Glanbia Delivers Surprisingly Strong Half-Year Results as Consumers Are Not Deterred by High Prices

Despite its positioning in fast-growing segments, benefiting from secular trends around healthy lifestyle and wellness, we believe Glanbia’s products are largely commoditized and we assign the company a no-moat rating. From its humble beginnings as an Irish dairy cooperative, Glanbia has transformed over the past few decades into a global manufacturer of ingredients and sports nutrition, primarily by using whey, a byproduct of milk processing and cheese manufacturing. Acquisitions have served to further diversify the portfolio away from whey-based ingredients and products, with Glanbia also building a sizable position in vitamins and mineral premix, which we believe has contributed to the accelerated growth of the segment. Its cheese operations, however, either wholly owned or as joint ventures, still account for a large share of revenue and we believe constitute a distraction for management from the higher-value-added parts of the portfolio.