Nestlé Health Science’s double-digit growth driven by supplements, infant nutrition suffers sales decline
02 May 2022 --- Nestlé is dialing up the nutritional content of F&B, fueled by its investments in R&D and recent acquisitions into the health and wellness space. The company notes that its Nestlé Health Science business recorded double-digit growth, reflecting strong demand for vitamins, minerals and supplements, as well as healthy-aging products in 2021.
Dairy saw mid-single-digit growth, based on strong demand for premium and fortified milks, coffee creamers and ice cream, according to the company’s 2021 annual review
Mixed outcomes for infant nutrition
The company’s infant nutrition division reported negative growth, however, impacted by a sales decline in China and lower birth rates globally.
Last year, Nestlé implemented a turnaround plan for its infant nutrition business in China to restore growth and profitability.
The company also unilaterally committed to stop the promotion of formulas for infants from birth to six months of age in all countries by the end of 2022.
Despite these setbacks, sales of human milk oligosaccharides (HMOs) products continued to see robust growth, reaching CHF 1.2 billion (US$1.2 billion).
Nestlé also recently introduced an infant formula made with a combination of five human milk oligosaccharides (HMOs).
Closing the micronutrient gap
In one of its latest moves to improve nutrition, the Switzerland-based F&B giant launched Bunyad Iron+, an affordable dairy-based drink.
The proprietary iron source is based on Ferri-Pro, which Nestlé acquired the technology to produce in January 2019. The new source of iron is notably more suitable for dairy products and is touted for being three times more bioavailable compared to other available sources.
The Bunyad Iron+ beverage is being launched in Pakistan, where one out of two children are deficient in iron. The move underscores the company’s approach to providing access to high-quality nutrition worldwide, regardless of income level.
The company is also exploring ways to improve the affordability and accessibility of nutrient-dense products.
In 2021, the company also saw the rollout of the affordable nutrition products Lactogen milk powders and a new nutritious sorghum-based porridge under the Golden Morn brand in Central and West Africa.
Nestlé is also tackling micronutrient deficiencies by fortifying popular brands like Maggi bouillons, noodles and milks such as Bear Brand, it adds.
Investment in nutritional solutions
Nestlé’s 2021 annual review underscores its continued investment in health and wellness products. Nestlé Health Science reports organic growth of 13.5% and a sales increase of 45% to CHF 4.8 billion (US$4.9 billion).
Net acquisitions increased sales by 33.2%, largely related to the acquisitions of the core brands of The Bountiful Company, Vital Proteins, Zenpep and Aimmune, states Nestlé.
Formerly part of The Bountiful Company, Solgar, Osteo Bi-Flex, Puritan’s Pride, Ester-C and Sundown brands have boosted Nestlé’s portfolio to establish the company as the self-declared industry leader in vitamins, minerals and supplements. The US$5.75 billion deal closed last August.
In July, Nestlé also entered into an agreement with Seres Therapeutics to jointly commercialize SER-109, an investigational oral microbiome therapeutic in the U.S. and Canada.
Healthy hydration opportunities
In developed markets, Nestlé is further working on the “strategic transformation” of its global water business. The company completed the divestiture of its North American Water brands and has shifted its focus toward premium mineral water brands, as well as healthy hydration products.
In March 2021, Nestlé acquired Essentia, the company that “pioneered” ionized alkaline water more than twenty years ago.
Essentia uses a proprietary three-step process of reverse osmosis, a mineral blend infusion and an ionization process. This results in a clean-tasting water with a pH of 9.5 or higher.
The company gives Nestlé an immediate strong presence in the high-growth, functional water segment and supports efforts to capture opportunities with emerging consumer trends such as healthy hydration, the report details.
The acquisition also brings a passionate following of influencers known as “Essentia Nation” that includes high-profile athletes and celebrities.
Building upon its foray into healthy hydration, Nestlé completed the acquisition of Nuun last July.
More research underway
Beyond acquisitions, the company continues apace with R&D and open innovation. Its global R + D Accelerator program recently launched the bioactive beverage X-tract that supports muscular energy, as well as a smoothie range for immunity protection and energy.
Nestlé is also making research advancements through its collaboration with the EpiGen Global Research Consortium. The latest co-research led to the development and testing of a nutritional supplement for pregnant women that led to a significantly decreased incidence of preterm birth. The mixture is a proprietary blend of myo-inositol, probiotics and micronutrients.
Meanwhile, Nestlé Health Science introduced Vital Proteins Immune Support Gummies and Persona Immune Support.
It also recently launched Yiyang Mobility and Yiyang Immunity in China, addressing healthy aging.
By Missy Green
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