Beer Marketer's Insights - BellRing Brands Scores Solid Q4 Volume Growth but Temporarily Spooks Investors with Tepid Q1 Outlook; Coffee House Enters 'Proffee' Space; More Indulgent Offerings on Way

Premier Protein marketer BellRing Brands delivered strong volume-driven fiscal Q4 2025 this morning while warning that the new fiscal year will get off to a slower start, in part due to one-time events, before strong growth resumes for rest of year. Along the way prexy/CEO Darcy Davenport sketched out robust innovation slate that includes pending launch of Coffee House protein coffee line and further explorations of altmilk entries after its first, using almondmilk, got off to a good start. BRBR also continues to take steps to move beyond multipack sales in the pharma aisle, winning more impulse placements with single bottles, tho DSD does not seem to be a consideration yet. The report prompted an early investor freakout today that sent shares skidding 16% before they entirely recouped their losses by end of trading. "Some exciting things going on," reported Davenport. A key club chain and several major food chains "are testing higher-traffic aisles to move the category. They're not moving the entire category. What they've decided to do is they're selecting the best-performing brands, the ones that have the most mainstream appeal, and they're moving those into these new higher-traffic sets," even as declining legacy brands "stay back in the pharmacy." New development "shows you where the category is going, and we as the #1 brand are going," she said, referring to Premier Protein's top share and highest household penetration and repeat rates.As she'd heralded in previous qtr, to better win new users not accustomed to shopping the diet/protein aisle, BellRing has recruited new broker to expand store-level coverage and launched an internal sales team focused on winning retail displays of singles as well as multipacks at entry price points. They've struck one appetizing deal: a partnership in late Q1 with a "major mass retailer" that will bring Premier placements across pharma and grocery including extensive displays and endcaps. That unidentified partner also will add to the set the new proffee line targeting incremental occasions, CEO said.Here&#39;s what the numbers looked like. Net sales in fiscal Q4 rose 16.6% to $648.2 mil on 19.2% volume gain slightly offset by 2.6% decline in price/mix as volume-generating promos took a bite. Core Premier Proteinline enjoyed 14.9% sales boost on 18.4% volume lift offset by 3.5% decrease in price/mix. Within that brand, the RTD shakes rose14.1% on 18.4% volume gain offset by 4.3% decrease in price/mix. Other key brand, performance-oriented Dymatize, scored 32.9% sales lift on strong volume growth, tho it also benefited in $8 mil of overseas purchasers' advance buying ahead of pricing actions. BellRing's adjusted gross margin narrowed to 29.7% from 35.9% on higher input costs, the promo activity and packaging redesign costs. It's taking pricing and seeking efficiencies to offset the higher inputs, some of them tariff-inspired. The Trumpian levies will exact about a 1.2-pt hit to gross margin, CFO Paul Rode said. Operating profit contracted 8.8% to $102.2 mil. For full year, net sales rose 16.1% to $2.3 bil. Operating income declined 7.8% to $357.4 milLots of threads to pursue from this morning's call with Davenport and Rode:Innovation: Coffee House 'Proffee,' Expanded Nondairy Line, Indulgent Flavors Much of new stuff is coming out of demand study that BRBR marketing team conducted to validate their product focus and identify white space oppties for 2026. Some of the ideas seemed rich enough that timetable was accelerated to late 2026 from early 2027 fiscal year. Among key moves has been first move into nondairy space. That first entry, using almondmilk, launched in Jun and so far has proved highly incremental, with nearly half of buyers new to brand. It's already #2 4-pk in nondairy set, with ad campaign due in current fiscal year. Then there's push to more indulgent flavor profiles, both with a specific line and with Caf&eacute; Latte flavor in core line. "It worked," Davenport said succinctly of that effort. So there will be more to come. Within that effort is new protein coffee entry due in mid-Dec, Coffee House, bringing 30 g protein coupled with caffeine equivalent of a cup of coffee. That will target sweeter palates with Caramel Macchiato and Mocha flavors. That will be significant effort targeting mass channel and ecomm and backed by paid media, influencer partnerships and