I think it’s finally time for THG to file the necessary SEC paperwork, so my September 2022 MyProtein prediction can become a reality. THG (aka the company formerly known as The Hut Group) recently updated the public markets by releasing its 2023 Q3 earnings report. I’ll be utilizing that financial information, along with notes I took listening to the earnings conference call, and any relevant publicly disclosed information to obviously update you on the recent performance of THG Nutrition division that includes the world's largest online sports nutrition brand MyProtein, but also utilize everything to provide insights surrounding the global supplement markets. For those unaware, THG is self-described as “a vertically integrated, digital-first consumer brands group, retailing its own brands in beauty and nutrition, plus third-party brands, via its complete digital commerce solution, Ingenuity, to an online and global customer base.” During the third quarter of 2023, divisional revenue for THG Nutrition was approximately $195 million, which was down 2.3% YoY. If we look at THG Nutrition segment revenue for the first 9 months of 2023, it generated about $619 million…which was up 0.4% YoY. Why are these growth rate low? especially if we look out over the last two years (being up only 3.7% in that period)? I'll dive into several things going on here at MyProtein including: its ecommerce sales channel strategy, integration of supply side acquisitions, MyProtein rebrand causing short-term revenue impacts, and pricing strategy in an inflationary environment. Though it only makes up one-third of the total portfolio revenue, THG Nutrition accounts for almost all its profitability. While THG Nutrition isn’t a standalone business, strategy within the segment (over the last two years) has been focused on creating optionality. I predict that sets THG up to spun-off its “nutrition segment” into a standalone public company. This new entity will likely IPO in the U.S. markets because of the more favorable market conditions. Finally, I dive into arguably the top 3 growth drivers that THG Nutrition needs to focus on over this next year to make themselves more attractive to the U.S. investment community.

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I’ve said it once and I’ll say it again…it’s crazy how the number one brand in the entire convenient nutrition category (e.g. Premier Protein) can still have so much untapped organic growth opportunity! BellRing Brands (NYSE: BRBR) is a portfolio that owns a collection of convenient nutrition brands like Premier Protein, Dymatize Nutrition, Powerbar, and Joint Juice, 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. Bellring Brands had a strong Q4 with net sales reaching $472.6 million, which was up 24.6% YoY. Premier Protein (~83% of BellRing Brands total revenue) grew 30.2% YoY, which came from mostly volume increases. Dymatize Nutrition was down just under 1% YoY stemming from a slight volume decrease. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize protein powders. In this quarter, BellRing Brands leadership decided to discontinue the operations of PowerBar in the North American market, but the company will continue offering the brand internationally. Finally, I explain several different growth opportunities that are untapped at Premier Protein. These include how operational improvements will create more revenue and my predictions that Premier Protein will start to diversify both its highly concentrated domestic sales channel mix (e.g. convenience stores) and geographical revenue mix.

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Remember those good ole days of Instagram when everyone shared an embarrassingly high number of food photos? Well…maybe it’s time to party like it’s the early 2010s again, but this time utilize those food photography skills in a useful manner. If Google Lens is best described as a search engine for the real world, then SnapCalorie would be that guy with a six pack your girlfriend has pictures of saved in her phone but told you not to worry about. SnapCalorie is an advanced computer vision-powered app that uses AI to get an accurate calorie count and macronutrient breakdown of a meal from a single photo taken with a smartphone. The fact is that human beings are terrible at visually understanding what they’re putting in their bodies. So, in the “Age of Ozempic” this technology could be a huge value-add.

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After a month of owning MusclePharm…has FitLife Brands given us any hints of what’s to come next? For those unaware, the supplement brands that are within the FitLife Brands portfolio are categorized in three segments…NDS Products (which are a collection of brands mostly sold in the GNC franchise system), iSatori Products (which are a collection of brands sold through a diversified retail mix), and the recently acquired Amazon-focused brands within Mimi’s Rock Corporation. In total, the FitLife Brands portfolio is sold through more than 20,000 retail locations globally. In the third quarter of 2023, FitLife Brands Inc. (NASDAQ: FTLF) had revenues of $13.9 million…which was up 67% YoY (yet all quarterly growth plus more was attributed to the February 2023 acquisition of Mimi's Rock affecting the comparatives). In a short amount of time post-acqusition of Mimi's Rock, FitLife Brands has been able to cut around $3.5 million in annualized SG&A costs. This strategic activity confirms what I’ve stated in the past about the company being sound operators that lean towards fiscal conservatism, but I’m still a bit weary on how this will play out with adding in MusclePharm, a second “major” acquisition that happened within about eight months. FitLife Brands officially closed the $18.5 million acquisition of the bankrupt MusclePharm on October 10, 2023. So, are we to expect that FitLife Brands will utilize the same Mimi’s Rock integration gameplan with MusclePharm? In this content, I'll predict the likely strategic turnaround plan at MusclePharm that includes rebuilding the Assault pre-workout platform and refining the Combat protein platform. While it’s silly to believe that MusclePharm won’t require a whole bunch of energy put towards turnaround efforts, I think FitLife Brands leadership is underselling its potential in 2024.

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Some stressed out entrepreneurs drown themselves in alcohol, my stress relieving “vice” is that nighttime bowl of ice cream. I subscribe to the theory that there’s no problem too large that sugar can't solve. But what if the problem was that sugar-loving consumers want to maintain the same taste of their indulgences but curtail their sugar consumption? For many indulgence focused CPG brands that offer sweets, sugar reduction remains a top priority. While adding sweeteners (usually the artificial ones) was typical…sucralose, erythritol, and others have been getting beat up in the court of public opinion. But the largest food company in the world, Nestle, continues to search for alternate options through food technology advancements. One recent breakthrough uses an enzymatic process to reduce intrinsic sugar in ingredients such milk by up to 30%...with a minimal impact on taste and texture.

