Can The New Owners Of Slimfast Revitalise The Brand?

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Remember SlimFast? Founded successful 1977, nan SlimFast portfolio features repast replacement shakes, bars and snacks, on pinch targeted weight-loss plans.

For a agelong time, it was a monolithic deal, and nan go-to for anyone who wanted to suffer weight accelerated and easy.

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But these days, nan marque is simply a protector of its erstwhile itself, its diminution is simply a classical communicative of changing tastes and a marketplace that near it behind.

SlimFast has changed hands a fewer times complete nan past 25 years – and for ever-decreasing amounts of cash. Unilever paid $2.4bn for SlimFast successful 2000 earlier trading nan institution to private-equity patient Kainos Capital for an undisclosed sum successful 2014.

Four years later, Ireland-based nutrient and ingredients group Glanbia acquired nan marque for $350m successful 2018.

Split down nan middle

The SlimFast business has conscionable been sold disconnected successful 2 halves.

This week, London-based FMCG group Supreme announced a deal to bargain nan authorities to SlimFast successful nan UK and Europe for astir £27m ($36.2m).

That transaction came a period aft Heartland Food Products – nan US institution down Splenda sweeteners – acquired nan rights successful North America for an undisclosed sum.

Ivan Torossian, a consulting head astatine GlobalData, Just Food‘s parent, says: “I deliberation that from a strategical position nan split‐deal makes sense.

“We are seeing respective splits successful CPG but this will beryllium absorbing from an execution constituent of view. In North America, nan acquisition by Heartland is simply a logical fit, considering they already play successful reduced‐sugar/weight‐management adjacent spaces.

“On nan European side, Supreme paid a comparatively humble value for an iconic brand, which signals some nan worth of nan marque nickname and nan sizeable situation ahead.”

However, Torossian says nan divided “will present complexity and risk”, adding: “Think astir really difficult nan coordination will person to be, nan consistency of positioning, fixed nan very different regulatory environments and user sentiment.”

The disposals underline really trends person moved on. Announcing nan waste to Heartland past month, Glanbia said SlimFast “performed powerfully successful its first years” but added “consumer behaviours astir weight loss” had changed since Covid-19 pinch much liking successful high-protein products.

UK owners Supreme, possibly unsurprisingly, believes SlimFast tin capitalise connected existent trends.

In its stock-exchange filing this week, nan institution said: “Supreme believes that SlimFast is ideally placed to capitalise connected nan increasing request for GLP-1 products, which require nutrition and macromolecule supplementation some during curen and arsenic an perfect “follow-on.”

Richard Wyborn, a partner astatine European food-and-drinks consultancy Food Strategy Associates, believes “both are awesome deals for their respective owners”. 

“In nan UK, it’s a awesome acquisition for Supreme CEO Sandy Chadha and I expect it to beryllium profitable from time one. He [Chadha] has powder accommodation that mean he tin in-source powder manufacturing from time 1 and a income and back-office organisation that intends he will request small to nary other overhead,” Wyborn says.

“Given nan spot of Supreme’s position into worth retailers and convenience and impulse stores, I expect him to beryllium capable to grow distribution for nan marque very quickly. Chadha has erstwhile of having done thing akin pinch Sci-Mx and will want to diversify astir from vaping fixed nan regulatory unit connected nan class so, yes, each information a very smart acquisition for nan business.”

“For Heartland it’s a spot different, nan US Slimfast business has been nether existent pressure, and I fishy location it’s much astir being capable to get a marque that is aligned pinch its extremity for a reasonable sum of money fixed nan standard of nan turnaround that is required.”

Old diets dice hard

The world of dieting has transformed since SlimFast first deed nan segment successful nan 1970s. What consumers are looking for successful position of wellness and nutrition has changed and those old-school, ultra-processed SlimFast shakes seemingly don’t person nan aforesaid entreaty anymore.

Consumers are progressively willing successful eating patient foods alternatively of relying connected synthetic repast replacements. As a result, location is overmuch much attraction connected sustainable manner changes, not conscionable speedy fixes.

Joshua Schall, proprietor of US marque consultancy J. Schall Consulting, says: “The astir difficult task will beryllium flipping nan humanities SlimFast marque messaging astir its repast replacement shakes from this antagonistic ‘restriction diet’ accent to a much positive, proactive convenient foundational nutrition focus.”

He continues: “Admittedly, Heartland Food Products Group wasn’t my predicted landing spot for SlimFast. But, while nan Heartland Food Products Group marque portfolio architecture is simply a spot wonky, SlimFast and Splenda arguably conjoin crossed 2 of nan biggest user needs (i.e. weight guidance and sweetener reduction) shaping nan early of nutrition.

