Once known for household staples such as ice cream, pizza, bottled water and candy, Nestlé has undergone a major transformation in recent years in an effort to increase growth and focus its efforts on better-for-you foods as well as its health science business.
Nestlé has sold its U.S. confections and ice cream businesses in a pair of multibillion-dollar deals. And last year, it divested the majority of its struggling North American bottled waters business for $4.3 billion in a deal that will allow Nestlé to focus on international premium brands like Perrier and San Pellegrino, local natural mineral waters, healthy hydration products and functional water positioned for long-term profitable growth.
For Nestlé, the cash generated from these transactions has strengthened its balance sheet and given it plenty of fresh powder it could use for acquisitions and deals such as Orgain.
Nestlé CEO Mark Schneider is no stranger to the health space after previously working at German health-care giant Fresenius. The executive has pledged to transform Nestlé into a "powerhouse” in nutrition and health. During his tenure at Nestlé, he has moved aggressively to do just that.
He purchased a majority stake in Vital Proteins, a maker of collagen bars, beverages, capsules and powders; acquired personalized vitamin company Persona; added Atrium Innovations, a manufacturer of nutritional health products; bought Aimunne Therapeutics, a peanut allergy treatment provider; acquired hydration supplement maker Nuun; and snapped up nutritional supplement provider The Bountiful Co.
Even its food and beverage purchases have taken on a decidedly better-for-you twist. In 2020, Nestlé purchased Freshly, a provider of fresh-prepared meal delivery services in the U.S., and acquired Essentia, a maker of ionized alkaline water, a year later.
Through its latest deal with Orgain, Nestlé is deepening its presence in trendy categories popular with consumers who increasingly value clean, all-natural, plant-based, organic ingredients — the very same areas the 13-year-old Orgain focuses on with its portfolio of protein powders, shakes and bars. Its powders, in particular, also tap into keto, grass-fed and vegan categories. In addition, Orgain sells shakes and bars tailored for kids, which could be a useful way to get them into the brand as consumers early before moving on to other offerings as they get older.
"Nestlé Health Science and Orgain share the same philosophy: better nutrition can change lives," Abraham said in a statement. "We've worked hard to develop innovative products that make a real difference in consumers' lives, and now through Nestlé Health Science's capabilities, resources and dedication to nutrition, we will be able to reach more people around the world."
Foods today already have probiotics, vitamins, proteins and other healthy additives, but demand for functional products and new attributes are increasing. The ongoing pandemic has prompted people to focus more closely on what goes into their bodies, a shift that should only serve to increase demand for the brands in Nestlé's health and wellness portfolio.
A Nielsen report in 2019 found the majority of Americans aren't making healthy purchases as frequently as they want. This could provide a long runway for companies that can offer additives consumers can include in their own food and drinks or manufacture through products that come with them already incorporated.
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The beverage giant said new offerings attract younger consumers to its portfolio of brands before they transition into adult-targeted products like Coca-Cola Zero Sugar and Diet Coke.
The group dedicated June to educating consumers about the dangers of what it called “synbio dairy” — using genetically modified cells to create proteins identical to those in cow-produced milk.
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Topics covered: manufacturing, packaging, new products, R&D, and much more.
The beverage giant said new offerings attract younger consumers to its portfolio of brands before they transition into adult-targeted products like Coca-Cola Zero Sugar and Diet Coke.
The group dedicated June to educating consumers about the dangers of what it called “synbio dairy” — using genetically modified cells to create proteins identical to those in cow-produced milk.
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Topics covered: manufacturing, packaging, new products, R&D, and much more.