Strong growth of 33.8% in the first quarter of 2026: How did Health and Happiness (H&H) Group navigate through the cycle?

If one phrase were to describe 2026 so far, the most fitting would be 'some are happy while others are filled with sorrow'.

Stricter regulations in the health industry have slowed growth, but the Group Health International, which owns brands like Swisse and Biostime, has shown a different trajectory.

According to the unaudited Q1 2026 operational data released by Group Health International yesterday:

Group Health International reported revenue of 4.26 billion yuan, an increase of 33.8% year-on-year. The adult nutrition and care products business (ANC) grew by 24.2%, with strong double-digit growth continuing in mainland China, the Australia-New Zealand local market, and other expanding markets. The pet nutrition and care products business (PNC) increased by 1.5%. Growth momentum for premium pet nutrition continued to strengthen, with Zesty Paws growing by 15.5% year-on-year.

More surprisingly, the baby nutrition and care products business (BNC) grew by 60.9% overall, driven by a 74.4% phase of strong growth in the infant formula business in mainland China.

At the same time, Group Health International's cash flow reserves increased from 1.7 billion yuan last year to 2.1 billion yuan.

We often use the ability to navigate cycles as a measure of a good company because it tests not just a company’s explosive power during favorable times, but how well it can adapt and continue to thrive amidst market changes.

So the question arises: What has Group Health International done right?

01 Break free from the vicious cycle of internal competition

Every enterprise that has successfully navigated historical cycles didn't achieve it by what they did in the present, but rather by what they accomplished in the previous era.

In the first quarter of this year, H&H Group's nutritional supplements continued the strong growth momentum from last year. Vitamins, herbal and mineral supplements, infant probiotics, children’s nutritional supplements, and pet nutrition products achieved robust double-digit year-on-year growth of 24.2%, 23.1%, and 16.3%, respectively. Nutritional supplements have become the main driver of the group's revenue growth, accounting for 59.9% of total group revenue.

The fundamental driving force behind this high-speed growth stems from H&H Group's strategic moves over the past decade.

The healthcare sector is indeed a key focus in recent years. According to the China Research Institute of Prudential's '2026-2030 Panorama Market Research and Development Forecast Report on China's Healthcare Industry,' the market size of China’s healthcare industry will continue to grow steadily, expected to exceed 29 trillion yuan by 2030, with emerging fields such as health management taking up an increasing share.

However, we must recognize that the nutrition and health market is also undergoing profound changes. First, there is a full-scale explosion of demand for family-wide nutrition. Whether it's children, young adults, or the elderly, everyone is pursuing scientifically effective health practices. The trend towards age-specific and detailed approaches is becoming increasingly prominent. Second, regardless of the age group, consumers are seeking more scientific and better-quality nutritional and health products.

In other words, the market now demands higher R&D capabilities, product quality, and supply chain management from companies.

So, how has H&H Group responded?

First, its flagship brand Swisse has deepened its presence in popular categories such as liver care and oral beauty products, solidifying its core product lines while expanding them comprehensively.

Second, the company continues to expand into new product categories.

Swisse has strategically upgraded to 'Swisse Mega Brand', transforming nutritional products into lifestyle fashion items. It aims upwards at high-end consumers, extending into the premium line Swisse PLUS, which focuses on anti-aging; and downwards, it targets professional age-based solutions, introducing Little Swisse for children with more refined formulations to meet the nutritional needs of growing kids. Horizontally, Swisse also launched Swisse Me, a light health brand offering functional gummies and effervescent tablets to satisfy young people's wellness demands.

Biostime extended its product coverage from 'infants' to 'children', unveiling an innovative product portfolio including Super Golden Bacteria Probiotics, Little Nose Soothing Probiotics, and Big Dunk Children's Nutrition Powder.

In the pet nutrition sector, Health and Happiness Group has also established Zesty Paws Happy Paws and Solid Gold Prime Health.

Finally, emphasis is placed on brand building and supply chain management.

Last year, Swisse deeply participated in the 'Q&M Dental Nutrition Week' and the 'National Nutrition Literacy Conference' officially hosted by the Chinese Nutrition Society, and showcased research achievements such as age-based nutrition solutions at professional summits like the 'National Nutrition Science Conference,' further solidifying its professional image within the industry.

Meanwhile, Swisse has built a full-link compliance system, maintaining high standards across the entire process, from raw material selection, production, quality testing, to logistics, warehousing, and final delivery, ensuring strict quality control throughout the product lifecycle from development to market launch.

With the advancement of the 'Swisse Mega Brand' strategy, Swisse achieved comprehensive nutritional coverage for all demographics and the entire life cycle.

