Who grabs Gold? The race for the next EU challenger Brand in Sports Nutrition
By Anatole Robiot & Saskia Hoebée
Here at Five Seasons, Sports Mania has officially started. With the Eurocup and Olympics set to captivate audiences worldwide, we took the opportunity to dive deeper into the ~$63B Sports Nutrition category[1]. With multiple headline grabbing acquisitions, from CLIF Bar’s $2.9B sale to Mondelēz, to Keurig Dr Pepper’s $863M investment in Nutrabolt, we see an excitingly acquisitive space, with a lot of potential to create more next-generation challenger Brands. However, the segment is highly competitive with low barriers to entry, so the next champion will have to have the speed of Usain Bolt, the strength of Teddy Riner and the endurance of Eliud Kipchoge to take home gold.
[1] Mordor Intelligence — “Sports Nutrition Market Size”
Beyond the big bag of protein: differentiation through innovation
Top of mind when thinking about sports nutrition are sports drinks, protein bars, and the famous big bags of (whey) protein.[2]. Trends like convenience, functionality and the popularity of protein, are top drivers of consumer interest[3].
Challenger brands need to tap into these trends and at the same time try to differentiate through innovation, for example by offering new formats (think gels to consume on the go, RTD coffee with protein), and ingredients. Protein still leads the way, but others like caffeine, creatine and electrolytes are on the rise: 2023 saw a 17% increase in collagen brands, and a 12% increase in the number of available clear whey protein products. Bonus points: clean label products and low sugar content. Incorporating these elements not only leads to a more distinguished product portfolio, but also helps to increase consumption moments beyond the ‘before and after’ sports (think breakfast and afternoon snacking), further increasing the revenue potential per customer and the TAM.
[2] NutraIngredients — “Protein Powder launches continue to grow while Bars hit saturation point”
[3] Prinova Global — “State of Play: New insights into the changing sports nutrition market”
The Holy Trinity of DTC: enabling a sprint from the start
Sports Nutrition challenger brands stand to gain from the sector’s DTC potential, exemplified by the dominance of UK giant MyProtein, which generated £660m in sales in 2023. Gross margins tend to be high due to the ability to fetch a premium price, and regular consumption (60% of UK consumers use some type of Sports Nutrition products on a weekly basis) leads to frequent repeat orders. Lastly, thanks to a premium price point and smart bundling, high average order values (AOV) are easy to obtain. These three elements form the ‘holy trinity’, or the cornerstones for successful DTC models. Starting a DTC Brand leads to better relationships with customers, faster ability to scale sales, quicker and more accurate new product development, better margins, etc. And before having to knock on retailers’ door, there is still Amazon as sales platform, which represents ~25% of online Sports Nutrition sales in the UK[4].
[4] Euromonitor — “The changing landscape for Sports Nutrition retailing in Western Europe”
Messi’s Màs+ and Climbers on CLIF Bars: athlete endorsement and communities
In addition to solid fundamentals, sports nutrition brands have access to an array of athletes, influencers and other sports-related social media to build their brand and generate traction on online channels. Recent launches in Hydration by the likes of Lionel Messi (Màs+) or Youtuber Logan Paul (Prime) exemplify the level of star power and exposure that can be generated for Sports Nutrition products. On top of that, passion for sports helps build tight-knit communities that can easily travel beyond borders because consumers tend to have similar lifestyles and health goals, and are active on the same social media channels. Community-first brands, CLIF in Climbing, or BodyArmor in Basketball, leveraged the power of these networks which create credibility, (free) word of mouth promotion and a strong repeat customer base (=cash!), before tackling the mass market audience.
Due to the elements mentioned above, at Five Seasons Ventures, we are excited about the opportunities in this category, but haven’t found our Olympic Champion challenger brand just yet. If you believe your company is the one that will become the category champion, we want to hear from you!
