Did the MyProtein "gain train" slow to a halt or was The Hut Group (THG) owned sports nutrition brand just slowing down briefly to pick up more supporters at the station? THG expects its THG Nutrition segment to sustain a 20% YoY growth rate in 2021, but the latest quarter only showed MyProtein up 13.4%. I believe this is just a short-term slowing, as the solid performance this quarter was against the highest growth quarter in 2020 for THG Nutrition. With over 80% of revenues coming from repeat customers, THG continues to have high category conviction. THG Nutrition is much better equipped than the competitive landscape to handle the current challenging market dynamics. The is because THG Nutrition controls more of its value chain, so the company has less exposure to the outside environment. THG Nutrition is also vertically integrated with six global production facilities that span traditional supplement formats to food and beverages. This will allow them to keep steady inventory levels heading into the "pulled forward" Q1 demand that should hit earlier this year. Additionally, THG has a massive global fulfilment network that is also going through a complete automation overhaul with the help of fellow SoftBank investment portfolio member AutoStore. The increased logistics automation and ongoing cost improvement program will help them offset the recent inflationary environment to sustain its market positioning. There’s a great deal of positive activity happening at THG Nutrition directly and with THG Ingenuity that supports it. Add that to the elevated global interest/demand for the functional food, beverages, and nutritional supplements and it’s very likely THG Nutrition could possibly reach $1 billion in revenue in 2022.

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