Food beats cosmetics and pharma to nutra frontiers

By Guy Montague-Jones

- Last updated on GMT

Related tags Mergers and acquisitions

Food companies are showing far more interest in nutricosmetics and nutraceuticals than pharmaceutical and cosmetics companies, according to Bernstein Research.

In a report entitled “The future of food…Nutraceuticals and Nutricosmetics”,​ Bernstein Research claims that food is moving into the beauty and pharma space more than the other way around.

Analysts suggest this may be because developing functional foods and nutricosmetics is a far more natural extension of existing work for food companies than it is for cosmetics and pharma players.

Fear of cannibalism

Beauty food offerings from cosmetics companies are particularly limited, according to Bernstein Research. For cosmetics companies, beauty foods may not only seem a little foreign, and beyond the boundaries of their expertise, but may also be perceived as a threat to their traditional products.

“Perhaps it is seen as a direct competitor to their topically applied products, and runs the risk of cannibalisation, or even destroying some of their existing business model,”​ said the report.

Pharma companies are showing a more mixed attitude to the food boundary, with some companies pushing forward, while others retreat. GlaxoSmithKline recently launched Lucozade in China and stressed the importance of its consumer business, but Novartis signaled its desire to move out of the space by selling its Medical Nutrition and Gerber businesses to Nestle.

Food investment

Meanwhile, in the food industry, where nutricosmetics and nutraceuticals are closer to home and more complementary to existing ranges, significant investment is being made in the new markets.

Danone and Nestle were picked out as two industry leading companies. Both have adopted health and wellness strategies and undertaken major mergers and acquisitions in the space over the last few years.

Bernstein Research also picked out Unilever as a frontrunner, saying that “perhaps it will have the ability to accelerate and overtake its peers”.​ The Anglo-Dutch company operates in both nutricosmetics and nutraceuticals, and has recently merged its global R&D into one common structure.

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