As it moves to discontinue its PowerBar brand business in North America, protein products portfolio company BellRing Brands announced full fiscal year 2023 net sales over $1.6 billion, up 21.5%, in an earnings report this week.
- Operating profit for the full fiscal year 2023 was $287.3 million and net earnings were $165.5 million.
- Premier Protein reported net sales up by 24.8% in the full fiscal year, with 10.7% volume growth and 14.1% price/mix increase.
- Dymatize saw full year net sales grow 10.8%, fueled by a 3.8% volume increase and +7% to price/mix.
- The fourth quarter saw net sales of $472.6 million, up 24.6% year-over-year. Volumes in Q4 increased 19.4% and price/mix improved by 5.2%.
- In Q4, the Premier Protein brand reported net sales up 30.2% with a 21% rise in volume and 9.2% price/mix increase. RTD shakes were up 28.9% with a 21.2% boost to volume and 7.7% rise in price/mix.
According to president and CEO Darcy Davenport, BellRing’s overall sales benefited from strong velocities, distribution gains and increased promotional activity for Premier Protein, its core brand which includes RTD shakes and powders, as well as additional products like protein-rich pancakes and cereal.
“In addition to seeing strong market share gains, Premier Protein significantly grew household penetration,” Davenport said in a statement. “Dymatize also experienced robust consumption growth, benefiting from new households and distribution gains. Our momentum remains high on both brands with the convenient nutrition category providing strong tailwinds. Our shake capacity expansion is on track and the long-term prospects for our company and our brands remain bright.”
However, low sales for PowerBar led to a decision during Q4 to discontinue the legacy brand in North America. According to the company, PowerBar reported just $7.7 million in net sales in North America for the full fiscal year. The decision led to a $7.1 million cost in accelerated amortization, but BellRing now expects PowerBar to be fully discontinued in the region by the end of the calendar year.
The brand, which initially debuted in 1986 and had changed ownership several times before it was acquired by the Premier Nutrition Company in 2021, will still be sold in international markets.
During a call with investors and analysts yesterday, Davenport noted that BellRing has made improvements in its supply and manufacturing capabilities, after it previously grew production by 17% during fiscal year 2022. The company is beginning operations at a new production facility for its RTD shake lines next month.
“Over the past two years, we have transformed our shake co-man network,” Davenport said. “We have partnered with the biggest and most reputable players in the aseptic, low-acid industry. We now have a scalable, regionally diverse supply chain, which will enable many years of robust growth.”
In regards to Premier Protein, Davenport pointed to innovations such as the seasonal Pumpkin Spice shake flavor as helping fuel growth – the SKU earned 90% incrementality to the brand.
“Q4 trends continued in October, with shake consumption up 27%, with volume driving two-thirds of this growth,” she said. “Our brand metrics reflect our building momentum as Premier Protein reached all-time highs in TDPs and market share.”
Powder sales also showed momentum, rising 50% as distribution gains boosted sales. Premier Protein powders accounted for over $50 million in net sales for the full fiscal year and Davenport said BellRing will invest more in marketing the line in 2024.
Dymatize net sales fell -0.9% in Q4, with a -0.7% drop in volume as the company lapped a “trade inventory build in the international and specialty channels.”
Also in Q4, BellRing repaid $54 million in borrowed funds under its revolving credit facility, along with an additional $25 million to bring its outstanding principal balance to zero.
Davenport also commented on the potential impact GLP-1 weight loss medications (such as Ozempic) may have on the company. Proprietary research, she said, found that consumers most likely to begin using those drugs are “currently light users of protein shakes” but are more likely to increase their consumption of protein and other meal replacement shakes once on the medication, as they require more protein to mitigate muscle loss that can occur as a side effect.
As well, GLP-1 users are more likely to increase their exercise routines and make healthier food and beverage choices, providing an opportunity for BellRing to increase sales with these consumers, she said.