Growing Its US Nutrition Presence
After the deal is completed, Nestle will take over Bountiful’s main brands, including Nature’s Bounty, Solgar, Osteo Bi-Flex, and Puritan’s Pride. Nestle will buy the company from the private equity firm KKR, which is the majority-owner of Bountiful.
“Today’s announcement recognizes the transformation of The Bountiful Company over the past 3+ years, as well as the collective value and capabilities of the organization. I am incredibly grateful to the 4,500 colleagues around the globe who have worked tirelessly to get us to this point,” said Paul Sturman, president and CEO of The Bountiful Company.
The health and wellness business sector has grown significantly over recent years as consumer companies have been looking to include wellness and self-care products in their offerings due to increased interest among consumers to slow down aging and fight illnesses.
The Swiss food company appointed Mark Schneider as its new CEO in 2016, who previously worked in the healthcare industry as a part of the food giant’s plan to facilitate the shift toward health and wellness. In 2020, Schneider said he intends to make the company “a health and nutrition powerhouse,” partly through business acquisitions.
Shortly after his appointment, Nestle made its first acquisition under Schneider and bought the Canadian vitamin company Atrium Innovations for $2.3 billion. Not long ago, it also acquired biopharmaceutical business Aimmune Therapeutics for $2.6 billion.
On the other hand, Nestle has been offloading slow-growing businesses that produce food and beverage products, including its bottled-water makers Poland Spring, Arrowhead, and Pure Life, all purchased for a total of $4.3 billion.
Nestle expects the Bountiful business deal to help it grow its nutrition presence in the United States (US) and give rise to new business growth opportunities.
Brands under Bountiful made $1.87 billion in business sales in the year that ended March 31. The Swiss food and health company said it would not be taking over Bountiful’s sports and active nutrition businesses, including Pure Protein, Body Fortress, and Dr. Organic.
“We know that The Bountiful Company will add value to Nestlé and continue to enhance the health of the millions of consumers who use their products each and every day,” said Nate Taylor, partner and co-head at KKR.
Last week, the Switzerland-based food and health company reported the best quarterly sales growth in almost ten years, in part fueled by its Health Science business whose organic sales climbed nearly 10%. The company received a boost through strong sales of vitamins, minerals, and supplements that support health and the immune system.
But even though Nestle has been increasingly focused on nutrition products since Schneider took the reins, the company’s health science unit represented just around 4% of its overall Q1 sales.
On the other hand, the competition in the vitamins and supplements industry continues to increase as other consumer giants, including Procter & Gamble and Reckitt Benckiser, also joined the sector.
Nestle said it is buying multiple Bountiful businesses for $5.75 billion in a deal that will allow Nestle to leverage the increased demand for minerals in nutritional supplements.