Glanbia’s protein bars fightback prompts Investec upgrade

Investec says concern over Glanbia’s global performance nutrition unit ‘unfounded’


Shares in Irish listed nutrition group Glanbia rose on Wednesday, recovering some ground lost recently, as investment firm Investec raised its rating on the stock to “buy”, saying concerns over its global performance nutrition (GPN) unit, which makes and sells protein shakes and bars, were “unfounded”.

Formed out of the 1997 merger of two of the country’s largest dairy co-operatives, Avonmore Foods and Waterford Foods, Glanbia has long since moved away from its roots, selling a 60 per cent in its dairy assets in July to its main shareholder, Glanbia Co-op.

Almost 44 per cent of Glanbia’s €193 million operating profits in the first half of this year came from GPN.

“For a number of years, the market has been focused on GPN as Glanbia’s revenue and profit drive,” said Ian Hunter, an analyst at Investec. “That said, it has been our oft-stated opinion since mid-2015 that this division has failed to deliver.”

Recognisable brand

While the group “rode the wave” of being the first to the market with a recognisable brand, it has since been challenged by a plethora of protein products that have competed on price and moved the market from specialist shops and online to retail stores.

However, Mr Hunter said that Glanbia has been fighting back by expanding its offering and consumer base, evident through its late 2015 purchase of US protein-enriched bars maker ThinkThin, which gave it access to the “female weight management market”.

The analyst said GPN is also looking to win and retain customers through product innovation and seeking to increase its exposure to non-animal protein sources, as evidenced through its purchase this year of a company called Amazing Grass.

The initiatives have helped move Glanbia from “its post-first-mover-advantage downturn” to reposition itself, Mr Hunter said.

Shares in the company rose as much as 3.5 per cent to €16.40 in Dublin, though the stock remains about 15 per cent off its level in April.