Glanbia shares up 20% in the year as it shifts focus from dairy

Nutrition giant forecasted growth between 5% and 8% for this financial year despite posting a 5.5% fall in group revenue driven by dairy market pricing

Glanbia previously moved away from its dairy business after it sold its Glanbia Cheese joint ventures at the end of April 2022. 

Nutrition giant Glanbia shares have jumped 20% in the year-to-date as the firm shifts focus away from the volatile dairy industry.

Glanbia forecasted growth between 5% and 8% for this financial year despite posting a 5.5% fall in group revenue driven by dairy market pricing.

The firm also recorded volume growth of 1.5% in the first three months, compared to the same period a year earlier, but this was offset however by a price decline of 6.9%.

In its interim statement, Glanbia chief executive Hugh McGuire suggested it will continue to shift its focus from poor performing areas like its milk-based Slimfast product and expand its flavours offering “in the attractive and growing natural and organic flavours market, aligned with long term consumer trends.” 

The company recently acquired Flavour Producers in the US for $300m (€281m) to grow its Better Nutrition Platform.

“This acquisition significantly expands our flavours offering and brings new capabilities,” said Mr McGuire.

The company’s Glanbia Performance Nutrition division, which sells its popular Optimum Nutrition protein powder, continued to grow but the company’s Slimfast products weighed on momentum.

Glanbia’s GPN revenue decreased by 1.9% as volume growth of 1.4% was offset by a price decline of 3.3%.

Meanwhile, Glanbia implemented negative pricing in this area as a result of planned promotional activity in the period, which affected sales figures.

Glanbia previously moved away from its dairy business after it sold its Glanbia Cheese joint ventures at the end of April 2022. 

However, former managing director of Glanbia, Siobhán Talbot, suggested last summer the company is still committed to its weight loss drinks brand SlimFast despite lean sales as new competitors enter the market and the company’s diet and weight management category is yet to recover post-pandemic.

The brand is currently battling new competition in the weight loss market including the Danish blockbuster weight loss drugs Wegovy and Ozempic.

Ms Talbot said she expects the declining SlimFast volumes to stabilise in “2024 and beyond”.

It remains to be seen if Mr McGuire shares his predecessor's commitment to the brand.