Member Info for Yorek

The Grocer has printed this article today entitled “Tesco demands suppliers make healthy products more affordable”:

https://www.thegrocer.co.uk/tesco/tesco-demands-suppliers-make-healthy-products-more-affordable/681347.article#:~:text=Tesco%20has%20made%20the%20HFSS,to%20make%20healthy%20food%20cheaper.

It’s behind a paywall, but essentially says that Tesco is encouraging suppliers to set reformulation targets, in line with the Tesco pledge for 65% of its sales to be ‘healthy’ by 2025. This is the commitment referenced by Kelso in their last RNS ref THG investment.

One paragraph says that a Management Consultant believes that “Tesco was now ready to begin using health as a reason to delist suppliers who failed to make their non-HFSS products cheaper”.

Very interesting, when MyProtein non-HFSS products are 3 for £10 already….

Personally, I wouldn’t produce under own label. I would ask Sue Farr and Helen Jones for a bit of assistance with marketing and consumer engagement, as I feel that at this time, we have something special, so I wouldn’t share….

The non-HFSS appeal is simple.

HFSS regulations will restrict the sale of products in volume promotions (eg. 3 for 2) and promotions in areas of a store with high foot fall e.g. end of aisles. These areas are the most coveted in store.

So non-HFSS products will be unrestricted.

Simples 😊

https://www.acs.org.uk/advice/hfss-regulations#:~:text=b)%20to%20restrict%20the%20placement,into%20force%20in%20October%202022).

Imagine if Tesco sold MyProtein crumpets, low calorie, low sat fat and high fibre and protein….but without even noticing there’s a difference to the standard product. Fantastic!

I think there’s much more potential for the Myprotein products than WW, because it’s clear that they have not just focused on the protein content. They have focused on all aspects critical to a “healthy” product (low calories, low saturated fat, good fibre and protein). This means that this range is about “wellness” not weight loss or muscle building.

The challenge will be communicating all of their wellness benefits to the retailer and consumer, when you have a brand called “Myprotein”, but with such branding/marketing experts now at the top, I’m sure they’ll find a way….

Apologies up front if this stuff only interests me….but for those interested in the heath score of the total Iceland Myprotein range (I did the ice cream last week), I ran all the products through my calculator and every product scores between zero and minus 7.

NB: “healthy” is below 4

Again, this is what will interest “big food”, especially if they are expecting to take a £30m share, in the first year, in 1 retailer, which is what Kelso keep referencing.

Great trading update today from Premier Foods, where Helen Jones is also a NED:

https://www.premierfoods.co.uk/CorporateSite/media/documents/investors/results/2023-24/Premier-Foods-2023_24-Q1-Trading-Update-20-July-2023-Final.pdf

Premier service lots of food categories, are co-manufacturers and are global, so plenty of opportunities for Myprotein.

I’m wondering if the trolls are not awake yet. They seemed very active after our trading day ended….

“Ocado Group CEO Tim Steiner has said the grocery sector is “back on a trajectory where we’re going to see continual channel shift towards online”. He said that this “long term, structural and inevitable” shift would occur as consumers “want to do better things with their lives than spend their time driving to supermarkets and walking the shelves”. It’s also the improvement in the proposition, the service and the pricing that online can offer.””

I worry about the liquidity of Kelso shares, as I’ve been bitten before. I’m also struggling to engage with their narrative…

Thanks to an explanation of a reverse takeover from someone on here, I now understand the principle, but I don’t understand why they would ramp the price of a division that they had in their sights. I wouldn’t at all be surprised to see that clause actioned on THG Beauty, drawing in Revolution Beauty too, as Goold is now a NED for BOO and the aggressive stance on Revb coincided with his arrival I feel.

I’m usually wrong in matters like this. But I’m always wrong when I invest in things I don’t understand, so I’ll probably miss out big time, but I’d rather invest here.

Good luck to all Kelso holders though; I genuinely hope you do well.

Feels like the same games we’ve seen for over a week. It tends to stabilise after 9am.

I’m not selling either. It’s been a long and sleep deprived road and I’m resolved to staying put until we see fair value, one way or another. Thankfully we’re finally passed my average so I’m feeling more comfortable.

Good luck everyone.

Short declarations unchanged up to yesterdays date (17/7)

Bernstein have said that they are bullish on Ocado because of “Tech Differentiation”, so I’m sure some of the halo effect will reach THG….although the legal challenges from Autostore about patent infringement, have yet to be completely put to bed it seems, as Autostore are going to appeal.

It feels like the Autostore/THG partnership has more potential, but I guess time will tell.

MyP is relocating to THG Studios, so no additional rent

There’s a post on LinkedIn about MyProtein moving HQ location. One of the pictures shows the wall graphics depicting the evolution of MyProtein with the yearly milestones…and for 2023 it says:

“Brand evolution. Broadening our appeal”

Think we can safely say they’re on track with that one.

“ Nothing concrete I can share. But after all this turbulence I think it's time to sit back, relax and enjoy the flight. 🛫”

Thanks ihavenoclue, as I’ve never tried Halo Top

Just to add to the potential of protein water, Buxton were joined in the top 100 brands by Volvic, Evian & Highland Spring.

In the Grocer article, sales in 2022 are declared as:

Buxton £139.7m (up 53.1%)

Volvic £180.7m (up 11.8%)

Evian £176m (up 15.8%)

Highland Spring £153.5m (up 25.3%)

This is just the top brands, but demonstrates that bottled water is in serious growth ..

OSG - thanks for that context

I believe the price points of this entire range will be the most compelling.

Currently Industry is trying to retrofit health into existing ranges, due largely to retailer targets for healthy sales. But the cost of removing the negative nutrients (energy, fat, sat fat, salt) and replacing them with ingredients that move your healthy product score in a positive direction, is huge. Even slight changes erode margin of volume lines.

If you develop healthy products from scratch, like MyProtein are doing, it’s a lot easier and faster.

They clearly targeted cost and flavour as barriers to entry, which is exactly the right strategy.

Many of the retailers have ambitions to ensure that a healthier product variant is not more expensive than its unhealthier equivalent…..but this is hard to achieve as the core products are ranged in more stores currently and therefore manufacturers get better economies of scale etc.