“Heartland will apt grow nan SlimFast merchandise portfolio, believing nan reply tin beryllium recovered by delivering trusted solutions for each ‘nutritional gap’ opportunity arising wrong this caller era of weight management.

“But complete nan past decade, SlimFast has been chasing off-brand merchandise trends and that has unfortunately totally wrecked immoderate semblance of marque strategy and affectional relationship pinch consumers.”

Consumers want better-for-you snacks that fresh into engaged lives. I deliberation SlimFast’s practice marque gives them credibility to move into this space

Schall says consumers’ attack to weight guidance is “shifting distant from traditional, willpower-based dieting toward integrative and personalised wellness solutions”. He adds: “Slimfast cannot get caught up ‘trying to beryllium everything to everyone’ and must attraction on supporting nan wellness needs of its halfway customers.”

Renovation of products is needed, GlobalData’s Torossian argues. He thinks SlimFast should attraction connected “high-quality meal-replacement shakes/smoothies but upgrade, e.g. premium macromolecule (20g+), low/er sugar, cleanable explanation and amended flavours.”

He besides suggests nan caller owners return nan marque into on-the-go formats, specified arsenic snack bars because “convenience remains a beardown driver.”

Torossian adds: “Consumers want better-for-you snacks that fresh into engaged lives. I deliberation SlimFast’s practice marque gives them credibility to move into this space.”

GLP-1 – threat aliases opportunity?

In caller years, nan options unfastened to consumers to eat much healthily person exploded and SlimFast has struggled to support up.

The marketplace ranges from a action of competing macromolecule shakes and bars to apps that way your each meal.

The latest improvement has been nan preamble of GLP-1 weight-loss narcotics for illustration Wegovy and Ozempic. In 2023, SlimFast reportedly saw its income plummet by 33% acknowledgment to nan emergence of these drugs, according to Bloomberg.

Wyborn says nan UK and US weight guidance class will “absolutely beryllium nether pressure” from nan emergence of GLP-1 medications.

However, he adds: “The metallic lining successful an different very acheronian unreality for nan assemblage is that nan marque speaks to and has been bought by precisely those group who are adopting these medications.

“One effect of taking GLP-1 medications is nan request to support your musculus wide arsenic you suffer weight, so, if a marque for illustration Slimfast that already talks to these consumers tin successfully reposition astir protein, past it’s conceivable it could return to sustained maturation – nan mobility is whether they tin propulsion it off.”

In position of property demographic, Torossian believes that consumers aged 30-55 that are “seeking weight-management and metabolic health” tin coming an opportunity for SlimFast’s caller owners?

He says: “This is simply a large, somewhat underserved category. Many are past nan ‘fast weight loss’ mentality and now looking for sustainable, manageable solutions.

“That property group is besides dense connected consumers utilizing aliases willing successful GLP-1 drugs/metabolic‐health solutions… location is increasing crossover betwixt pharmaceutical weight guidance and nutrition support.”

Route to revitalisation

In nan end, it seems that for many, nan days of relying connected a simple, processed shingle to suffer weight are over.

Schall says “anything is possible” but argues nan “chance of getting backmost to nan heyday of SlimFast, some successful position of marketplace power aliases financially, would beryllium a statistical anomaly.”

However, location is still dream for nan SlimFast brand. Torossian believes nan caller owners tin revitalise nan marque but would return a “deliberate multipronged approach.”

He adds: “The marque is not going to person a revival simply by relaunching pinch nan aforesaid look and expecting past capacity to return… but location are levers they could pull.

“For example, merchandise innovation: caller formats, caller occasions. Think high-protein, low-sugar, clean-label; and depending connected nan marketplace possibly moreover DTC bundles that merge a level of coaching/community.

“Not to mention that both, Supreme and Heartland, should bring caller merchandise improvement to make nan marque consciousness modern again.”

Ultimately, he believes nan caller owners will request to “invest successful a refreshed marque communicative emphasising ‘sustainable weight-management’ alternatively than conscionable nan aged ‘shake and suffer weight fast’.”

“The overarching strategy should nexus nan marque to broader wellness trends. For example, nan increasing liking successful gut health, functional foods (protein, energy), and supporting nan lifestyles of GLP-1 supplier users.

“So, yes, they tin revitalise nan marque but only if they dainty it arsenic a turnaround alternatively than a quiet maintenance.”