Sales of SlimFast plunged further in the three months to mid-July, prompting key US retailers to stock fewer of the meal replacement shakes, the brand's owner said on Wednesday as weight-loss drugs shake up the diet market.
Slimfast revenues in the United States fell 33% year-on-year in the most recently recorded three month period, a deterioration from the first quarter and the 17.9% drop sustained in 2022, SlimFast owner Glanbia said in it half year results.
The drop comes despite the Irish group's revamp of the almost 50-year-old brand earlier this year, including with new packaging, which it hoped would appeal to more consumers and gain track later this year.
"Despite brand investment and indeed, retailer support for the brand refresh, the diet category and the SlimFast brand has not regained the anticipated momentum," Siobhan Talbot, chief executive, Glanbia told an analyst call, estimating a 30% decline in sales for the full year.
"As a result, some key US retailers are reducing category shelf space in the short term, and this will reduce distribution for SlimFast into next year."
Talbot, who will be leaving at the end of the year after a decade in charge, estimated a 30% decline in sales for the full year.
Glanbia, which bought SlimFast for $350 million in 2018, has said weight management drugs have impacted the diet market, alongside a move during the COVID-19 pandemic away from low-carbohydrate diets that SlimFast products support.
More than half a dozen companies, from Pfizer Inc and Amgen Inc, are working on weight-loss therapies similar to Novo Nordisk's popular Wegovy drug, hoping for a slice of a market estimated to be worth as much as $100 billion by the end of the decade.
Glanbia shares rose 4.7% on Wednesday after strong margin growth in its much larger Optimum Nutrition protein powder brand led the nutrition supplement maker to upgrade its full-year guidance for the second time this year.
Glanbia now expects adjusted earnings per share (EPS) growth of between 12% and 15%, up from 7% to 11% previously.