GNC CEO, Michael Costello, joins Cheddar to discuss how the wellness business is evolving and what offerings they have similar to GLP-1 drugs. Watch!
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00:00Is GNC, like many of their customers, beefing up, getting stronger after declaring bankruptcy
00:07in 2020 and closing more than 1,000 stores?
00:11And how has the Ozempic craze impacted the nearly 90-year-old retail and nutritional
00:17manufacturing giant?
00:19Well, let's ask their new CEO, Michael Costello, joining us now.
00:23Michael, good to see you, sir.
00:24Hope you had a great weekend.
00:26How healthy is your health-focused company?
00:31I think we're doing really well, Dave.
00:34As you just, in your introduction, you talked about GLP-1, but more importantly, we're focused
00:40on bringing trusted health solutions for consumers.
00:45And especially after COVID, many, many people are turning back to their health and understanding
00:51how important health is to them.
00:54And it's a confusing categories out there.
00:56What do you trust?
00:57What should you take?
00:59And GNC is uniquely positioned to be that trusted advisor for you.
01:03Yeah, that's an interesting point, because just about every business on the planet, every
01:07industry has evolved from COVID.
01:10And you factor in the Chapter 11 as well.
01:13How has GNC evolved from COVID?
01:15And how have customers, most importantly, changed?
01:19So Dave, I was a customer of GNC in the 90s.
01:23I bought my creatine there.
01:24I bought my protein powders.
01:26That was a spot where, if you really wanted some of those products, they were only available
01:30at GNC.
01:31And GNC has grown through that time period to really introduce a lot of these new products
01:36that more and more are getting increased scientific backing.
01:41But we've seen in the world that a lot of these products have moved over to some of
01:45the big box, the Walmarts, the Costcos, the Amazons of the world.
01:50But as much as the products have moved there, what GNC is really focusing on is making sure
01:55we get the right education for consumers.
01:57So you come in, you have a lifestyle question.
02:00What people don't realize is when people say, oh, I want to take more protein, well, what
02:06do you want more protein for?
02:07Do you want protein to gain mass?
02:09Are you looking to lose weight?
02:10Are you looking to just keep an increased protein usage because of your total macros
02:15you're driving?
02:16Do you want to take your protein at night so you can sleep better?
02:18Do you want to take your proteins right before a workout?
02:21Those are all different types of proteins.
02:22And that's one of our easier categories.
02:24So the idea of coming in, our coaches are trained to ask lifestyle questions.
02:30We're spending a lot more time over the last year shutting down stores, doing role play,
02:36putting more education out there so that our coaches are ready to help you in your journey.
02:41A lot to unpack there.
02:43Are you more focused on brick and mortar strategy or simply direct to consumer?
02:49We're both.
02:51You can find us online, gnc.com, Amazon, we're in other marketplaces.
02:58We have obviously the stores you've talked about, over 2,400 stores around there.
03:03And we're on TikTok, selling on TikTok and on TikTok shop.
03:08So our point is to meet the consumer where they need to and provide that information
03:13that helps them make the best decision.
03:15And that's key in what you're trying to do here, trust, because the market has been flooded
03:19with thousands, if not millions of different supplements.
03:22Now, clearly you'd like people to go to GNC because they can trust your products.
03:27But what is your advice to the consumer out there that gets inundated with Instagrams
03:32and TikToks and emails and all sorts of pop-up ads about different nutritional supplements
03:38making outlandish promises?
03:42Well, this is, you know, this category is very interesting in terms of bifurcation of
03:47it.
03:48If you think about it, the science on supplements has gotten stronger and stronger year by year.
03:53And the amount of clinical studies out there showing how supplements really help you is
03:57amazing.
03:58There's a clinical study out there that shows you have two years more mental acuity if you
04:03take multivitamins every day.
04:05Or the fact that with a leucine protein like we sell, Wabolic, you can add 17% to your
04:10strength.
04:11But as you said, there's a lot of things on TikTok or other mediums where you see people
04:16claiming you lose 20 years of age.
04:19You know, I wish that was true.
04:20I'd be taking it if that was possible.
04:23But we know that there's definitely positive scientific benefits here, but people really
04:28blow them up too big.
04:29You have to find the trusted resource.
04:31And now I'd like it to be GNC, but of course, there are other ones out there.
04:36You can go out and do the research.
04:37You can read the different clinical studies.
04:39Or you can trust us with our 15 master and above-degree nutritionists who help us figure
04:47out all of, you know, sift through all that and provide the right information to our coaches.
04:52Yeah.
04:53In particular, trust is difficult.
