Nestlé’s Nature’s Bounty divestiture highlights gap between premium and legacy brands

The sale, which comprises the established brands Nature’s Bounty, Osteo Bi-Flex, Ester-C, Gard, Nuun, Puritan’s Pride and Sisu, as well as the associated U.S. private-label supplements business, dedicated manufacturing, packaging, warehousing and distribution operations, was presented as an important step in the strategic transformation of Nestlé’s portfolio by CEO Philipp Navratil. The mainstream VMS business is also expected to benefit from dedicated ownership.

“We are focusing our resources where we have the strongest competitive advantage,” Navratil stated in a press release, highlighting the performance of premium brands Solgar and Pure Encapsulations.

Solgar was included in Nestlé’s US$5.75 billion acquisition of The Bountiful Company in 2021 and was the sole premium brand in a portfolio that included Nature’s Bounty, Osteo Bi-Flex and Puritan’s Pride. In 2017, Nestlé acquired Atrium Innovations, which included the Garden of Life and Pure Encapsulations brands, for US$2.3 billion.

“Nestlé likes premium brands and winnowing the portfolio to given them the premium brands is a smart strategy,” said Greg Horn, managing director and partner at William Hood and former CEO of GNC and Garden of Life. “Companies like Nestlé think in longer time frames and they eventually sold the parts they didn’t want. It’s an established playbook, and I wasn’t surprised to see it.”

The sale was first mooted last year when Nestlé announced a strategic review of its VMS assets acquired as part of the Bountiful deal. Then CEO Laurent Freixe announced efforts to turn around Nestlé’s “sluggish” performance by launching a $2.8 billion cost-cutting effort and focus capabilities in science, innovation and brand-building to give the company a “distinct competitive edge.”

The sale price raised eyebrows for Marc Brush, an industry strategist and former editor of the Nutrition Business Journal, with the bulk of that US$5.75 billion acquisition of The Bountiful Company now being divested for $1 billion. Nestlé’s mainstream vitamins, minerals, and supplements business—its Holistic Health portfolio— generated $1.2 billion in sales in 2025.

“I’d put this deal in the distressed assets category,” Brush said. “Yellow Wood is getting these legacy brands for less than 1x sales, and the strategic review process here took over a year. I think Nestlé would have liked a bigger payout, but the market has moved quickly and meaningfully away from mainstream and budget brands toward premium and science-forward.”

Brush pointed to the recent acquisition of Thorne by P&G for US$3.6 billion, which was reportedly six times Thorne’s estimated sales, noting that such comparisons are apples to oranges.

“This deal [Nestlé-Yellow Wood] helps to bookend the investment market for supplements, and it’s clearly a dramatic drop now from high-growth to no-growth assets,” he said.

A portfolio of household brands

Nature’s Bounty remains a marquee brand and is ranked the number two overall VMS brand in the U.S. The brand’s products are consumed in more than 20% of U.S. households, according to Yellow Wood, with growth potential across a number of positions, such as hydration, gut health and immunity.

“Holistic Health is an excellent platform of trusted brands with deep retailer relationships providing significant opportunities for continued growth,” said Dana Schmaltz, partner at Yellow Wood, in a press release.

Schmaltz added that running Holistic Health as a standalone business would give Yellow Wood an opportunity to invest in the individual brands and their market positions.

“Yellow Wood are great at taking spin offs and brands that haven’t had a lot of attention and giving them a lot of attention,” Horn said. “They really like that strategy… and it is a scalable asset. It has amazing distribution. There’s a lot for Yellow Wood to work with.”

Michael Bush, managing partner at GrowthWays Partners, described the deal as a natural bolt-on for Yellow Wood Partners. The firm’s existing portfolio consists largely of household, personal care and lifestyle brands like Q-tips, Chapstick, Suave and Dr. Scholl’s that appeal to a demographic closely aligned with that of Nature’s Bounty, Osteo Bi-Flex and Nuun, he said.

Bush noted while these are not premium brands, they are well-distributed brands that are largely household names.

“So, adding Nestle’s brand assets makes a ton of sense to expand their footprint beyond specialty supplements and into the broader lines carried by Nature’s Bounty and Puritan’s,” he said.

This transaction marks Yellow Wood’s sixth significant carveout acquisition from five major global consumer companies, including Bayer, Reckitt, Unilever and Haleon.

“This is likely viewed by them as an easy extension of their operating model into an ancillary category of consumer products,” Marc Brush said. “Private equity is well known for its ability to extract value this way, and it might work just fine.

“But beware: We’ve seen lots of outside investors come into the space and fail to find sound footing, given the complexities of supply chains, regulations and consumer preference. I think Yellow Wood’s going to have to find more growth out of Nature’s Bounty for this to have any chance of paying off in the long run.”