While everyone is focused on BellRing Brands' impressive growth, fueled by the insatiable demand for their Premier Protein shakes, a subtle detail in their recent earnings call reveals a hidden truth – their out-of-stock situation might be a much bigger deal than anyone realizes. This isn't just a temporary hiccup. It's a glimpse into the incredible, untapped potential of this brand that could be a goldmine for savvy investors.

Darcy Davenport, BellRing's CEO, revealed during the Q2 2024 earnings call that consumers aren't just passively accepting out-of-stocks. They're actively seeking out their favorite Premier Protein shakes, demonstrating a level of brand loyalty that's practically unheard of in the competitive beverage market. They're switching flavors, trying different pack sizes, and even shifting channels to find what they want.

Think about that for a second. Consumers are so devoted to this brand that they're going out of their way, putting in extra effort, just to get their hands on a Premier Protein shake. This isn't just brand preference; it's bordering on addiction.

Now, consider this: BellRing's household penetration is already at a staggering 18%. This means nearly one in five households in the US are already buying Premier Protein products. But what happens when they finally unlock their full production capacity and those out-of-stock situations become a thing of the past?

Imagine a scenario where every consumer who currently craves a Premier Protein shake can consistently find their favorite flavor on the shelf. What happens to that 18% penetration rate? 20%? 25%? The possibilities are mind-boggling.

Let's look at the numbers. If BellRing manages to increase their household penetration by just 5 percentage points, to 23%, that translates to an additional 6.5 million households buying their products. Assuming an average annual spend of just $50 per household (a conservative estimate considering the brand's premium positioning and high repeat purchase rate), that equates to a whopping $325 million in incremental revenue.

But that's just the beginning. As Darcy pointed out, the RTD shake category has a household penetration of 45%, while the broader convenient nutrition category sits at 75%. These numbers pale in comparison to mature categories like energy drinks, where the top players boast household penetration rates of 50%.

This begs the question: What's stopping BellRing from achieving similar dominance in the convenient nutrition space? They have a clear leader in Premier Protein, a brand with a loyal following, a diversified product portfolio, and a rapidly expanding production capacity.

The missing piece? Availability.

As BellRing continues to ramp up their production and improve their in-stock levels, their ability to meet consumer demand will become the key driver of their future growth. And judging by the consumer behavior they're seeing today, that growth could be absolutely explosive.

Here's the kicker: BellRing is about to execute a price increase on their shakes late in Q4. This might seem counterintuitive considering their supply constraints. However, it speaks to their pricing power and confidence in the brand's strength. They know that consumers are willing to pay a premium for Premier Protein, even in the face of competition and value-seeking behavior.

Projected Growth in Household Penetration

This chart illustrates BellRing's potential for future growth based on their stated goals and market comparisons.

This is a company sitting on a goldmine, and they're just beginning to unearth its potential. Investors who understand the significance of BellRing's out-of-stock situation, and their ability to overcome it, are poised to reap the rewards of a truly exceptional growth story.

"Fun Fact: BellRing Brands is a relatively young company, founded in 2019 as a spin-off from Post Holdings. Despite their short history, they've already established themselves as a major force in the convenient nutrition market, proving that they have the vision and execution capabilities to achieve long-term success."