On April 26, Designer Protein announced its purchase of several operating assets of sports nutrition company NEXT Protein, including its popular Designer Whey brand of protein products. Three private equity firms—GarMark Partners, Northwood Ventures and Stockton Road Capital—financed the acquisition, creating a new company in the process—Athena Wellness Brands—of which Designer Protein is a subsidiary.
Other brands acquired include Aria women’s protein products and a line of Designer Whey weight management mixes co-opting the trademarked Biggest Loser reality show from NBC. The majority of NEXT Protein’s staff and management will join the new company, though NEXT still maintains assets it will continue to develop and market.
The deal is part of a recent raft of private equity investments in the sports nutrition space, as the market has experienced a flurry of mergers and acquisitions over the past year. In January 2011, TA Associates invested an undisclosed amount in Dymatize, and Maximum Human Performance received equity investments from Star Avenue Capital and Stockton Road.
“A good validation of the overall health of sports nutrition is the ramp up in private-equity interest,” Brian Smith, partner at PCG Advisors, told Nutrition Business Journal in the reporting for its February Sports Nutrition & Weight Loss issue. “The category attracts a lot of investors.” PCG has advised many recent deals in the sports nutrition market, including the Designer Whey acquisition.
According to Cyrill Siewart, new CEO and chairman of Designer Protein, Designer Whey was attractive from an acquisition standpoint because it’s the premier protein powder on the market. “Designer Whey has a well-established market position, has very high quality—both from a protein perspective and an aesthetic point of view—and we feel that it has been under-marketed for a very long time,” Siewart told NBJ.
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“Under-marketed” may seem like a misnomer considering Designer Whey’s longtime affiliation with The Biggest Loser. But Siewart sees weight management (the designation under which Biggest Loser products fall) as a category apart from sports nutrition (the heading for straight Designer Whey proteins) in the minds of retailers and consumers. While Biggest Loser products already have purchase in the mainstream, Designer Protein is now looking to put marketing dollars behind Designer Whey as it transitions from specialty retail into mass.
Designer Protein has a distinct growth advantage as well because its product lines are well-established in the elusive but growing women’s sports nutrition market. Young professionals and active mothers are both on the lookout for nutrition products to fit their lifestyles, and Designer Whey targets the market appeal of protein at that demographic.
Targeted branding appears to be a focus for Designer Protein going forward. “Sports nutrition is in the process of segmenting,” said Siewart. “Be it male or female, hardcore or mainstream, pre-workout versus post-workout, physique versus performance, the category is splitting. The future of Designer Protein is to focus its brands on certain user populations.”
Siewart is no stranger to building strong brands. He was previously CEO of Amerifit Brands, a portfolio of popular, individualized supplement lines—including Estroven, AZO, Culturelle and BrainStrong—that was recently purchased by ingredient manufacturer Martek. Siewart said he plans to move into a bigger leadership role in Designer Protein’s parent company Athena once the company is firmly grounded, and look to be acquisitive in the wellness space.