Glanbia’s sports nutrition unit a winner

Glanbia is still predominantly a dairy products company, but there is more to its future than milk and cheese.

Yesterday it revealed a stellar set of interim results, with revenue for the six months up 10 per cent to €1.3 billion. The cream on top was, however, not down to its its core dairy operations, but rather its fast-growing “performance nutrition” division.

The division, which produces a range of products such as bodybuilding supplements and sports nutrition bars, is the star of the Glanbia group and was the “key contributor” to the company’s improved financial performance over the six months.

Performance nutrition’s sales were up a whopping 17 per cent to €375 million, and the company said it would continue to be the “main driver of growth” in the future, with the US likely to be central to its strategy.

Glanbia has snapped up several large, successful operators in the sports nutrition market in recent years, mostly across the Atlantic, where there is no shortage of gym bunnies.

But with such opportunity comes risks. Companies operating in the US consumer health sector regularly have to run the gauntlet of rapacious law firms that target them for class-action lawsuits.

Glanbia is currently the subject of one such case, instigated by a Californian law firm that chemically analysed one of Glanbia’s bodybuilding products.

The tests allegedly show that a key ingredient was not present in the product as advertised.

Cue the lawsuit, which the legal firm claims could have “tens of thousands” of plaintiffs.

Glanbia has denied any wrongdoing.

It isn’t the first time Glanbia has been targeted for this type of lawsuit since it entered the US consumer health products market.

Indeed, the law firm in the bodybuilding case has three other cases outstanding against Glanbia, including some for alleged patent infringements.

The US might be the land of opportunity for Glanbia and its sports nutrition division. But it must also beware the legal landmines in that market.