Natural Products Insider

JAN-FEB 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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naturalproductsinsider . com 5 In the News 2017 was bountiful for the food and beverage industry in terms of mergers and acquisitions that changed the playing fi eld at the supplier, manufacturer and retail levels. These transactions illustrate the vast market opportunity for better-for-you products that deliver clean, simple and transparent ingredients. Amazon Buys Whole Foods Perhaps the biggest deal of the year— and one that sent ripple effects throughout the grocery retail sector—was Amazon's US$13.7 billion acquisition of Whole Foods Market. The blockbuster deal allowed the e-commerce giant to expand its online presence and gain a stronger footprint in the natural and organic food and beverage space. Whole Foods Market ranks as the No. 1 natural and organic foods retailer, ringing up sales of approximately $16 billion in 2016. When the deal was announced, many speculated Amazon would leverage its purchasing power and lower prices to attract cost-conscious consumers who steer away from Whole Foods' Market higher-than-average prices. The day the deal closed, Aug. 28, Amazon slashed prices on staple items such as cheese, meats, pasta and dairy by as much as 43 percent, upping the ante in the fast- growing natural grocery sector. It will be interesting to see how the deal affects other retailers such as Walmart and Target that are investing more in food and beverage. Nestlé Enters Supplements Sector Nestlé entered the dietary supplement sector with its $2.3 billion acquisition of Atrium Innovations. Atrium's brands are a natural complement to the Nestlé consumer care portfolio, which offers nutritional solutions in the areas of healthy aging, healthy growing, gut health and obesity care. The transaction, expected to fi nalize in the fi rst quarter of 2018, extends Nestlé's product range with solutions such as probiotics, plant-based protein nutrition, meal replacements and multivitamins, and represents additional offerings in the segment for non-genetically modifi ed organism (GMO), organic and natural supplements. Campbell's Stirs Up More Healthy Soup, Snacks Offerings Campbell Soup Co. bolstered its position in the healthy soup sector by paying $700 million to acquire Pacifi c Foods. The addition of the Pacifi c Foods portfolio of organic broths and soups, shelf-stable plant-based beverages, and other meals and sides will accelerate Campbell's efforts to deliver real food and beverages that meet consumers' changing tastes and preferences. The acquisition also will bolster Campbell's efforts to drive innovation in health and well-being to reinvent the center store, while giving the company more access to natural and organic customers and channels. In a second blockbuster deal, Campbell's announced it is acquiring leading snack company Snyder's-Lance for $4.87 billion. Snyder's-Lance's portfolio includes Snyder's of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald and Late July brands. The combination of Snyder's-Lance brands with Pepperidge Farm, Arnott's and Kelsen will shift Campbell's center of gravity and further diversify its portfolio into the faster-growing $89 billion U.S. snack food category. Upon completion, snacks will account for about half of Campbell's net sales, with soup making up about 25 percent. The deal, Campbell's sixth acquisition in fi ve years, is the latest in a series of moves the soup giant has made to diversify its portfolio in response to increased consumer interest in health and well-being. Hershey's Broadens Savory Snack Portfolio The Hershey Co. announced it will pay $1.6 billion to acquire Amplify Snack Brands Inc., maker of Skinny Pop, Tyrrells, Oatmega, Paqui and other international brands. The move will strengthen Hershey's position in the snacking aisle and broaden its portfolio of innovative savory snack food brands. Amplify's brands compete in many attractive food categories that are capitalizing on fast- growing trends in snacking with a focus on better-for-you products that deliver clean, simple and transparent ingredients, as well as unique fl avors and forms. Kerry Group Acquires Ganeden The Kerry Group acquired probiotic leader Ganeden for an undisclosed amount. The deal, which complements Kerry's 2015 acquisition of Wellmune ® , strengthens the company's global footprint in the overall nutrition, health and wellness market, particularly in the areas of immune health and digestive health. Kerry will leverage Ganeden's patented technologies to extend into wider applications across Kerry's global developed and developing markets. McCormick Vaults to No. 1 Condiment Maker In the condiment sector, McCormick & Co. Inc. paid $4.2 billion to acquire Reckitt Benckiser's Food Division—a deal that vaulted McCormick from the No. 10 position to the No. 1 spot in the U.S. condiment category. The transaction included Frank's RedHot ® Hot Sauce, French's ® Mustard and Cattleman's ® branded products, as well as the nutrition bar brand Tiger's Milk. The sale of its food division allows Reckitt Benckiser to focus on the global health and hygiene sector, which is growing because of the company's June 2017 acquisition of the Mead Johnson Nutrition Co. The addition of Mead Johnson's infant and children's nutrition business is expected to increase Reckitt Benckiser's revenues in consumer health by approximately 90 percent and increase its developing market scale by approximately 65 percent. Danone Broadens Dairy Presence Danone completed its $12.5 billion acquisition of WhiteWave Foods, a deal that boosted Danone's presence as a global leader strongly addressing tomorrow's consumer trends by providing healthy and sustainable eating and drinking options. The transaction further diversifi es Danone's portfolio and broadens its presence in North America by creating a leading U.S. refrigerated dairy player, as well as one of the top 15 largest U.S. food and beverage manufacturers. 2017: Bountiful Year for Food & Beverage Acquisitions by Judie Bizzozero

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