Under the repeated epidemic in the first quarter, how did the infant nutrition industry perform? Today, Jianhe group, the parent company of heshengyuan and Swisse Swisse, announced the first quarterly report card of this year.
According to the financial report, the group’s overall revenue in the first quarter was 2.683 billion yuan, with a reported increase of 11.5% (an increase of 7.0% based on the same benchmark), of which the mainland market accounted for 71.8% of the group’s total revenue and the revenue increased by 2.6% year-on-year.
Among them, adult nutrition and care products (ANC) and pet nutrition and care products (PNC) have achieved double-digit strong growth. However, under the multiple effects of multiple outbreaks, birth rate and fierce market competition, the group’s infant nutrition and care products business (BNC) is still facing challenges.
The company also looked forward to the challenges that may be brought by the recurrence of the epidemic and a series of Countermeasures in the future. Let’s take a look at the details.
Family nutrition combination card
In the first quarter of this year, the group’s BNC business achieved an overall revenue of 1.53 billion yuan, of which the infant formula in mainland China decreased year-on-year.
“The infant nutrition and care products segment continues to face structural pressure, especially the increased competition caused by the low birth rate in mainland China and the early phased impact of the Chinese Lunar New Year holiday in 2022.” Jianhe also pointed out that in order to meet the long-term challenges, the company decided to continue to stably implement the channel expansion strategy and expand the coverage of low-level cities, so as to maintain a stable market share and the profitability of infant formula business, and improve the output of single stores.
According to Nielsen data, for the 12 months ended March 31, 2022, heshengyuan accounted for 5.8% of the overall infant formula market share, maintaining a stable market position; The market share of sheep milk powder in infant formula was 4.2%, ranking third, slightly higher than the market share of 3.8% in the 12 months ended March 31, 2021.
Xiaoshidai noted that sheep milk powder, widely regarded as a “potential stock” by the baby matching industry, has also become a breakthrough for Jianhe to meet the challenges of milk powder business. In the first quarter of this year, heshengyuan, together with the China Nutrition Society, launched the first press conference on the latest scientific research results of sheep’s milk bridge protein LPN and released the breakthrough research results in the first stage, hoping to strengthen the brand awareness of the industry and consumers.
In addition to stabilizing the milk powder market, Jianhe will place more emphasis on the two businesses of ANC and PNC, which have shown strong growth since this year, in order to play the “whole family nutrition combination card”.
According to the financial report, in the first quarter, Jianhe ANC business achieved a year-on-year increase of 34.2% in global revenue, and Swisse’s sales in China increased by 33.3% year-on-year, accounting for 53.0% of the group’s ANC sales, mainly due to “the strong demand of consumers for immune enhancing products and the pre hoarding of inventory by distributors due to potential supply chain challenges”.
In addition, the global revenue of Jianhe PNC business in the first quarter increased by 147.8% year-on-year, of which the sales in the Chinese market was 83.1 million yuan. In March this year, solid gold suligo launched brand upgrading in China, launched five new star products, expanded its product portfolio, and entered about 5000 pet stores and pet hospitals.
Strive to ensure annual profit growth
In the first quarter of this year, a new round of repeated outbreaks occurred in many cities in the mainland, which brought great challenges to enterprises.
In this regard, Jianhe said that in the face of the new situation of domestic epidemic prevention and control, the group has effectively managed the supply of raw materials, the guarantee of production plants and domestic and foreign logistics, and the customs clearance of imported products at the port has remained smooth. For example, Jianhe immediately transferred some warehouses through cooperation with major e-commerce platforms to ensure smooth logistics, focusing on breaking through the “last kilometer” and striving to realize the supply and service of insurance.
It also pointed out that the industry is expected to face inflation and challenges to the supply chain in the next few quarters.
However, Jianhe remains optimistic about the overall trend this year and is expected to continue to maintain the overall track rise throughout the year.
“We will continue to respond to the situation through a variety of methods, including optimizing the product portfolio, raising the price of selected items according to market benchmarks, improving expenditure efficiency and alternative procurement, so that we will continue to achieve full year profit growth.” The group reported.
From the perspective of the three core business segments, BNC will improve the output and market penetration of single stores and continue to stabilize its market position through effective measures such as distribution, digital empowerment, market development and consumer education. ANC will further launch “blue hat” new products and localized innovative products for the Chinese market to meet the needs of consumers. In terms of PNC, it will improve and expand the channel layout by accelerating online and offline distribution. With the help of industry advantages and e-commerce status, zesty paws will continue to cultivate the U.S. market and enter China.
Laetitia Garnier, CEO of Jianhe group, said that the company is still full of confidence in the long-term prospect of product and geographical diversification strategy. The Chinese market will still be the largest contributor to the group, and it is expected that the Australian and New Zealand market will continue to recover and support the group’s global revenue performance.