Glanbia struggles to regain winning whey

For 10 years there was nothing but good news reports about Glanbia’s performance nutrition business. The company had magicked up a €1 billion business from seemingly nothing, turning the whey remnants of its cheese-making operation into a suite of protein powders for gym-goers, dieters and nutritional obsessives.

Sales soared and Glanbia quickly became a global leader in the market. It's estimated to have about 12 per cent of sales worldwide. It's also the biggest seller of these products on Amazon.

However, in 2019, the Kilkenny-based group reported a fall-off in protein sales linked to a raft of issues – tariffs in India, slowing economic growth in South America, supply chain issues in the US and Europe, and an overly-complex product range. Some suspected there was more to it and that the company was deliberately blurring the issue.

Drive growth

Yesterday, managing director Siobhan Talbot insisted most of these issues had now been resolved and the only thing that stood in the way was Covid. Sales of its performance nutrition products – centred around its pillar Optimum Nutrition and Slimfast brands – were hit hard last year as restrictions closed shops and gyms and restricted sporting activity. Talbot, however, says she expects the division to drive growth again this year once the pandemic abates.

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But she admitted the performance nutrition market has become more competitive than it used to be and first movers like Glanbia are having to fight harder to retain their market share. And this seems to be the best explanation for the group’s plateauing performance.

Manchester-based online giant The Hut Group (THG), which operates the Lookfantastic brand, has fast become a rival, attempting to eat into Glanbia's market. It floated on the London Stock Exchange last year, raising £1.88 billion (€2.18 billion) in the process. Another is US-based Bellring, maker of the Premier Protein brand, which earlier this month reported strong numbers despite the pandemic.

A few years back, Glanbia’s performance nutrition division was rivalling its traditional nutritionals business – which produces cheese, butter and protein ingredients – as the main revenue driver. Not anymore. Last year, Glanbia Nutritionals generated €2.68 billion in sales despite the pandemic, more than double the revenue generated by Glanbia Performance Nutrition (€1.13 billion).