in-store signage and sampling. And continuing to offer flavor variety remains a priority, just a few years after production squeeze caused triage situation where co suspended most flavors, recall.At time that rivals like Simply Good Foods' Quest brand have been building out extensive portfolios of non-bev offerings like bars and cookies, Davenport was asked if she has any plans to take similar steps after having earlier discontinued Power Bar line. Basic answer was no. That demand landscape study found plenty of growth avenues within bevs. "We love this category," she said. "We think it has a lot of opportunity. We have a great brand that we've learned can travel to heavier-trafficked aisles." She also reminded that BellRing plays in other categories not under its own brand but via licensing partners in segments like frozen pancakes and waffles, dry pancake mix and cereal. "We're actually expanding some of those, but we're doing it through licensing because we want this organization laser-focused on the biggest opportunity, which is RTD shakes and powders," she emphasized. Bars in particular, with their low entry barrier, holds no appeal for a return.Category Evolution Brings Segmentation Lately, analysts have detected higher promo activity at club stores and perhaps other channels by the growing ranks of insurgent protein brands, even as many players launch entries based on ultrafiltered milk employed by Premier's closest rival, Coca-Cola's Fairlife/Core Power platform. So Davenport was pressed to offer her take on how Premier navigates thru the noise. By her account, the two leaders together hold 50 share, another 30% is held by long-declining legacy brands (read that as Atkins among them) and 10% is the insurgents. Davenport said she doesn't see those legacy brands reversing their slide and believes it's inevitable that some of the new entrants will be shaken out as they fail to meet retailers' stiff velocity thresholds. So "we'll continue to see a rotation of different smaller brands bringing news but also coming in and out," much like in energy category, she indicated. This is all in robust protein category that retailers are giving more space, particularly in food/drug/mass, and opening up to greater segmentation. It still holds just 50% household penetration, she stressed. Davenport cited major club chain, likely Costco, that in late 2025 has expanded assortment, in manner she's assuming will continue into 2026.From her perspective, Premier's core 30 g shake plays in biggest segment with plenty of upside still to go. So it's dialing up advertising to continue to extend household reach, to tune of 4-5% of revenues, Rode indicated. A new campaign due next month, in time for shoppers' new year's resolutions, will include national TV with strong digital components. Taking eye off that ball is not an option, Darcy suggested. As for the ultrafiltered milk trend, she styled that a sign of the category's maturity as consumers get to choose between thicker conventional dairy shakes like Premier and thinner UF entries like Core Power, between dairy-based and altmilk-based entries. "Ultrafilterd milk is an innovation, thinner, more of a beverage, there's not that much interaction between the two," she said. "Our core 30-gram shake addresses the biggest consumer need but doesn't address every needAs we're now growing up, we're launching innovation to go after some of these other needs."In her extended bantering with analysts, Davenport stressed that they shouldn't underestimate the barrier fast-rising brands face in moving from their initial channel to broad availability. It took years for BellRing to achieve - only recently - a broad, scalable copacking network, and rivals will have to navigate that process as they start in club, then try to expand beyond it. "It is incredibly complicated," she said. "To move from one club customer to go national takes multiple years and it's another skill set." Self-manufacturing is no panacea either. Without naming names, she cited long time it's taking a "major competitor" to build out a national supply chain. That presumably was reference to Core Power, which has had customers on allocation as it scrambles to keep up with fast-building demand, with a massive new plant in western NY running behind schedule. Tho she didn't go there, it was not many years ago that BellRing was in the same situation.

BellRing Brands Scores Solid Q4 Volume Growth but Temporarily Spooks Investors with Tepid Q1 Outlook; Coffee House Enters 'Proffee' Space; More Indulgent Offerings on Way

Publishing Info