Meanwhile, creatine has been one of the hottest ingredients/products within active nutrition. According to SPINS, 52-week brick-and-mortar sales of creatine products nearly doubled in each of the past two years. In addition to its traditional association with exercise performance enhancement, brands are marketing its other benefits, such as mood and cognitive health.
- Better flavors and specialty formulations broaden the appeal of active nutrition products, expanding the customer base and making these products more accessible to mainstream consumers. There are now numerous examples of protein powder brands collaborating with well-known consumer brands for new flavors (e.g., Ghost and Cinnabon, Ryse and Country Time Lemonade, Axe & Sledge and Icee) as well as brands tailoring formulations to consumer dietary restrictions or preferences (e.g., plant-based, dairy-free).
Increasing usage of GLP-1s amplifies active nutrition growth drivers, resulting in additional market opportunity
While GLP-1R agonists have been used to treat Type 2 diabetes for nearly two decades, off-label usage of semaglutides (e.g., Ozempic, Wegovy) for obesity/weight loss has triggered a new wave of interest in GLP-1s. Around 5.6 million Americans were prescribed a semaglutide medication in 2023, a fortyfold rise over the prior five years, according to Epic Research. The research also notes that just 58% of semaglutide drug prescriptions in 2023 were to people with Type 2 diabetes, down from more than 90% in 2018. Morgan Stanley Research analysts expect their usage to increase, estimating that 24 million people, or 7% of the U.S. population, will be taking weight loss drugs by 2035. Ultimately, the rise in the use of GLP-1 drugs to support patients with their weight loss has an amplifying effect on each of the aforementioned growth drivers of the active nutrition market.
Clinical trials such as one noted by UCLA suggest that rapid weight loss from Ozempic can lead to loss of muscle mass, while according to the National Library of Medicine the weight loss observed in a clinical study trial of semaglutide was attributable to losses of both fat and lean mass, with approximately 40% of weight loss reported to be fat-free mass. The loss in muscle mass can further drive consumer interest in strength training and associated spend on active nutrition products.
- As GLP-1 users look to maintain muscle mass and caloric intake, a range of active nutrition products can support their expansion of use beyond workout recovery.
- The effect of GLP-1s’ suppression on appetite may result in a deficiency of key nutrients, such as protein. Suppression of appetite via GLP-1s, coupled with the increasing consumer interest in protein, supports growth in active nutrition products such as ready-to-drink proteins and protein supplements beyond workout support for general wellness.
- As GLP-1 users turn to active nutrition products, this new customer base will likely look for familiar, good-tasting flavors and products targeted specifically to their needs, such as Pure Protein’s new “All in One Protein Powder,” which contains fiber, protein and vitamins. As Pure Protein’s brand director has noted, consumers — particularly those taking GLP-1s — are looking for “simplified yet effective solutions to help them achieve their health and fitness goals.”
Overall, the rising prevalence of GLP-1 use highlights an opportunity for players in the active nutrition market. Among retailers, there is evidence of a concerted effort focused on meeting the evolving needs of their consumer base, such as The Vitamin Shoppe’s launch of Whole Health Rx, a telehealth service that connects users with providers to help them access GLP-1 medications for weight management. Active nutrition brands and retailers that capitalize on the second-order effects of the increase in GLP-1 use will be poised for growth.
Acquisition opportunities abound
Together, the surge in consumer focus on strength training, a range of new flavors and formulations, and the tailwinds created by the explosion in the use of GLP-1s are a clarion call to companies and/or investors looking to participate in active nutrition. And there’s no shortage of emerging/independent companies to consider as acquisition targets.
Here are some key considerations for investors as they evaluate potential individual targets:
- Product mix. Does the brand have a meaningful presence in large, faster-growing product segments within active nutrition? How have the brand’s sales performed relative to the market’s growth?
- Channel mix. Has the brand demonstrated an ability to successfully expand to retail?
- Consumer target. Who is the brand’s core consumer, and how large is that cohort? Also, how attractive is that cohort (e.g., high usage, willingness to pay, brand stickiness)?
- Brand affinity. Has the brand demonstrated high consumer affinity (e.g., Net Promoter Score, repurchase rates)?
Given the low barriers to entry in certain product categories within active nutrition (e.g., protein powder), brands should also have a demonstrable point of differentiation, such as ingredients or formulations, flavor profile, or marketing/distribution advantage, in order to be considered a truly attractive acquisition target.
An active investment opportunity
With usage opportunities that span the workout life cycle and beyond, an ever-greater number of flavors and formulations, the halo effect of GLP-1s, and the continued rise of strength training, the time is now for investors to take advantage of the opportunity that active nutrition products present.
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