Nutritional Growth Solutions has enacted a three-point strategy for growth, and it’s already proving a winner.

Paediatric nutritional products provider Nutritional Growth Solutions (ASX:NGS) is focusing on increasing product lines, new geographies including China and expansion into US brick-and-mortar stores to scale growth.

NGS CEO and Managing Director, Liron Fendell told Stockhead a year ago the company had only three products but has now increased this to 22 with more in the pipeline.

“This is especially important as we enter retail stores and more geographies. To offer a full suite of products is very important in gaining traction and catering for the needs of more families,” she said.

NGS’ patented nutritional products have been developed over a 20–year period by physicians at the world-renowned Schneider Children’s Medical Centre and are clinically proven to support growth development in children.

The company has its products broken up into three groups including:

  • Healthy Heights Grow Daily 3+
  • Healthy Heights Grow Daily 10+ specially formulated for the different nutritional needs of boys and girls
  • Healthy Heights KidzProtein, both dairy and vegan formulas for all children

“Our new product for kids 10 years and up supports their development as they enter the growth spurt of puberty and ensures they get the best height gain during that of that period of time,” Fendell said.

“This is their last chance to catch up on height and we want to give them the right building blocks to optimise their growth during this time.”

She said the KidzProtein range was based on a product from KidzShake, a company acquired by NGS.

“We re-branded and re-designed this product and it is now sold under the Healthy Heights brand,” she said.

Trial into new sports formula

The company is now working on a new sports formula designed to help young athletes and active children optimise their performance.

“It’s protein, amino acids, iron, calcium and all the things we know growing children who do a lot of sports are lacking, that can jeopardise their sports performance,” Fendell said.

“When supplemented with these nutrients, we expect to see a positive impact on their sports performance, which is something we are currently testing in our clinical studies.”

Supplement for kids with ADHD

NGS is also undertaking a clinical study for children who are being treated for ADHD with stimulant medications such as methylphenidate (sold under brand names Ritalin and Concerta among others).

“We know their growth is often jeopardised due to a lack of appetite amongst other reasons, so we are now testing if supplementing them with our main product, Grow Daily 3+ will help increase their growth rate,” Fendell said.

Increasing geographical presence – China demand

While NGS’ focus has predominantly been on the US market, it is now working to broaden its geographical presence as part of the second stage of its growth strategy.

“Our core market has been the US but we are now also selling in Italy and China which is definitely a big opportunity,” Fendell said.

“We are seeing increasing demand in China with parents showing real interest in our clinically proven products.”

She said NGS is working to build a sustainable business plan for the China market with its newly appointed team, including former Blackmores Managing Director, Peter Osborne as Strategic Advisor.

“We want to make sure China is done right and having Peter, who brings deep experience selling consumer healthcare products into China, will play a large role in helping us grow Healthy Heights into a global household name in child nutrition” she said.

Extra production facility established in New Zealand

NGS opened a production facility in New Zealand in May for easier access to China and the Asia Pacific region.

“Most of our production is done in the US but to ensure we have cost-savings, good logistics and positioning in the market, we moved production for this region to New Zealand,” Fendell said.

While all the dairy for the US and New Zealand produced formulas comes from New Zealand, there are some key differences to account for the Chinese market.

“We have added more nutrients that we know children in China are lacking, such as iron, vitamin D, vitamin A,” Fendell said.

Greater demand for toddler formula in US

NGS has also seen an increase in demand for its toddler formula in the US since an infant formula shortage hit the country in February.

The crisis started when major producer Abbott Laboratories closed a manufacturing plant after the US FDA began looking into bacterial infections in infants who had consumed the formula.

US authorities fast-tracked processes to permit international manufacturers to temporarily supply product in the tightly held market.

NGS’ whey-based protein-based formulas are produced locally in Utah for the US market.

“The US facility is continuing to make all the products for the US, even with the increased demand,” Fendell said.

Expansion into brick and mortar in US

Fendell said the third part of NGS’ growth strategy has been accelerated due the US formula crisis. She said NGS is now rapidly expanding its presence in brick-and-mortar stores throughout the country.

“This quarter and the next quarter we are concentrating on expanding into brick-and-mortar stores in the US,” she said.

“It’s really been fast-tracked by the infant formula shortage which has had spill over into the toddler milk category.

“It’s a big opportunity for us to get into brick-and-mortar stores in the US more rapidly than we had planned.”

Fendell said the retail expansion is forecast to have the biggest impact on NGS’ growth in the short-term.

NGS already has its Healthy Heights product range stocked on US supermarket giant Kroger’s e-commerce channel along with Walmart’s ecommerce platform.

“Originally our plan was to be in 250 stores in the US by the end of this year and now are projecting at least 400 stores,” she said.

This article was developed in collaboration with Nutritional Growth Solutions, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.