That's a good point about Kroger. I don't think the Combat Crunch bars are doing nearly as well as people are suggesting on this board. Frankly, I don't think the company ever saw them as a game-changing product. I spoke with one of their senior retail executives, who mentioned the bars are doing better than they thought and have gained a much bigger footprint in GNC in the last quarter or two. However, if you look at revenues, they don't really seem to be moving the needle. They were launched in September 2014, but H1 2015 revenue is down $5 million, despite supposedly huge gains in distribution. If they're even bigger than they thought, and they thought they would be a major event, why no mention in the 10Q or conference calls?
Their retailer distribution is also consolidating around channels that don't carry (Costco) or have only recently begun carrying them (GNC). Maybe the GNC consolidation is being driven by Combat Crunch, but I think it's more likely driven by the new cooperation centered on the Core, Arnold and Fitmiss brands (getting their own little display area in a bunch of stores) announced in mid-2014. GNC also has the exclusive for the much-higher priced Black Series.
Finally, protein bars are also not a particularly high-margin product. According to NACS, producers only net about 40% of the retail price, which means MusclePharm is taking home about $1 on every bar (maybe the margins are higher online, but probably not more than 50%). That compares to 50%-ish on single-ingredient products, and up to 75% for pre-workouts and protein powders. I'd be surprised if they generated more than $4-$5 million off the bars in 2015. The category is also pretty consolidated in the US, and there are many more familiar brands in the mainstream channels they seem to be targeting (Cliff Builder, Muscle Milk, etc.), so I don't agree that the growth prospects are off the charts.
