Monday 23 September 2019

Glanbia to target US mass market for protein shakes

Siobhan Talbot Photo: Dylan Vaughan
Siobhan Talbot Photo: Dylan Vaughan

Siobhan Talbot says she has a remedy for tired Americans.

The 51-year-old managing director of Glanbia Plc and one of only two female heads of the biggest 20 Irish companies listed on the stock market wants to persuade US consumers that protein shakes aren't just for bodybuilders. Since she took over the top job in 2013, Glanbia is among Ireland's 10 best- performers, soaring 70pc. Now the cancer-beating executive is tasked with showing investors she can extend that.

Last week, Talbot unveiled a new brand to be sold through Kroger Co, the largest supermarket chain in the US. Glanbia reckons the global performance-nutrition market is worth about $10bn and people needing a little boost in the US might help mitigate a drop in sales elsewhere.

"We've expressed a desire to enter the mass channel for a while," Talbot said in an interview in her Dublin office. "It's for all of us, folks like you and I, that recognise that protein powder in a shake helps us through an afternoon lull. You don't have to feel you are the big gym-goer or serious athlete."

As a Glanbia veteran of 23 years, Talbot has been central to the transformation of a large milk company into one of the world's biggest producers of sports nutrition products.

Glanbia was formed in 1997 through the merger of two of Ireland's largest dairy co-operatives. About 15 years ago, the company started to think about what it could do with whey protein, a by-product of left-over milk. Filtered, dried and turned into powder, whey is sold to promote muscle growth alongside resistance training.

"Global performance nutrition" is Glanbia's most profitable unit, and has underpinned a surge in the company's stock. The company's shares have risen more than 400pc since 2010, giving it a market value of €5.2bn ($5.6bn).

Glanbia mostly distributes its nutrition products through gyms, specialist stores and online. The new brand will encompass a protein water, a canned coffee protein product and a powder.

It will be the first time the company has targeted the US mass market. Talbot declined to say how much the company will invest.

But sales at the unit dropped by 4pc by volume in the nine months to October 3, from the same period a year earlier, as economic turmoil in Brazil and Russia took their toll. Not all analysts are convinced by the move into mass market.

The new strategy "carries risk," said Darren McKinley, an analyst at Merrion Capital, who recommends investors sell Glanbia shares after they rose so much. "Moving into this market is going to require marketing spend, which could reduce margins.

"If margins are flat or drop at Glanbia, that's below investor expectations."

McKinley suggests the company faces "downside risks" to meeting expectations for earnings growth in 2015, and a decline in profitability at the global ingredients unit "is a concern for earnings in 2016."

Talbot said she expects improvement in the current quarter and with momentum back in the US market, she's "comfortable" the company will meet growth forecasts.

An accountant by training, Talbot joined Glanbia in 1992.

She was appointed deputy finance director in 2005, with her role including responsibility for strategic planning until the end of 2012. She was diagnosed with cancer in 2010, working through her chemotherapy and radiotherapy treatment.

When the top job opened up, she said her cancer was "more of an encouragement than discouragement."

"Ultimately, there's a hugely personal responsibility that sits with our career progression," she said.

"That's very empowering."

Irish Independent

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