04:55With the before and after pics, we see many altered by AI these days.
04:59But I want to talk Ozempic.
05:00GLP-1s have changed our country, perhaps our world eventually.
05:05How have they changed your industry?
05:07How are you catering to it?
05:09Well, it's very interesting because, as you know, we launched a GLP-1 set within our stores.
05:16And we've actually increased that more to become a whole weight management set.
05:20Because as consumers are looking for Ozempic or other GLP-1 antagonists, they're through
05:29a journey.
05:30And many times, it's been tough, right?
05:32Any of us have tried to lose weight.
05:35It's harder and harder as you age.
05:36It's harder and harder as you put some of those pounds on.
05:40And so, the ability to kind of do this reset, I think, is a remarkable transformation for
05:44people's health, whether it be heart health, diabetes, other things, and, of course, looking
05:49better.
05:50The problem is that a lot of people leave GLP-1s in the first few months because the
05:55side effects are real, side effects of digestive issues, the side effects of some of the additional
06:01muscle loss.
06:03And so, what we said, why I put a GLP-1 wall out there was, we know what all the side effects
06:08are.
06:09We're not going to sell you GLP-1s.
06:10We're going to be an objective third-party resource to come in and talk to about what
06:15are all your side effects and how can we help you.
06:18But then, we have also expanded the wall for those folks like me.
06:23I'm lucky that I'm still trying to lose that last 12 pounds.
06:27We have Glucotrim, which is a product that's been clinically studied to help you lose 12
06:32pounds.
06:33You can take that, or especially if you come off GLP-1s and people are trying to maintain
06:37a healthy lifestyle.
06:38We can talk to you about the right proteins and shakes to take to really help you maintain
06:45that weight loss.
06:46So, for us, we think about it as weight management.
06:49The beautiful thing is, I think, as we meet these consumer needs, the right way for business
06:54is if we meet what the consumer is looking for, they'll reward us in business, and we're
06:58seeing that in the weight management category.
07:00Overall, I can't tell if it's concerning or if it's a positive trend, but JP Morgan estimates
07:06more than 30 million Americans will be on GLPs by 2030.
07:10That's 9% of our population.
07:13Does that concern you?
07:15No.
07:16In fact, I've seen numbers that go up to 70 million, so the ranges are out there.
07:23I think if done responsibly and treated in terms of those folks who are on GLP-1s, many
07:32times the health impact they have, the reset for this, can change your life.
07:39If you're significantly overweight and you have risk of heart attacks, risk of diabetes,
07:44risk of other morbidities, the fact is you can use the GLP-1, and then we can help you
07:50really manage the side effects.
07:53You can get to your target weight, and hopefully you've made the lifestyle changes and been
07:58coached to make the lifestyle changes so you can keep that going over time.
08:02Maybe this answer is related to the ozempic impact, but what are the most popular supplements
08:07you're selling right now?
08:10One of our biggest wins so far actually has been Glucotrim and Slimpants, which is two
08:15of our more natural ways to lose weight.
08:19We've seen this in other situations where the pharmaceutical companies will be selling
08:23GLP-1s, and that's definitely for a subset of the population.
08:27That's the right thing for them to take.
08:30But for others who might just be trying to lose that last 12 pounds, Slimpants and Glucotrim
08:35are products that have the clinical studies that show how you can lose weight.
08:40As I've been taking, I've lost eight.
08:42I'm still trying to get the other four, but the goal there is for those people who may
08:49not want to do the full GLP-1 but still are looking to, as they see all the advertising
08:53out there, say, hey, I want to get myself a little bit healthier.
08:56How about Amazon?
08:58How major has the impact been on the industry and on your business as well?
09:02Yeah.
09:03As I said, we sell on Amazon.
09:07We all know it's convenient.
09:08That two-day shipping, they get right to my door, is always nice for many different things.
09:14We have a good Amazon business.
09:17I think the trick, like Amazon or any marketplace, is you have to be careful to really make sure
09:24you get the branded products.
09:27There are plenty of really good, strong brands on Amazon, ours as well as many of our competitors.
09:34There's also a lot of brands out there that you've probably never seen before and really
09:38are just selling products that you may not be able to trust.
09:44There's some research out there that shows that's a channel that Amazon's trying to really
09:51work hard to make it clearer in terms of what's there and what's not.
09:56My advice to anybody on Amazon is make sure you go for some of the branded products.
10:01Excellent advice.
10:02New GNC CEO, Michael Costello.
10:05He's lost the first date.
10:06He's going to lose that final four.
10:09Best of luck to you, sir.
10:10Thanks for joining us here on Shedder.