Nutritional Growth Solutions’ global expansion is hitting new heights as the Aussie-listed paediatric nutritional product innovator enjoyed a near 15% quarterly revenue bump on the back of increasing sales of its Healthy Heights product range across the US and China.

Delivering a market update on Thursday morning NGS says Q2 FY22 has been another quarter of growth for the maker and distributor of scientifically formulated and clinically studied children’s health products.

In line with a positive 4C quarterly cash flow report, Nutritional Growth Solutions (ASX: NGS) is clearly benefiting from the now fully-operational Kiwi-based manufacturing facility driving huge sales traction into key markets.

Milestone initiatives

CEO Liron Fendell told Stockhead new milestone initiatives have delivered growth in the US and Southeast Asia locking in a strong June quarter for revenue and cash receipts.

The sell-through of its New Zealand-made Healthy Heights range in China is absolutely driving sales growth across the region – of well over 950%.

And over in North America, the rollout of NGS’ retail expansion strategy has continued apace with a new agreement locked in with Kroger.com, Ralphs.com, and Smiths.com.

And while unaudited quarterly overall revenue was US$755k, lower on the previous corresponding period (pcp), this was only due to the timing of a landmark initial order from Italy in 2021.

Growing while growing

“Our expansions in the US and Southeast Asia are gathering momentum, playing a key role in growing Healthy Heights into a global household name in child nutrition,” Fendell said.

“Ranging the full Healthy Heights portfolio on the ecommerce site of Kroger, the third largest general retailer in the States – behind only Walmart and Amazon – is a testament to our team’s hard work over the quarter and complements our recent agreements with Walmart.com and Rangeme.com.

“With our new manufacturing facility in New Zealand now fully operational and distributing into Southeast Asia, sales increased 958% in China compared to the previous quarter,” she added.

Perhaps most encouragingly for Fendell is that Chinese demand for paediatric products – that are safe and healthy and provide the best possible nutritional value for kids – is huge.

Chinese parents are absolute sticklers for looking to provide their kids with the best possible and most trustworthy nutritional products throughout their most formative years.

“Our agreements with Chemist Warehouse China, JD.com, Lazada and Shopee are well placed to scale given we have sufficient NZ manufactured product to ramp up stock levels as the demand increases in the region. “

Key appointments

NGS has also been on a talent spree, snapping up a number of best-in-industry specialists including Peter Osborne, previously managing director Asia for Blackmores (ASX:BKL) and ex-Australian senior trade commissioner in Beijing, Shanghai, Hong Kong and Taiwan.

There’s little doubt that Osborne brings massive Asia Pacific market knowledge in terms of growing Healthy Heights into the lucrative China and Australasian markets.

Three months in bullets:

  • Sales commenced on Kroger.com, Ralphs.com, and Smiths.com as part of US retail expansion
  • Full Healthy Heights range commenced sales on the ecommerce channel of largest US supermarket chain by revenue, Kroger (NYSE: KR) which reported an increase in sales of 113% across 2020 and 2021
  • All Healthy Heights products are also available on the ecommerce channels of Kroger subsidiaries, Ralphs and Smith’s Drug and Food
  • Ranging on Kroger.com is a milestone in NGS’ grocery and retail expansion strategy in the US and compliments recent agreements with Walmart.com, Rangeme.com and United Natural Foods (NYSE: UNFI)
  • Post reporting period, NGS signed a distribution agreement with the largest natural products wholesale distributor in the US, United Natural Foods (NYSE: UNFI) which will expand Healthy Heights retail and online presence across the United States
  • Entire 22 product range, including newly launched KidzProtein and KidzProtein Vegan lines – available wholesale from this month via UNFI’s marketplace platform or physical distribution centres

 Outlook

The ongoing agreements with some of the US’ best-known companies, has the Healthy Heights range in front of millions of US parents everyday, the brand is up front in key locations nationwide when parents are making purchasing decisions for nutritional paediatric products.

“We will continue to roll out to more retailers to ensure more parents have access to our nutritional paediatric products and in turn, set NGS up for a strong future as sales momentum increases,” Fendell says.

“We will place increased focus on capturing the opportunities in Southeast Asia now that we have a fully operational manufacturing facility in New Zealand and distribution partners in the region.”

She says that there’s increasing demand for Healthy Heights in the SEA market, with sales up pretty dramatically as health concerns continue to impact parents who look more than ever for “safe and healthy products to ensure their children are receiving the best nutrition to support their growth development”.

“The continued rollout of these initiatives along with entering new markets and expanding our product range, will play a large role in growing Healthy Heights into a global household name in child nutrition.”

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.