After a decade of accumulation, Health and Happiness Group has constructed a family-wide nutrition ecosystem covering the entire life cycle: from basic supplementation to detailed nutrition, from health across all human age groups to pet health management. This enables the group to achieve complementary growth across business segments amidst the backdrop of intense competition in infant formula markets, rapid expansion in pet nutrition, and premium upgrades in adult nutrition markets.

02 Become a Clock Maker

In the classic book 'Built to Last' co-authored by Jim Collins and Jerry Porras, a pair of classic concepts were introduced: clock makers and time tellers. The former refers to those who build sustainable systems for continuous development, while the latter relies more on individual abilities to directly solve problems.

The two most crucial aspects of the Group's core strategy are as follows.

One is channel development.

In the domestic market, the Group actively embraces a multi-channel strategy. While maintaining an early presence in e-commerce channels, it has further expanded its offline new retail channel layout, such as strengthening Biostime's offline maternal and infant store network.

Thanks to channel expansion, Swisse achieved sales growth both online and offline in the first quarter. High-growth channels like Douyin accelerated their penetration, with sales increasing by 84.3% year-over-year. The offline new retail channel also saw significant growth, with sales rising by 54.7%. In mainland China, Biostime’s infant formula sales grew by 74.4%, while sales of infant probiotics and children's nutritional supplements increased by 20.4%.

Internationally, the Group has established a global sales network covering key markets and is accelerating its penetration into emerging markets through localized and multi-regional strategies to enhance growth resilience.

In the Australia-New Zealand local market, ANC has strengthened cooperation with key retailers, including pharmacies and supermarkets, driving Swisse's year-over-year growth of 16.5% in the region.

Meanwhile, the Group has expedited Zesty Paws' distribution across Amazon, Chewy e-commerce platforms, and numerous retailers such as Walmart, PetSmart, Petco, Tractor Supply, Target, Sam's Club, CVS, and Menards. This has led to a robust year-over-year growth of 16.3% for its PNC business in the North American market.

The second aspect is research and development (R&D).

Taking Biostime as an example, the infant formula industry has faced constant challenges in recent years, with growth appearing lackluster. In Q1 this year, the overall domestic infant formula market grew by only 0.2%, but Biostime delivered a remarkable 74.4% increase. A key reason behind this contrast is Biostime’s heavy investment in R&D, which has built trust with consumers and significantly shortened their decision-making process.

Leveraging the scientific research capabilities of the Group’s six global R&D centers and the Biostime Institute of Nutrition and Care (BINC), Biostime has established maternal cohorts and breast milk banks. It was the first to introduce the concept of HMObiotics. After long-term R&D efforts, Biostime has built a leading technological edge in the field of bioactive breast milk components, focusing on two core ingredients: 2'-Fucosyllactose (2'-FL) and Lactoferrin (LPN), establishing a systematic patent portfolio around these areas.

Of course, it’s not just Biostime; Health and Happiness Group (H&H Group) has consistently supported R&D investment. For instance, to verify the health benefits of lecithin, Swisse conducted a large-scale clinical study lasting 24 weeks.

Doing the right thing and choosing the right track is important, but equally critical is figuring out how to do things right. Whether it's the coordinated channel strategy of 'full online presence + offline new retail' or significant R&D investment, these are what give the brand the confidence to grow rapidly against market cycles.

03 Shredding Old Labels

In the Q1 earnings report, another standout figure was the group’s cash reserve, which remained over 2.1 billion yuan. At the end of last year, this number was still 1.7 billion yuan.

This is a fairly positive signal.

It is a company with solid performance and growth potential. It understands the market well, positioning itself early on to capitalize on trends in the health industry; it has strategic insight, growing brands through strong operations; and it also understands products, avoiding cutthroat competition by focusing on long-term R&D efforts.

So while many brands struggle to find their second growth curve, it can rely on its three core businesses to accelerate development.

Moreover, it’s a company where management has demonstrated the ability to optimize capital structure and maintain robust financials. Even with positive business momentum, H&H Group proactively reduced leverage levels and prioritized profitability and financial resilience. Between 2024 and 2025, H&H Group’s net leverage ratio fell from 3.99x in 2024 to 3.45x. In Q1 of this year, H&H Group continued to deliver steady profits and healthy operating cash flow conversion, repaying over 500 million yuan (equivalent) of US dollar term loans ahead of schedule.

Given the current explosive demand for health and pet care products, there are ample reasons to have greater confidence in H&H Group. As Akash Bedi, CEO of H&H Group, stated:

“We continue to advance toward our goal of becoming a global leader in premium nutrition and the health industry.”

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