the Joshua Schall Audio Experience Joshua Schall

If you get too close to the sun, you will burn. This is the recent story of Premier Protein. BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein and Dymatize Nutrition, which was previously wholly-owned by Post Holdings. A fast-paced and busy lifestyle is pushing consumers to switch to quick and healthy meal options. This has resulted in above average categorical growth rates and increased household penetration of RTD protein shakes that promote active lifestyles. Additionally, powders are becoming more mainstream, and category proliferation has created an environment where more consumers are purchasing both every day and performance nutrition positioned protein products at grocery stores and mass retailers. Bellring Brands had a strong 2024 Q2 with net sales reaching $494.6 million, which was up 28.3% YoY. Premier Protein (~85% of BellRing Brands total revenue) grew 33.8% YoY, which came from large volume increases. Dymatize Nutrition was up 4.6% YoY, stemming from volume and price increases. Moreover, I provide three deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Premier Protein and Dymatize protein powders. As I’ve detailed in the past, Premier Protein has been partnering with the biggest and most reputable players in the industry to make large CAPEX investments…which has now given them a scalable, regionally diverse supply chain that will enable many years of robust growth. And you might be thinking, “what does that have to do with Premier Protein getting too close to the sun and getting burnt?” Well…generally speaking, business growth is a sign of success. However, when supply is still constrained, and demand is greater than expected…you can get yourself in trouble fast. This past quarter, Premier Protein tried to push the boundaries on promotional activity…and continue launching new flavors (that excite the marketplace), all without the needed retailer and internal inventory buffers. Because of that, Premier Protein likely will need to pull back on promotional activity in the second half of its fiscal year. I’d caution them to slow down a bit, rebuild inventory levels (with the production ramp up) and get ready for the 2025 “New Year, New You” period. Why? I think 2025 has an interesting setup brewing within the RTD protein beverages marketplace: (1) I believe there will be A LOT more brand competition within this protein category format (including Dymatize), (2) I believe mass and grocery retailers will start to give RTD protein beverages more placements outside of the typical healthy living/pharmacy space, and (3) all these activities will be blanketed with likely higher protein input costs. So, things should be fun to say the least!


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What does a famous scene in Goodfellas and a renegotiation of the PepsiCo and Celsius distribution deal have in common? Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $356 million, which was up 37% YoY. During the trailing twelve months, Celsius Holdings smashed through the billion-dollar mark…with the energy drink brand generating $1.41 billion in revenues over that period. According to Circana last 13-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. In addition, according to the trailing 4 weeks of Circana all tracked channel data for the period ending March 31, 2024, Celsius is now securely the third-largest energy drink brand in the category. Its market share grew about four percentage points YoY to 11.5% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. CELSIUS is now the best-selling energy drink on Amazon. Additionally, the early international market development groundwork starting to formalize with CELSIUS extending its relationship with Suntory Beverage & Food and also saw the first major international market expansion under the PepsiCo umbrella, as sales and distribution activity in Canada began in December 2023. It's my opinion that international expansion presents significant opportunity for incremental growth over the next three to five years. With Celsius at basically full distribution now…the TDP growth will have to come from increased items carried per store. In this quarter, average SKUs per retailer increased to 20.6 from 13.5 in the prior-year period…causing TDP growth of 55% YoY and 27% sequentially. Going forward, Celsius will increase items per store through a combination of product strategies like flavor expansion, scaling the new Essentials lineup, and reintroducing iterated line extensions like fizz-free. Additionally, they will seek more store placements like leveraging cold display activity in Celsius-branded coolers. Finally, I connect the dots between one of the greatest movies of all-time, Goodfellas...and a recent 8-K report about the amended PepsiCo and Celsius distribution deal. In return for extra incentives on sales of Celsius with adjustments for promotions, John Fieldly likely asked for some extra non-compete coverage in the energy drink category. There’s been some speculation that PepsiCo was interested in trying to unravel the mess of a structure that is Congo Brands/Alani Nu/PRIME (most likely get a share of Alani Nu), but it looks like that option is being put in witness protection (at least for the near-term).