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Is there still some Bang left in Jack Owoc’s fight for the company he founded? While the bulk of this content is going to be focused on reconciling what I previously predicted Monster Beverage would do with the Bang Energy asset to the actual turnaround strategy that Rodney Sacks (Monster Energy CEO) has been slowly providing details of within their quarterly earnings conference calls. And since Monster did just release their 2023 Q3 earnings report, I'll start this content off by running through some high-level financial data. This will obviously update you on how the existing brands within the Monster Beverage portfolio have been performing recently, but more importantly give context for my expanded strategic commentary on energy drink market dynamics and trends…plus it will make the Bang Energy information more relevant and impactful. Though the portfolio of Monster Beverage brands have a larger market share in the U.S. convenience channel than Red Bull, I'll bring up data that shows why the Bang Energy acquisition is maybe more important than you think when it comes to competing against CELSIUS, C4 Energy, and GHOST Energy. I'll also share information on many of the most important strategic gameplan elements that should help the Bang Energy expected turnaround opportunities become reality. These elements include: why Bang Energy is being distributed by the Coca-Cola DSD system, what those initial results were and Monster Energy sales strategy going forward, and why Monster Energy is cutting many Bang Energy flavors. Finally, we can’t talk Monster and Bang without some legal chatter, right? We already know that on July 31, 2023…Monster Beverage Corporation completed its acquisition of Bang Energy. As you can imagine that deal clears up A LOT in the legal dispute area…but not everything.

Remember that scene in Talladega Nights where the original driver leaves the track and Lucius asks the pit crew if anyone wants to jump in the car and go fast? Well…Celsius Holdings is the energy drinks version of Ricky Bobby! This is only the third quarter that Celsius energy drinks was fully integrated into the PepsiCo DSD distribution system after the August deal announcement. Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $385 million, which was up 104% YoY. According to IRI last 52-week data, Celsius was the number one brand driver of unit and sales growth in the energy drink category. Celsius was responsible for 28% of the category growth, driving $950 million in incremental sales. In addition, according to the trailing 4 weeks of IRI SPINS all tracked channel data for the period ending October 8, 2023, Celsius is now securely the third-largest energy drink brand in the category. Its market share went from 4.4% in the third quarter of last year to 10.5% 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. In the quarter, CELSIUS became the best-selling energy drink on Amazon and also number one energy drink brand on Instacart grocery marketplace. So, it’s safe to say that CELSIUS is the official energy drink of the Internet Generation. Additionally, the international expansion groundwork with PepsiCo is getting laid now, so Celsius energy drinks can capture what they believe is a significant opportunity for incremental growth over the next three to five years. Finally, CELSIUS has a household penetration of about 25%, compared to 11.1% a year ago. This makes the energy drink brand the number one growth brand in household penetration. CELSIUS have incurred substantially more in marketing and advertising expenses, but it’s not misaligned with revenue growth. In fact, it’s almost the same with YTD Celsius revenue growth at 104% and the marketing and advertising expenses up 108%. This shows us that marketing strategies (though outsized from years prior) are driving ROI.

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CELSIUS is climbing the energy drinks leaderboard, but to catch Monster Energy…maybe they need to think like Monster Beverage Corporation and The Coca-Cola Company. So, I’m scrolling through a slew of business news the other day and I see a Bloomberg article headline…seemingly taken from an interview with Celsius Holdings CEO John Fieldly that states “potential acquisition on the horizon.” While I'm quite certain John Fieldly wouldn't show his cards like that, I actually think a certain publicly traded beverage portfolio acquisition makes a lot of sense for Celsius Holdings (NASDAQ: CELH) to target in the near-term future. Just to finally rip the Band-Aid off, I’m suggesting that Celsius Holdings acquires The Vita Coco Company (NASDAQ: COCO). Throughout this content, I'll share my investment thesis on this super interesting beverage industry M&A prediction.

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Digital marketers at functional CPG brands better watch how they flex on Instagram. When Powerade reformulated its beverage to contain more electrolytes earlier this year, The Coca-Cola Company decided to take a few swipes at hated rival PepsiCo...owner of Gatorade. In one of these “Powerade vs. Gatorade” social media posts, it featured a side-by-side comparison of electrolytes and vitamins with the caption reading, “don’t underestimate our electrolytes” followed by a flexed arm emoji. Harmless enough, right? Wrong! The “National Advertising Division” sided with Gatorade’s compliant that the ad implied that Powerade “delivers superior heath, hydration, and performance benefits and through the flexed arm emoji, that drinking Powerade will make consumers stronger than Gatorade.” This decision could have broad implications, as functional CPG brands will need to understand that common emojis can convey claims that require substantiation.

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If there’s one thing consistent about Glanbia each year, it’s that the global nutrition group always makes at least one acquisition. 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 2023 YTD revenue increased 2.7% YoY, but that was a sequential slowdown from the first six months in 2023. The brand portfolio continued to have strong pricing power in the market (with it being up 8.9%), but volume was down 6.2%. 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 61% of the total GPN revenue. In the first nine months of 2023, Optimum Nutrition had 14.5% growth coming from both pricing and volume gains…and U.S. market retail consumption growth in tracked channels was 9.5% over the twelve-week period ending September 10, 2023. 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 drugs (e.g. Ozempic, Wegovy, etc.), why Optimum Nutrition needs to grow its protein RTD beverage offering, and why Optimum Nutrition needs to go back to the drawing board with Amino Energy to win any share in the energy drinks market.

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