Minnesota-based SunOpta's latest flex: protein shakes

Eden Prairie-based SunOpta has long focused on plant-based milks, but a massive new plant in Texas has created new space to expand into the fast-growing world of ready-to-drink protein shakes.

A year before the company opened its $125 million Texas plant, one of the manufacturing lines had already been booked with a five-year contract to produce nutritional beverages for what company leaders called the industry's biggest brand.

"That speaks to just how under-supplied the category is," SunOpta CEO Joe Ennen said in an interview last month. "And it's a good tee-up for our entry into that category."

Ready-to-drink protein shakes packaged in on-the-go, personal-sized containers have seen big growth in recent years.

They are one element in SunOpta's plan to double revenue to $2 billion by the end of the decade.

"Nutrition beverages, we believe, is an absolute future growth driver for us for the next decade," Ennen said at an investor event in April.

SunOpta estimates there is a $5 billion market for nutrition drinks, and the company is aiming to slice off a $250 million piece of that pie. Consumer research firm Mordor Intelligence expects ready-to-drink protein beverages will see nearly 8% annual growth over the next five years.

BellRing Brands, which owns the market-leading Premier Protein, said earlier this week the brand grew sales 22% and saw volumes tick up 6% in its most recent quarter.

All of this is amid an inflationary environment. Many food and beverage categories are seeing sales gains through price increases, but watching volumes drop as some consumers limit their spending.

For SunOpta, partnering with a major brand to manufacture their product is just one way to get into the protein-shake business. The first saleable products rolled off the line on Monday.

Ennen said the company is also looking at private label and its own branded products, just as it does with plant-based milks — though as of now all of SunOpta's 330 ml production capacity is spoken for.

"Some of the biggest food companies in the world are behind the brands in this protein shake space," Ennen said.

After market close Wednesday, SunOpta reported a $1.3 million first-quarter profit on $223.8 million in revenue. Excluding the sale of the company's sunflower business, revenue was essentially flat compared to last year. Profits fell 70% but beat Wall Street expectations of a loss for the quarter.

The company maintained its outlook of about $1 billion in revenue for the year.