Premier Protein Just Signaled More Growth Ahead | BellRing Brands 2023 Q2 Update

The gang’s all here again…which should be huge news for Premier Protein heading into the back-half of its fiscal year. But as I normally do with my performance update content of publicly-traded functional CPG brands, I will use the recently filled earnings report, earnings conference call, and any relevant publicly disclosed news, in this case it’s BellRing Brands (NYSE: BRBR) 2023 Q2 earnings release, to obviously update you on the performance of brands in that portfolio, but also use it as the backdrop to discuss market insights within the active nutrition formats of the liquids and powders. BellRing Brands 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 the increased household penetration of RTD protein shakes that promote active lifestyles. Bellring Brands had a strong 2023 Q2 with net sales reaching $385.6 million, which was up 22.3% YoY. Premier Protein (~80% of BellRing Brands total revenue) grew 26.2% YoY because it was able to exercise pricing power because of its strong brand equity in the inflationary market. Dymatize Nutrition was up 10.5% YoY stemming from price increases. Moreover, I provide two deep dives into the functional CPG portfolio's "hero SKU families" of Premier Protein RTD protein shakes and Dymatize whey protein powders. Finally, I explain why Premier Protein bringing back a collection of its slowest velocity SKUs speaks to the confidence that BellRing Brands leadership has in its production expansion plans. In the latest quarter, they saw double-digit production growth and expect to have incremental capacity in 2024 north of 20%. I’ve talked about this extensively in previous content, but the company has a plan they are executing on for additional supply which included adding capacity to existing co-manufacturing network, expanding the co-manufacturing network, and having former big poppa Post Holdings build an aseptic processing facility to produce RTD shakes. Additionally, the footprint in each of these new facilities is much larger and allows for a quicker ramp up in the case of adding more production lines. You might be wondering how a billion-dollar RTD shake product line, that’s already the market leader, can grow 100s of millions more each year? Remember, for one…Premier Protein hasn’t been able to do much marketing or pull any substantial promotional levers. Secondly, they didn’t have their full lineup of flavors on shelves at most retailers until very recently. And finally, they’re severely under-distributed in the grocery and mass channels. So, there’s A LOT more upside in the brand, believe it or not…and that doesn’t even consider Dymatize continuing its growth story. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS LINKEDIN - ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/in/joshuaschallmba⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TWITTER - ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.twitter.com/joshua_schall⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ INSTAGRAM - ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.instagram.com/joshua_schall⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ FACEBOOK - ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.facebook.com/jschallconsulting