SUBSCRIBE

Breaking News on Supplements, Health & Nutrition - Europe US edition | APAC edition

Trends > Financial plays

Nestlé invests €50m in 5-year probiotic licensing deal

By Shane Starling , 15-Feb-2012
Last updated on 23-Feb-2012 at 11:05 GMT2012-02-23T11:05:39Z

Nestlé invests €50m in 5-year probiotic licensing deal

Swedish probiotics player BioGaia is welcoming a 5-year, €50.8m extension to a licensing deal with Nestlé for use of its Lactobacillus reuteri probiotic strain in infant nutrition products.

Nestlé will invest 80% of the fee up front this quarter, with €10.8, paid and accounted for on achievement of certain milestones.”

BioGaia president Peter Rothschild told NutraIngredients the deal affirmed the Swiss food giant as its biggest client and the significant income boost – that would more than double its total 2011 revenue of 315m Swedish krona (€35.87m) – would help drive extension of its own brands, conduct research and broaden distribution.

“This deal gives us a secure income for a set period whereas before that was not the case,” Rothschild said, noting Nestlé had the option to manufacture the strains itself but was leaving that with BioGaia for the time being.

The deal is exclusive to Nestlé infant formula products although there is an option for extension into other areas such as intestinal health.

“This deal keeps brings us even closer to Nestlé so we are very happy,” Rothschild said. “We are also conducting ongoing research with them.”

In a statement Rothschild added: "The collaboration with Nestlé has developed into a close partnership and we are very happy to be able to offer Nestlé solutions which are unique and effective. We look forward to developing the collaboration further.”

“In addition, the acquisition of the licenced rights as such constitutes a very attractive deal for BioGaia now that we are through the new agreement have secured income that otherwise would not have been guaranteed under the original contract.

The other initiatives with Nestlé may also open new business opportunities with other customers in different fields and also increase the distribution of BioGaia-branded products."

EFSA effect

Like almost every probiotics player, the company has had claims rejected by the European Food Safety Authority (EFSA), but it said the rejections had, “not affected us in the slightest” as the company, “did not do consumer data”.

“We can show the clinical data to the doctors and they can decide for themselves. But we continue to invest in new science and may submit other claims to EFSA at a later date.”

The company was encouraged by growth in emerging markets with latin America and the Middle East performing well, and a new deal just inked in Morocco, although it was being held back in China by an elongated regulatory approval process.

“It’s a 1.5-2 year process typically,” Rothschild said.

Related products

Live Supplier Webinars

Polyphenols tipped to become the way to innovate in Sports Nutrition
Fytexia
Orally bioavailable standardized botanical derivatives in sport nutrition: special focus on recovery in post-intense physical activities
Indena
Collagen in motion: move freely and keep your injuries in check
Leading manufacturer of gelatine and collagen peptides
Life’s too short for slow proteins. Whey proteins hydrolysates: Fast delivery for enhanced performance
Arla Foods Ingredients
What it Takes to Compete and Win in Today’s Sports Nutrition Market
Capsugel
Sports Nutrition Snapshot: Key regional drivers and delivery format innovations
William Reed Business Media
Gutsy performance: How can microbiome modulation help athletes and weekend warriors
William Reed Business Media
Pushing the boundaries: Where’s the line between ‘cutting edge nutrition’ and doping
William Reed Business Media
Alpha & Omega in Sports Nutrition – Using Omega 3’s and A-GPC to improve performance and recovery.
KD Pharma

On demand Supplier Webinars

High-amylose maize starch may reduce the risk of type 2 diabetes: what does this qualified health claim mean?
Ingredion
Balancing Innovation and Risk in Sports Nutrition Ingredients
NSF-International
Explaining bio-hacking: is there a marketing opportunity for food companies?
William Reed Business Media
Personalized Nutrition – how an industry can take part in shaping the future of Nutrition
BASF Nutrition & Health
Find out Nutritional and ingredient lifecycle solutions and strategies!
Roquette
Is the time rIpe for I-nutrition?
William Reed Business Media
The Advantage of Outsourcing Fermentation-based Manufacturing Processes
Evonik Health Care
All supplier webinars