No-Moat Glanbia Expects Solid Operating Performance to Continue in 2024

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. However, its cheese operations 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.