Simply Good Foods has said it has “a lot to learn” regarding weight-loss drug GLP-1 but the US group sees sales opportunities for its brands Atkins and Quest.

As part of a “five-point revitalisation plan” for the protein and meal replacement bar brand Atkins, Simply Good Foods will target GLP-1 drug users, the US company said during an analysts call following its first-quarter results yesterday (4 January).

When asked if the business is focusing on aligning one brand towards GLP-1 use over the other, CEO Geoff Tanner, appointed last January, said: “We do know from our own research – but I think you’re seeing it from other research as well – that when consumers are on the drugs, their appetite is suppressed but they’re looking for smaller, more convenient, healthier, high-protein, low-sugar options.

“That’s where our category majors. In talking to consumers on the drugs, we certainly see an increased interest in products from Atkins and Quest. That’s why I do think our category is on the right side of these drugs. That’s why we’ve got out of the gate early. We’ve been able to identify these consumers on Atkins. We’re sending them targeted communication.”

Tanner added Simply Good Foods is set to invest an undisclosed amount into research to “better understand” the weight-loss drug.

The Atkins growth plan also includes “enhanced merchandising and assortment of select customers, new advertising supported with a reach-based media model, greater focus on a near and longer term robust innovation funnel, product upgrades on our bar portfolio and new packaging”.

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By GlobalData

Meanwhile, the Simply Good Foods chief executive said the business would “not explicitly” look at M&A to support the opportunities it sees from targeting the users of the GLP-1 drugs.

The Denver-based food and dieting company posted quarterly sales of $308.7m from $300.9m last year.

Simply Good Foods booked adjusted EBITDA of $62m for the quarter ended 25 November, compared with $60.8m in the same period a year ago.

The company said: “As expected, sales performance was driven by Quest volume growth which more than offset Atkins softness.”

Following a “good start to the year”, the group reaffirmed its full-year fiscal outlook, guiding investors to expect full-year net sales to increase at the high end of its long-term algorithm of 4% to 6%.

Adjusted EBITDA is expected to increase slightly above the net sales growth rate.

Analysts at William Blair wrote in a note to investors: “We are encouraged by the apparent open-ended growth opportunity for Quest and the potential for the revitalisation of Atkins.”