Nestlé Expands in Vitamins With $5.75 Billion Nature's Bounty Deal -- Update
April 30 2021 - 11:23AM
Dow Jones News
By Nick Kostov
Nestlé SA has agreed to buy the main brands of vitamins maker
Bountiful Co. for $5.75 billion, in the Swiss food giant's latest
move to capitalize on growing demand for minerals and nutritional
supplements.
The world's biggest packaged-food company said Friday the deal
would add brands including Nature's Bounty, Solgar, Osteo Bi-Flex
and Puritan's Pride to its offering. The Wall Street Journal
reported last week that Nestlé was in talks to buy the company,
which is majority-owned by private-equity firm KKR & Co.
In recent years, consumer-goods giants have scrambled to add
health and wellness brands as shoppers spend more on self-care and
products meant to stave off sickness or slow aging.
Nestlé Chief Executive Mark Schneider was plucked by the company
in 2016 straight from the healthcare industry in part to accelerate
that push. Last year Mr. Schneider said he wanted Nestlé to become
"a health and nutrition powerhouse," in part through
acquisitions.
Shortly after he took the reins in 2017, Nestlé acquired
Canadian vitamin maker Atrium Innovations Inc. for $2.3 billion.
More recently, the company bought Aimmune Therapeutics Inc., a
biopharmaceutical business that has won approval for the first
treatment for peanut allergies, in a deal worth $2.6 billion.
At the same time, Mr. Schneider has worked to diversify Nestlé
away from slower-growing food and beverage products. In February,
the company sold most of its North American bottled-water business
for $4.3 billion, including brands like Poland Spring, Arrowhead
and Pure Life.
Nestlé said Friday's deal for most of Bountiful, which was
founded in 1971 and is based in Ronkonkoma, N.Y., would expand its
nutrition presence in the U.S. and offer opportunities for growth
elsewhere.
Nutrition products have been a particularly strong seller during
the pandemic. In the year to April 24, U.S. sales of vitamins and
supplements are up about 12% year-over-year to $11.24 billion,
according to data firm Nielsen.
The brands Nestlé is buying generated sales of $1.87 billion in
the year ended March 31, the company said.
The deal doesn't include Bountiful's sports and active nutrition
brands like Pure Protein, Body Fortress and Dr. Organic, which
Nestlé said didn't fit in its portfolio.
"Vitamins and supplements are a key part of our business and
have contributed to strong growth acceleration," said Greg Behar,
CEO of Nestlé's health science business.
Nestlé last week reported its best quarterly sales growth in
almost a decade, with the performance partly driven by the
company's Health Science unit, where organic sales rose almost
10%.
Nestlé said the growth was fueled by vitamins, minerals and
supplements that support health and the immune system and that
e-commerce sales in particular had grown strongly.
However, while nutrition products have become a greater area of
focus under Mr. Schneider, Nestlé's health science business only
accounted for about 4% of the company's overall first-quarter
sales.
The market for vitamins and supplements products is also
becoming more competitive as other big consumer-goods companies,
including Procter & Gamble Co. and Reckitt Benckiser Group PLC,
invest in the sector.
Earlier this week, Unilever PLC said it would buy
food-supplement brand Onnit, which partners with athletes and
medical professionals by incorporating their feedback on products
that range from stress-relief supplements to oil that supports
joint mobility.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
April 30, 2021 11:08 ET (15:08 GMT)
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