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Maybe it wasn’t the most impressive first official reporting period for Glanbia’s new CEO…though it’s not always about how you start that’s important, but how you finish, right? Glanbia Performance Nutrition is one of two wholly-owned segments of Glanbia plc (LON:GLB), a multibillion-dollar global nutrition company. The brands in the Glanbia Performance Nutrition portfolio include; Optimum Nutrition, BSN, think!, Isopure, Amazing Grass, and SlimFast. I'll use the recent earnings report, earnings call, and associated news to update you on how Glanbia Nutritionals and Glanbia Performance Nutrition is performing against the complex operating environment. Glanbia Performance Nutrition had 2024 first quarter revenue that decreased 1.9% compared to last year. The brand portfolio had volume growth of 1.4%, but that was more than offset by price decline of 3.3% YoY. Additionally, I'll dive deeper into Glanbia Performance Nutrition geographical and product categorial performance (performance nutrition, healthy lifestyle, and weight management). BTW I’m thinking about the creation of a change.org petition for the Glanbia Performance Nutrition division name to be amended to The Optimum Nutrition Company. This one brand alone now accounts for 64% of the total GPN revenue. In 2024 Q1, Optimum Nutrition had 5.6% growth coming from both pricing and volume gains…and U.S. market retail consumption growth in tracked channels was basically flat over the 13-week period ending March 23, 2024. Additionally, Optimum Nutrition generated over $1.1 billion in revenue last year...which makes it the number one sports nutrition brand in the world and also the top sports nutrition brand in 18 different countries. Finally, I talk through a collection of hot takes or things I’m left pondering about Glanbia at this current time. These include where the struggling legacy brand SlimFast sits inside of an evolving weight management category that has seen huge spikes in GLP-1 weight loss solutions (e.g. Ozempic, Wegovy, Zepbound, etc.), think! protein bars and Girl Scouts collaboration, recent marketing strategic partnerships (McClaren F1, Spartan Race, and Sky Sports), dry whey and cocoa commodity pricing, and ISOPURE picking up momentum.


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41 months after I posed the original question, The Simply Good Foods Company has finally given me the answer I’ve been waiting for! So, I’ve been alluding to this “eat or be eaten” phase of The Simply Good Foods Company for the last 3.5 years. But only a few days after posting that January 2021 Simply Good Foods prediction, the company released its first quarter earnings report and then-CEO Joe Scalzo dropped some details on the conference call that I turned into another more detailed prediction mostly exploring plant-based protein convenient nutrition names...one of which was a relatively under-the-radar brand named Only What You Need (OWYN). And for those that haven’t seen last week’s headlines yet (and are confused by all that previous information), The Simply Good Foods Company announced that it had entered into a definitive agreement under which it will acquire OWYN for $280 million in cash. For my finance people that enjoy knowing the deal specifics, that purchase price represents a multiple of approximately 2.3x estimated 2023 net sales and 13.3x estimated adjusted EBITDA, including run-rate synergies. Seeing the gap in the protein beverages market, OWYN was created in 2017 to delivered enough plant protein and the right combinations of amino acids for muscle building and repair…plus enough calories to provide sustainable energy during workouts and training. In that same year, CPG legend Jason Cohen and longstanding partner Clearlake Capital invested in OWYN and helped fill key management positions with people who had deep industry experience…one of which, Mark Olivieri, was arguably the most impactful. He led brand marketing that evolved the brand purpose of OWYN to stand for truth and transparency and positioned OWYN as not just another plant-based option, but as a riskless plant-based option. He built a strategic narrative around the belief that the detrimental health impacts of over-claiming and under-testing is not just a marketing issue, but also is a social issue. Mark Olivieri would eventually become President and then CEO in August 2021, leading them through a few key investment transactions, and staying true to that quest to fuel bodies with cleanest nutrition…thus turning OWYN into a powerhouse brand across multiple sales channels, product formats, and pack types. In fact, within the last 52-week period ending March 24, 2024…OWYN is the fastest growing RTD protein shake brand in the market (growing 10 times more than the categorical average). Why I said OWYN “gets slept on” too much within the protein category is they are in the early phase of building a truly distinctive brand that has increasingly, mainstream appeal with a highly engaged, passionate core customer. But the remaining part of this content piece will focus on why (beyond the brand strategic narrative stuff that) I thought OWYN was a strategically compelling M&A opportunity way back in 2021 and why Simply Good Foods finally saw the light now...and then what does this mean to the convenient nutrition competitive landscape (Should market leaders like Premier Protein, Fairlife/Core Power, and Muscle Milk be nervous?)


