Nestlé has been focused on the idea of food as nutrition for a long time now, and the company’s new CEO Mark Schneider is continuing that vision. Nestlé just announced that it will buy Atrium Innovations, owner of the Garden of Life and Pure Encapsulations brands of health supplements. Nestlé is trying to keep up with fast changing Millennial tastes by innovating its own more nutritional foods and buying up smaller competitors who already service the market for healthier fare. Ben Dummett and Saabira Chaudhuri report:
Packaged-food makers such as Nestlé and Kraft Heinz Co. are being buffeted by a number of forces. Fast-changing consumer tastes have shoppers fleeing some of these companies’ big brands in favor of healthier options or locally or more naturally made goods.
Social media and e-commerce has leveled the playing field for some of these small new competitors—making the big companies’ research-and-development and marketing budgets less effective in holding on to market share.
Earlier this year, Nestlé abandoned its long-held annual sales-growth targets after years of missing them. A few months later, activist investor Daniel Loeb took a $3.5 billion stake in Nestlé, which makes Nescafe, Lean Cuisine and Nesquik, and demanded big change.
In response, Nestlé Chief Executive Mark Schneider has rolled out share buybacks and a formal profit-margin target. He also has said he is willing to shuffle 10% of the company’s portfolio. In June, Nestlé put its North American chocolate business up for sale. The unit could bring in $3 billion, according to analysts.
But mostly, Nestlé has focused on small acquisitions and stake purchases since Mr. Schneider, a former health-care executive, took over in January. The Vevey, Switzerland-based company in recent months bought artisan coffee maker Blue Bottle, cold-brew coffee brand Chameleon, and plant-based frozen foods maker Sweet Earth. It took a stake in subscription meal-delivery company Freshly.
Greg Behar, Nestlé’s head of health science, said buying Atrium would allow Nestlé to extend its product range in areas such as probiotics, plant-based protein nutrition, meal replacements and multivitamins, including non-GMO, organic and natural supplements.
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