Four years after Nestlé spent more than $5bn to acquire a clutch of vitamins and supplements brands, some of the assets look set for disposal.
The world’s largest food company said today (24 July) that it is launching a “strategic review of our mainstream and value brands” within the vitamins, minerals and supplements (VMS) business.
Nestlé said the assets up for review include Nature’s Bounty, Osteo Bi-Flex and Puritan’s Pride, along with the private-label VMS business in the US.
In 2021, the company forked out $5.75bn to purchase those brands, and the own-label operations in the US, from The Bountiful Company. The deal struck with private-equity firm KKR also included Solgar.
Solgar is among the “premium” VMS brands that Nestlé said today will shape its focus, along with Garden of Life and Pure Encapsulations.
Nestlé made no mention on the future of the eight manufacturing facilities in the US that it acquired from Bountiful as part of the KKR transaction.
Bountiful was originally founded as Nature’s Bounty before it was rebranded in 2017. The acquired assets sit within Nestlé’s Health Science portfolio, which also houses the Atrium Innovations VMS assets bought in 2017 for $2.3bn.
“Our VMS business will focus on global premium brands, such as Garden of Life, Solgar and Pure Encapsulations where our capabilities in science, innovation and brand-building give us a distinct competitive edge,” Nestlé explained in its results announcement for the first half of fiscal 2025.
Reported sales for Nestlé Health Science dipped 0.4% to SFr3.2bn ($4bn) over the first six months of the year, although organic revenue was up 3.4%. Real internal growth (RIG), which strips out the effect from pricing on the organic numbers, was 3.3% with pricing of 0.1%.
“In VMS, growth was impacted by the discontinuation of some private-label business and weaker performance in our mainstream brands, particularly Puritan’s Pride,” Nestlé said.
It added that “sales momentum in premium brands, particularly Pure Encapsulations and Solgar, was partially offset by declines in mainstream and value brands”, along with the loss of the own-label business.
Barclays’ analysts led by Warren Ackerman wrote today that a “strategic review of mainstream VMS will be welcomed”, estimating sales of the assets up for potential disposal at around SFr1bn.
Nestlé reiterated today the “heightened risks” it flagged at the first-quarter results announcement in April around “continuing macroeconomic and consumer uncertainties”.
Those uncertainties are also evident in China, where Nestlé said today it is “taking steps to strengthen [its] growth profile”.
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