Expert Interview: Toby Gordon-Smith on the state of the sports nutrition industry

Toby Gordon-Smith

I recently caught up with Toby Gordon-Smith who, for the last 8 years, has been the Strategy Director behind Glanbia’s growth in the Sports Nutrition sector across Europe, the Middle East and Africa.  He’s now an independent consultant offering the value of his vast experience to clients within the nutrition industry and more broadly across other consumer segments.  He’s been a regular at our Sports and Performance Nutrition conference and will be speaking at this year’s event.

Gerard Klein Essink (GKE): You must have seen a lot of change in the sports nutrition industry over the last decade.  What have been the most interesting developments you’ve witnessed?

TGS: Yes – a lot has changed.  My first impressions coming into the industry all those years ago was that this was a very niche industry with many brands holding on to a hardcore bodybuilding positioning; and the world of bodybuilding was very new and unusual to me. A few years in and I found myself emailing Glanbia’s senior athlete manager with a detailed critique of the muscle tone on a range of prospective Optimum Nutrition athletes – it was a fast learning curve.

In the late 2000s distribution was very limited and there was an often complicated network of distributors across Europe.  These tended to be run by entrepreneurial hobbyists who were very much into the category and started out looking to source products for themselves and their like-minded friends.  Roll forward to the late 2010s and the distribution landscape has changed significantly.  Some of the specialist distributors have become a lot more sophisticated and the category is no longer hiding away in hardcore gyms and specialist stores.  You can now find protein supplements in your local supermarket, pharmacy and convenience store.

But I think the biggest development in Europe has been how the internet became such a big part of the industry’s growth.  There has never been the same category infrastructure in Europe as there is in the US – we don’t have a Vitamin Shoppe or a GNC on every high street in Europe.  But the category has emerged into these markets in the internet age, and internet resellers have helped cut through where retail infrastructure has been lacking.  And now we have direct to consumer brands, such as My Protein and Bulk Powders.  This has proved to be a powerful model that on the one hand is able to offer better value for money to consumers by bypassing distributor and retail margin, and on the other hand unleashes the power of digital connectivity with consumers to drive retention though personalisation and great user experience.

I’ve recently been working for a client that has an office full of young professionals.  As you walk around the office you can see shaker cups stacked up in the kitchen areas and tubs of protein under people’s desks.  When I was one of these young professionals a couple of decades ago there were no tubs of protein under anyone’s desks.

GKE: What do you think are biggest challenges facing companies in sports nutrition today.

TGS: Reputation is becoming increasingly import, both for individual companies and the industry as a whole.  For individual companies this is key to optimising the value of the company – as part of my role at Glanbia I led the acquisition strategy for the EMEA region, so I have very real experience of how the value of a potential acquisition can fall off sharply when a reputational issue is uncovered in due diligence.  At an industry level, as the industry becomes more mainstream it will continue to attract more interest from food regulatory bodies across the world.  It is important for the industry to have strong representation as these developments take place and we will only be able to do so if we work hard to protect the reputation of the industry.  Remember that reputation is like a house of cards – it can take a long time to build, but only a short time to collapse.

There are still great growth opportunities with penetration continuing to grow as consumers across Europe are becoming more and more active and focused on their nutrition, but barriers to entry in sports nutrition are low.  This is evident by the number of new brands that appear every year at trade shows – it doesn’t take much to set up a new brand as the technology involved is not particularly sophisticated.  So the industry is becoming increasingly competitive and coupled with this, we are on a consolidation curve at the moment with industry buyers rolling up portfolios of brands and financial investors such as Private Equity funds showing increased interest in the category.  As this happens it is important for businesses and brands to maintain relevance with consumers and continue to stand out from the crowd.

GKE: What does the future hold for the industry and how can brands best position themselves for success?

TGS: There are still strong consumer trends that continue to give confidence in a growing industry for nutritional supplements.  Within sports nutrition, there are two models that I see having momentum at the moment.  The first being direct to consumer, which I mentioned before.  It’s an exciting combination of digital consumer connectivity mixed with value for money to consumers from a simplified and streamlined value chain.  The second is “ready to go”.  Brands offering supplements in convenient grab and go formats sold in gyms and convenience stores are seeing strong growth at the moment.

Outside of core sports nutrition I think there is a very exciting developing market for healthy snacking that some are calling active nutrition.  If you walked into a convenience store ten years ago looking for a snack, you’d have had to choose between sweet sugary confectionary bars or highly salted and deep fried crisps.  That environment is now transformed with much healthier options from brands such as Graze, Eat Natural, Primal Pantry to name but a few.  Whilst many of these products have a clean and natural positioning, the nutritional science behind what they are offering consumers should be very familiar to sports nutrition brands.  This is where brands like Grenade’s Carb Killa are enjoying a lot of success at the moment.

GKE: Now that you’re no longer with Glanbia, tell us about what you’re up to now.

TGS: I set up my own consulting practice earlier this year.  I have a real passion for helping businesses think through growth challenges and how to unlock potential.  I now have the opportunity to work with a range of clients both within sports nutrition and in the broader consumer goods sector.  I can give these clients access to first-hand experience of facing growth challenges as well as capabilities in strategy development and problem solving.  I also continue to support financial investors who are interested in these sectors.  I’m really enjoying the range of interesting challenges I’m able to work on now.

Anyone interested in further information on how Toby’s services could support your business can email info@tgs-ssl.com .