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Who wins in a fight…Travis Scott or Kylie Jenner? No, this isn’t one of those weird man vs. woman fetish wrestling matches…I’m referring to an alcoholic beverage brand fight. It was recently announced that beauty CPG category mogul and “Kardashians” personality Kylie Jenner is launching Sprinter…a canned vodka soda cocktail. But if you remember…Kylie Jenner’s baby daddy (aka the talented rapper and cultural icon) Travis Scott launched agave-based hard seltzer brand Cacti with beverage giant Anheuser-Busch in 2020. While the liquid got meh-level customer reviews at the time, Cacti was abruptly discontinued at the end of 2021 after a crowd-crush incident happened during the Houston Astroworld concert. However, Travis Scott has been utilizing a subliminal marketing push since last December…suggesting Cacti will be returning with a new and improved product in 2024.


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Does it matter that Liquid Death “swung on and missed” its first attempt at extending its platform beyond the ready-to-drink beverage category? If you checked out my “beverage identity crisis” content from last week, I had originally intended to include these Liquid Death format expansion insights in that piece. But there was a bit too much strategic nuance that I believed would create confusion with the previous content’s central focus. So, instead…I figured I’d give this important recent Liquid Death business activity its own content…because there’s honestly a lot to unpack (learnings wise) that I believe can be valuable to my community of CPG industry leaders. In typical Liquid Death fashion, the beverage brand shared an entertaining video in mid-February 2024 to promote it had created a new powdered electrolyte hydration supplement drink mix. Death Dust comes in three flavor variants, each were formulated with the approach of them being lightly and naturally sweetened and flavored. Liquid Death also leveraged known flavor IP from its flavored sparking water SKUs. The Death Dust powdered hydration supplement stick packs were launched on Amazon (and direct-to-consumer) only. From a marketplace perspective, dollar sales for sports drink mixes were up 53% YoY for the last 52-week period ending 3/26/24. So, that’s obviously an attractive adjacent category for a beverage brand with the “platform strategy friendly” tagline of “Murder your thirst.” And even though the billion-dollar sports hydration powder market is filled with heavy hitter brands owned by the likes of Unilever, PepsiCo, The Coca-Cola Company, and KDP…the unit economics of these products in terms of categorical gross margins (but especially net margins) are still quite desirable to Liquid Death. Now…for those pundits (that spewed hate when Death Dust launched), talking about Liquid Death profitability struggles and how this was a “Hail Mary” type move to save the company, come on guys let’s be real here! Liquid Death has only been around since 2019…achieving triple-digit growth for three consecutive years and generating $263 million in retail sales last year. It’s in over 120K retail locations and has become the fastest-growing brand in the water, flavored sparkling water, and tea categories. Liquid Death can pull that feat off because of its ability to achieve the rare feat of successfully building a truly distinct and memorable brand. Within the CPG industry, you’ll hear A LOT of entrepreneurs say, “our CPG brand this or that.” But few ever get past being simply a company that attempts to sell undifferentiated products. Yet, when you can sell a product that also brings someone an extremely desirable emotion like belonging/connection or status…you’ve done something special. But this isn’t just another one of those “I love the Liquid Death brand strategy” pieces of content…you’ve heard that story too many times already. Instead, I wanted to analyze nuanced strategic aspects about the Liquid Death “beverage identity crisis," which include the...CPG industry innovation paradox, double-edged sword effect of using known flavor systems, utilizing “lean startup” ideologies, leveraging the beautiful, underappreciated value of an online marketplace like Amazon. Liquid Death might not think “Death Dust” was a big swing, and by categorical size it wasn’t, but we are still talking about a relatively young CPG brand that missed on its first format (and I’d argue functional beverage) expansion.


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