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June 11, 2020

Nestle acquires majority stake in US collagen business Vital Proteins

Nestlé has taken a majority stake in a US-based nutrition business, described as an "exciting opportunity".

By Leonie Barrie

Nestlé has taken a majority stake in US-based nutrition business Vital Proteins, which makes supplements and food and drink products using collagen.

The deal is described as an “exciting opportunity” by Nestlé.

Financial details pertaining to the deal, done through the company’s Nestlé Health Science (NHSc) arm, have not been disclosed and nor has the size of the stake Nestlé has taken in the business.

It is the second deal of the week for Nestlé, which revealed on Tuesday (9 June) it had sold its Buitoni pasta brand in North America to investment firm Brynwood Partners.

Chicago-based Vital Proteins, which will continue to operate as a stand-alone business post-deal, has 150 SKUs – including whey powders and collagen-enhanced snack bars – across 35,000 retail outlets in North America and Europe with its products being sold by retailers including Whole Foods, Costco, Target, Walgreens and Kroger. 

Greg Behar, CEO of NHSc, said: “This is an exciting opportunity for Nestlé Health Science to enter a growing area of nutrition with a successful brand.

“Our companies share the belief that nothing is more important than health, and everything we do is focused on that belief. In combining our efforts to optimise health through nutrition, we can achieve even more to help our consumers live fuller, more vibrant lives.”

Vital Proteins said becoming part of the Nestlé Health Science portfolio would equip its business with a “variety of resources to scale their reach and innovation in pursuit of global wellness”.

Kurt Seidensticker, the founder and CEO of Vital Proteins, said: “We at Vital Proteins, alongside Nestlé Health Science, are committed to expanding our wellness platform to the world. We are partnering together to continue the evolution of the functional nutrition space through premium products and innovation that meet customers where they are in their wellness journey.

“Joining NHSc allows us to take Vital Proteins to the next level by leveraging resources, scale and capabilities, and moving toward a future with an expanded offering of science-backed products.”

Seidensticker will continue to lead Vital Proteins after the deal is completed.

Nestlé pointed out that collagen is the most abundant protein found in the body, representing nearly 30% of all human protein content and 70% of the protein content found in the skin. 

Collagen supports the health of skin, hair, nails, bones and joints but production in the body starts to decline at about age 25, hence the need for supplements.

In May last year, Nestlé revealed it had sold its skin health division to a consortium led by Sweden-based private-equity firm EQT Partners and a wholly-owned subsidiary of sovereign wealth fund the Abu Dhabi Investment Authority. The move would reinforce its strategy to “sharpen” its focus on food, beverages and nutritional health products, the Swiss firm said at the time.

That asset provided science-based solutions for healthcare professionals, patients and consumers through three complementary business units: Epiduo and Soolantra in prescriptions; Restylane and Azzalure in aesthetics; and Cetaphil and Proactiv in consumer care.

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