Glanbia is betting on a ‘Keurig’-like device for sports nutrition
Under the agreement, Glanbia will launch products of some of its well-known sports nutrition brands in the Güdpod ‘pod’ format, with plans to expand this format to Glanbia’s other wellness brands like Amazing Grass and thinkThin.
The deal is a huge step for the start-up Güdpod, which launched in 2016, as Glanbia-branded pods will be the first to launch to market for the platform. During the past two years, Güdpod explored partnerships with ingredient suppliers as a 'beta' run, Ochoa said, though none of them resulted in a marketable product. Güdpod and Glanbia are currently searching for retail partners.
Glanbia’s brands are well known in the sports nutrition space and increasingly ubiquitous among mass market consumers as it penetrates the convenience store channel.
“This is as good as if Keurig, when they first got started, launched with Starbucks. It wasn’t until around 15 years after Keurig launched that Starbucks started putting their coffee in [Keurig’s] pods,” Gian-Carlo Ochoa, founder and executive chairman of Güdpod Corp. told us.
Market analysts credited Starbucks’ partnership with Keurig as what made the latter a top contender in the premium coffee market. In a 2011 blog post, an analyst from market research firm Euromonitor called it the ‘jewel that Green Mountain needed,’ referring to Keurig’s then parent company Green Mountain Coffee. As of July this year it has merged with a soda giant to become Keurig Dr Pepper.
Because of the recognition that Glanbia’s brands have, “It’s a big deal for us to have Glanbia come out the gate with us,” Ochoa added.
Why get a new device if you can just shake it in a bottle?
How the machine works: Once the pod is inserted, a cup filled with a liquid of choice in placed into the machine. With the press a button, a blending hub extends out of the bottom of the pod and the contents of the pod spill into and are mixed into the liquid. If the Keurig and similar devices like Nespresso are brewers in a pod, then the Güdpod is a blender in a pod.
This process allows for zero to no clean-up, as the only thing that gets dirty is the cup used to drink, the company said.
If it seems like getting a whole new device to make a protein shake is much more complicated than just putting scoops into a shaker bottle, Ochoa had many points to refute this.
“When buying a tub of protein, you’re stuck with one flavor,” he said. “With our offering, you can get the same product with a variety of flavors.”
Additionally, storing pods will take up less space than large tubs of protein powder, and as there are plans to launch different supplements in the format (BCAAs, creatine powder, and more), this means consumers can avoid storing multiple large containers.
Compared to the ready-to-drink liquid supplement segment, the pod format is more affordable and also saves space in fridges or pantry cabinets, he added.
Glanbia’s powders flat or declining
David Strickland, COO at Glanbia, told us that his company is betting on Güdpod because there’s traction in countertop, do-it-yourself technology. SodaStream, recently acquired by PepsiCo, saw a 31% year-over-year sales increase this year.
Single-serve pods, despite persistent criticism of the amount of waste it generates, continues to grow. For coffee specifically, single-serve pods generated $3.8 billion in 2017, up from $3.7 billion in 2016, winning the crown for highest sales growth within the coffee category, Statista reported.
A partnership with Güdpod could counter flat to declining powder sales, Strickland said. According to the company’s half-year results, revenue growth for Glanbia Performance Nutrition was down 4.4%, and EBITA was down by 16.4%.
“The growth in our ready-to-eat and ready-to-drink has been tremendous over the last two years, and powder has actually gotten flat to decline within some of our core customers. So the opportunity for us with Güdpod is to expand distribution and new consumer acquisition,” Strickland added.