Rising interest in protein drinks, coupled with new innovation, helped Quest and OWYN (Only What You Need) offset the faltering Atkins brand for parent company The Simply Good Foods Company (SGFC) during the second quarter.
Simply Good is leaning on the performance of OWYN, which it acquired for $280 million in June 2024. The brand’s net sales increased 57% to $33.8 million in Q2, contributing 10.8% to overall growth.
Simply believes it’s “still in the early innings of OWYN’s growth story,” according to president/CEO Geoff Tanner, who’s targeting 2x sales over the next three to four years. Why the optimism?
OWYN has emerged as the leader in plant-based protein RTDs, per Tanner, which are “turning 50% faster” than its nearest competitor (4-packs are also +DD) – and that’s with just an average of seven SKUs per store and brand ACV of 60%. The powder business (~$25 million) also has room to run.
The company is pegging sales for OWYN at $140 million to $150 million for the full fiscal year, at which point it will have repaid close to all of the $250 million borrowed to finance the acquisition.
Around half of OWYN’s growth is coming from new doors and SKUs, with the other half coming from increased velocities.
What Tanner Said: “To deliver on the targets we set, we need mid-20% growth. And we believe this is very, very doable. And that’s without even thinking about any other vectors, whether it’d be expanding into bars.”
OWYN and Quest – whose second attempt at a high-protein (45 grams) milkshakes last month has been a “bullseye for the Quest consumer,” per Tanner – now represent 70% of the total business. That’s been particularly good news as Atkins – around 30% of the business – hits a rough patch.
At one of the company’s “largest customers,” a 70% cut to display space for Atkins was offset with some gains for OWYN and Quest; “Where we see opportunities to switch out underperforming SKUs on Atkins with faster turning Quest and OWYN SKUs, we will do this,” said Tanner.
Protein sublime Atkins Strong (30 grams per serving) has been a bright spot, and will be supported with new packaging and marketing as retailers “try to figure how to take a leadership position in weight wellness” amidst soaring use of GLP-1 drugs.