Simply Good Foods, the company behind the ubiquitous Quest and Atkins brands, is a quiet giant in the nutritional snacking world. While analysts dissect the competitive dynamics of protein shakes and the effectiveness of new advertising campaigns, a silent revolution is brewing within the company, one poised to unlock a massive, untapped market – the off-ramp for weight loss drugs.

The weight loss drug market, with blockbusters like Ozempic and Wegovy, is exploding. Projected to hit a staggering $1 trillion in value by 2030, it presents an unprecedented opportunity. But there's a catch – these drugs are not meant for long-term use. The challenge? Finding a sustainable way to maintain weight loss after stopping the medication. This is where Simply Good Foods steps in, quietly positioning itself as the ideal solution.

While the Q2 2024 earnings transcript focuses on expected gross margin improvement, innovation in new product categories like baked goods, and the revitalization of the Atkins brand, a subtle but critical shift is evident. The launch of "Atkins Strong," a high-protein shake with prebiotic fiber, is not merely a response to the growing demand for protein in the weight loss market. It's a calculated move to capture a specific segment – those transitioning off weight loss medications.

Consumers experiencing rapid weight loss, whether through medication, surgery, or even intense dieting, need high protein intake to preserve muscle mass. Atkins Strong, with its 30 grams of protein, directly addresses this need. Additionally, the inclusion of prebiotic fiber acknowledges the gut health issues often experienced by those on weight loss drugs, offering a unique advantage over many existing RTD shakes.

But the real masterstroke lies in Simply Good Foods' research and communication strategy. Their research indicates that the Atkins approach, with its focus on controlled carbohydrate intake, can be an effective "off-ramp" for those stopping medication. This positions Atkins not just as a companion during medication but as a crucial tool for long-term weight management.

This subtle shift in positioning is crucial. It allows Simply Good Foods to tap into the burgeoning weight loss drug market without directly competing with the pharmaceutical giants. Instead, they offer a complementary solution, addressing the often-overlooked challenge of maintaining weight loss once medication is stopped.

Projected Growth of Quest vs. Atkins

The following chart, based on the Q2 2024 earnings transcript, illustrates the projected retail takeaway growth of Simply Good Foods' two flagship brands.

The numbers speak for themselves. While Simply Good Foods projects a net sales increase of 4% to 6% for fiscal 2024, this figure doesn't fully capture the potential impact of their off-ramp strategy. Consider this:

- $1 trillion market: The projected value of the weight loss drug market by 2030.

- High discontinuation rates: Many users stop weight loss medications due to cost, side effects, or simply achieving their initial weight loss goals.

- Weight regain: A significant percentage of those who stop medication regain the lost weight, highlighting the need for a sustainable solution.

Simply Good Foods is strategically aligning itself to capture this massive wave of individuals seeking a long-term solution to weight management. This off-ramp strategy, while subtly presented in the transcript, could be a game-changer, propelling the company beyond its current projections and into a realm of unprecedented growth.

"Fun Fact: The Atkins diet, first introduced in the 1970s, was a cultural phenomenon, with millions adopting its low-carb approach. Now, with the rise of weight loss drugs and the focus on sustainability, Atkins has the potential to reclaim its position as a leader in the weight wellness movement."