement throughout the year. Despite encountering lower offline traffic due to COVID-19, Swisse continued to see fast growth across our CBEC and normal trade e-commerce channels, with the latter reporting particularly high growth on the back of Swisse’s continued No.1 position on China’s major CBEC platforms and an enlarged normal trade product portfolio,” H&H chairman Luo Fei said.
To build up the momentum, the company is putting more Swisse products for “blue-hat” registration, so that they could be sold in China’s normal trade e-commerce and brick-and-mortar stores.
As for the ANZ markets, the company last year sought to focus more on growth from the domestic market instead of daigou /export activities.
As such, it launched Swisse Nutra+, its first practitioner-only range exclusive for sale in pharmacies and via health professionals. The range has expanded to over 1,000 pharmacies.
Biostime
Outside of Asia-Pacific, the company will leverage on the popularity of Biostime’s paediatric pre/probiotics in building the company’s global footprint.
Last year, Biostime’s probiotic supplements delivered double-digit growth, due to growing awareness of the immune benefits of probiotics.
To expand Biostime’s global presence, the company introduced Biostime probiotic on Amazon US last year.
Biostime probiotics are also already available in Singapore, Hong Kong, Australia, and France.
Aside from probiotics, the Biostime brand also consists of organic and goat infant/toddler formula, which are mainly sold in China.
NPD plans
Aside from beauty-from-within, H&H has identified plant-based/vegan, immune health, and mental wellness, as its priorities for new product development.
In terms of plant-based innovation, about half of Swisse’s products are already suitable for vegetarians.
To further meet the demand for vegan products, the company launched a vegan version of one of its bestsellers – Swisse Calcium + vitamin D – in India last year.
“It is our first stepping stone going into the vegan portfolio…Consumers are now asking [if a product] is sustainable?
“We are looking at our existing portfolio and the new innovation as to how we can complement and capture the consumer trends,” said Bedi.
Product format wise, gummies will be a focus for new product development.
The company is already planning to launch VMS and probiotic gummies for adults under the Swisse brand.
This will build on the success of the kids gummies range which the company launched last year.
Said to be 99.9 per cent sugar free, the kids gummies range are available in three SKUs, catering to bone health, immune health, and general health support.
On the other hand, it is planning to launch probiotics gummies via the Biostimes brand in the US later this year.
“Gummies is not a simple product, it is a very complex product to manufacture, so depending on how soon we are able to formulate and stabilise a product, we will launch it.
“I think the priority in the US will be kids gummies under the Biostime brand name.
“In Australia, we will be launching both for adults and kids under the Swisse brand name.”
