Sports Nutrition “Battle of the Ages”
Maybe it’s the mere 300ish miles between their respective company headquarters. Or maybe that both own a leading global sports nutrition brand that does north of $500 million annually in mostly the protein powder category. Or that each company has a vertically-integrated business model. Regardless, it’s natural to see that Glanbia versus The Hut Group (THG) is turning into the sports nutrition “battle of the ages.”
If we had this battle handicapped by the Las Vegas sportsbooks, Glanbia would be the huge betting favorite heading into this year’s “All Valley Karate” championship. But as anyone knows the classic 80s movie storyline, Glanbia shouldn’t underestimate the Crane Kick from The Hut Group. OK, enough with the Karate Kid references…I think it’s time to meet our competitors…
Glanbia
Revenue (2022) = $5.94 billion
Glanbia Performance Nutrition (GPN) Revenue (2022) = $1.71 billion
GPN Portfolio Brands = Optimum Nutrition, SlimFast, BSN, ISOPURE, Amazing Grass, Think!, LevlUp, Nutramino, and Body & Fit.
Largest Brand = Optimum Nutrition (acquired in 2008) and estimated to generate $960 million in 2022 revenue.
Vertical Integration Assets = Glanbia Nutritionals (U.S. Cheese and Nutritional Solutions)
Strengths = Outside of “owning the cows”, they possess unmatched innovation capabilities. GPN is positioned well in sales channel and format to take advantage of category dissemination trend. GPN is also very strong at online marketplaces.
Weaknesses = Digital brand storytelling hasn’t kept up with market leaders and that’s affected GPN’s ability to drive meaningful DTC revenue. With the decline of SlimFast, performance of food and beverage formats has lagged expectations, especially considering the level of resource allocation. Market shifts have caused some cannibalization between GPN portfolio brands.
The Hut Group (THG)
Revenue (2022) = $2.71 billion
THG Nutrition Revenue (2022) = $809 million
THG Nutrition Portfolio Brands = MyProtein, Myvitamins, Myvegan, COMMAND, BeNu, and Exante Diet.
Largest Brand = MyProtein (acquired in 2011) and estimated to generate $650 million in 2022 revenue.
Vertical Integration Assets = Claremont Ingredients, David Berryman, and Brighter Foods Limited
Strengths = THG Ingenuity provides top-notch creative agency, ecommerce technology, and operating ecosystem, to fuel glocalized (global + localized) ambitions.
Weaknesses = While THG Nutrition is profitable, the entire THG group continues to sustain operating losses. THG Beauty is double the size of THG Nutrition and sometimes causes resource allocation challenges.
Who Wins? Glanbia vs. THG
THG wins if:
global supplement category purchasing continues to shift online in a meaningful way
more supply-side M&A happens to strengthen margins and protect innovation capabilities
MyProtein gets all the attention, yet the global product portfolio is managed diligently
Glanbia wins if:
current trends of incremental category growth is mostly captured in large physical retail channels
they connect the cow to the consumer better…resulting in unparalleled margin reinvestment
they clean up GPN brand portfolio to free Optimum Nutrition from any cannibalization
Will They Become Frenemies?
Only time will tell how this sports nutrition “battle of the ages” ends, but how about an alternative idea!?!
Within the recent 2022 Year-End earnings release, Glanbia laid out a collection of GPN strategic priorities. The fourth GPN strategic priority is to master digital commerce at scale. In 2022, the digital channel accounted for 29% of the total GPN revenue (growing at a rate of 10% YoY.)
While GPN does a…
great job on marketplaces
decent job at DTC
meh job on digital storytelling
It makes me wonder if it’s time for Glanbia to go big and acquire MyProtein…along with creating a strategic partnership with THG Ingenuity. This would hugely accelerate the strategic priority to master digital commerce at scale don’t you think?