Cheaper protein shakes are crushing this industry stalwart

By Bill Peters Shares of BellRing Brands, the maker of Premier Protein drinks and PowerBar snacks, are tumbling more than 40% Shares of BellRing are down more than 84% over the past 12 months. Consumers have stampeded toward protein, and food-industry giants are chasing them with new product innovations. But not all companies are realizing the same benefits. In what could be a sign of tougher things to come for the protein craze, shares of BellRing Brands (BRBR) - the maker of Premier Protein drinks, PowerBar snack bars and Dymatize protein powder - were falling more than 42% on Tuesday, after a concoction of higher costs and competitive price cuts hit its quarterly results and outlook and led to the first slowdown in purchasing trends in several years. The backdrop overall, BellRing CEO Darcy Davenport said during the company's earnings call, "reflects an increasingly value-focused consumer with greater reliance on promotions, low-price brands and value-priced pack sizes." While Davenport expects those trends to continue through the company's fiscal year, which runs through September, its sales still increased during its second quarter. And she noted that protein was "highly relevant to both consumers and retailers," with more room for growth. The remarks come as food companies like PepsiCo (PEP) and Hershey (HSY) and chains like Starbucks (SBUX) are finding ways to pack more protein into drinks and snacks. Inflation-weary consumers, meanwhile, continue to seek out deals while leaving room for spending on health and, increasingly, things like GLP-1 drugs. Shares of BellRing were down more than 84% over the past 12 months and dwelling at record lows, after hitting peaks in 2024 and 2025. Davenport said Tuesday that amid the clamor for protein products, the effects of higher costs for ingredients would start to show up in the second half of the year. The CEO added that BellRing is making a deliberate choice to spend more on promotional sales and advertising to defend its market share. She said that at the beginning of the year, protein shakes were growing rapidly, thanks to an increased focus on wellness. But that growth attracted competition; retailers expanded their shelf space, particularly at club chains, which account for more than 40% of BellRing's sales, she noted. During the first quarter, rivals started cutting prices - a trend the company expected. But the changes that came after, Davenport said, were more pronounced as the swarm from smaller competitors increased. "This quarter, however, we saw a more pronounced push year, including higher levels of trade-down and a greater response to promoted price," she said. More sales volumes were driven by lower prices, she added. However, more people were still consuming protein shakes, with little evidence they were switching to other protein-boosted beverages or snacks, according to Davenport. In recent months, the company had seen a dip in household spending on ready-to-drink shakes, "marking the first decline in buy rate in five years," she said. Given the rise in production costs, she said other shake makers could raise their prices. The conflict in the Middle East also pushed the company's freight costs higher. BellRing cut its fiscal-year sales outlook on Tuesday to a range of $2.325 billion to $2.365 billion, from a prior forecast of $2.41 billion to $2.46 billion. BellRing's reported fiscal second-quarter sales of $598.7 million, up 2% year over year. The company reported adjusted earnings per share of 14 cents. Both were below Wall Street analysts' estimates. -Bill Peters This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 05-05-26 1342ET