December 17, 2006
Blurring the Food-Drug line: Nestle buying unit of Novartis
Whatever happened to real food? Food giant Nestle is adding to its ability to sell products that kind of look like food, but have the characteristics of nutritional supplements. Nestle has agreed to buy a unit of Novartis, one of the largest makers of nutritional supplements. Earlier this year Nestle bought Jenny Craig and Uncle Tobys, a cereal bar producer.
This move makes sense as the baby boom generation ages and medical problems increase. This new acquisition will make Nestle the second largest maker of nutritional supplements for hospitals.
Sales of nutritional food are increasing as much as 8 percent a year, compared with 1 percent to 2 percent for the broader food market, according to Kepler Equities. Nestle has sold divisions valued at more than $1 billion that process cocoa and coffee and make food ingredients.
The Novartis unit makes Boost drinks, designed to bring proteins, minerals and vitamins to people with ailments ranging from anorexia to cancer and to aid digestion. It also makes Nutrament energy-drink and Optifast weight-loss products. It has 2,000 employees and operates in 40 countries.
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