Atrium’s supplement brands include Garden of Life and Pure Encapsulations. Atrium was owned by a consortium led by private-equity firm Permira. The consortium acquired Atrium in 2013 in a deal that was valued at $591 million. Atrium will be housed within Nestlé’s health sciences arm, which makes products to address diabetes, malnutrition and neurological disorders among other things. The deal is expected to close in the first quarter of 2018, pending regulatory approval.
Consumer health care strategy
Nestlé has been pursuing opportunities in the consumer health care arena to go with its focus on high growth food and beverage categories. The groundwork for this move was laid almost a decade ago when Nestlé acquired Novartis’s medical nutrition arm in a deal valued at that time at $2.5 billion. That included the flagship Boost nutritional drink brand.
“We value Atrium's history as a highly successful company and welcome its 1,400 employees to the Nestlé family. Their brands are a natural complement to our Consumer Care portfolio, which offers nutritional solutions in the areas of Healthy Aging, Healthy Growing, Gut Health and Obesity Care. Atrium's portfolio will extend our product range with value-added solutions such as probiotics, plant-based protein nutrition, meal replacements and an extensive multivitamin line, enabling consumers to address their health and wellness goals,” said Greg Behar, CEO of Nestlé’s health sciences arm.
"Atrium's established brands are in attractive categories and have the potential for continued strong growth as part of Nestlé through category, channel and geographic expansion. It also represents additional offerings in the segment for non-GMO, organic and natural supplements, a fast-growing consumer trend, as well as a new sales channel,” he said.
Entry into new channel
The new sales channel Behar referred to is the practitioner channel, where Pure Encapsulations has a strong presence and competes with brands such as Metagenics, Thorne Research and Standard Process. In the natural channels, Garden of Life is the No. 1 selling brand, according to Atrium. Other Atrium brands include Wobenzym, Douglas Laboratories, Genestra Brands, Orthic, AOV, Minami, Klean Athlete, Pharmax and Trophic.
Nestlé has also sought to capitalize on other health and wellness trends. Earlier this year the company moved into the plant-based nutrition segment with the acquisition of fast-growing California-based Sweet Earth. Details of that deal were not disclosed, but last summer an officer of the privately held company said it was on course for $20 million in revenue in its fiscal 2016. Sweet Earth manufactures a variety of prepared foods, including meat alternative veggie patties.
Nestlé, which is based in Vevey, Switzerland, recorded third quarter revenue of $66 billion.