Nestlé said it might sell Nature’s Bounty and other brands in its vitamins business, as part of Chief Executive Laurent Freixe’s efforts to boost sales growth at the world’s largest packaged-food maker.
The Swiss maker of Nescafe coffee and Purina pet food said Thursday that it was launching a review of underperforming brands in its vitamins, minerals and supplements unit that might result in a sale, as it seeks to steer the business toward higher-end products such as Garden of Life and Solgar.
Nestlé bought Nature’s Bounty, Osteo Bi-Flex and Puritan’s Pride in a $5.75 billion deal for the main brands of vitamin maker Bountiful in 2021. At the time, the acquisition marked one of the biggest moves in the company’s push into the nutritional-supplements market under Freixe’s predecessor, Mark Schneider.
Freixe, who succeeded Schneider last year, has pledged to invest more in advertising and marketing to generate demand and revive sales growth, as well as to address issues at laggard units within the group’s portfolio.
I read this in the WSJ today. Recently, there was another article about Hersey and how those industries dependent on cocoa are reeling from drought in Africa and pricing going up over 50%(don’t recall the exact number. might have been over 60+). Horrifying, whatever it was.
Course, they’re going to try to pass these expenses on to the customer. Be darned if I’m going to pay 3 bucks and change for a chocolate bar-the only time I buy 'em is at Halloween/Christmas. My taste in sweets never having advanced beyond those I loved as a kid and tend to be chewy and full of HFCS ( red licorice/sour cherries/Hot Tamales).
I was thinking Nestle might be selling the vitamins to give them capital to ride out the droughts and price increases. Or they have some company sniffing round-and might as well sell while the getttin’s good.
Perhaps vitamins aren’t as profitable as Nestle assumed-- have to ask @ASV_Vites, who specialty it is.
I also spent 20 years working for Nature’s Bounty, so yea, I know all about it…
They must really be doing something wrong over there if the profitability isn’t where they thought it would be. Base margins were in the mid 80’s to low 90’s when I was there. Of course there are a ton of expenses but even so…
The real problem Nature’s Bounty has is the son of their founder (Scott Rudolph). The Carlyle Group burned him when they were the first to buy NBTY and take it private. He was to stay on but that didn’t last too long. Waited a few years for his non-compete to lapse and started “Piping Rock Health Products”. Nature’s Truth is one of their brands that is now dominating FDM. All of his sales folks left Nature’s Bounty, let their own non-competes lapse, and re-joined him and his son Michael (who really runs the show), at Piping Rock.
They dominate Amazon too under the following brands:
Carlyle - (named this out of spite)
Horbach - (named this out of spite after one of Carlyle’s managing directors)
Pink
Sundance
Lindberg Nutrition
Fitness Labs
Berkshire Labs
And I am sure I forgot a few…
They recently acquired the following brands from Clorox:
Natural Vitality
Renew Life
NeoCell
Rainbow Light
They also have their own manufacturing operations all over the country. Some they built, others they acquired.
The Rudolph’s don’t mess around and are in it to win it. They have put so much pressure on Nature’s Bounty and their brands that it’s hurt them. Should have let Scott run the company his father started… I spent 6 solid months working directly with Scott in 2010. Truly an industry pioneer and really motivated even though his net worth it up there…
My partner does some contract work for Nature’s Bounty and Piping Rock.
My latest estimate is PR does well over $250M a year just on Amazon, and total sales well over $1B, maybe $2B…
Wondering if people cut back on buying vitamins and supplements when the economy goes south?
When I volunteered at the book sales of local libraries, years ago, cookbooks and books about all sorts of home remedies for medical and other household problems flew off the shelves.
Interesting. This comports with my observation of the self-help books of many types flying off the shelves at our FOL shop in the time of post 2008 financial issues.
Do any “Piping Rock” vitamin buyers know they are buying a product named for an incredibly exclusive country club on the north shore of Long Island? https://www.pipingrockclub.org/
Nope… Named after the street Scott Rudolph lived on at the time. His nextdoor neighbor was J-Lo. He’s since divorced. I think he moved somewhere else and wifey got the house…
The Piping Rock Club was around long before People Magazine.
I have read the New York Times, “Women’s Sports Pages,” for many years, and the club, along with St. Johns Church of Lattingtown has always been a stalwart entry. https://stjlat.org/
There could be nothing wrong with Nestle’s vitamin business.
There is a very strong wave of pressure to “de-conglomerate” large businesses, Sometimes justified sometimes not justified.
A recent article questioned whether Warren Buffet’s successor will be strong enough to be able to continue his highly successful strategy for Berkshire Hathaway.
I followed the dismantling of Jack Welch’s GE. A product of hiring inferior executives. One of whom moved to Home Depot and almost tanked that great company.
I take far too many supplements for a skeptic to take, but they are cheap in the total scheme of things, and have not done me any harm, yet.
That’s the typical playbook of private equity. Borrow heavily, milk the company dry (sorry, I meant “extract value”) via special dividends, and then if the company can make it, great. If not, they came out hundreds of millions of dollars ahead.
PE has had its slimy tentacles in almost everything. Now they’re moving into accounting and taxation practices. PE is horrible for any industry but your next corporate tax return could be outsourced to India because they got rid of all the CPAs/EAs.
I suspect you don’t hold a candle to my Father in Law. When I helped to clean out his house, we found roughly 800 bottles on the shelves outside the bathroom; about another 5-600 in the bathroom. But from what I heard, the big stash was in the bedroom (which was cleaned out after I was out of town), with maybe another 2000 or so bottles.
He bragged about taking 80-100 pills/day. The type of guy who would read a report in Weekly News that a girl in Mongolia reported that taking rootwort every day stopped her migraines, so would seek out rootwort to take daily, even though he had never suffered migraines. OTOH, would reject anything published in a scientific journal, as “they were only after the money”.
He passed away in 2001 (indirectly related to Covid). Perhaps the loss of his business put a dent in the profitability of NV.
