Big food makers are betting on healthier and environmentally-conscious foods and tapping into new brands to make up for falling sales of sugary, processed products. Kellogg is buying protein-bar Maker RXBAR for $600 Million, while Nestle is expanding its plant-based product portfolio with the acquisition of vegetarian frozen food startup Sweet Earth, according to reports in The Wall Street Journal, Reuters and Associated Press.
Kellogg Co. plans to buy niche protein-bar company RXBAR for USD600 million as new CEO Steve Cahillane expands the world’s largest cereal maker’s portfolio of healthy snacks, while Kellogg has been responding to consumer changes by launching healthier versions of its mainstay brands such as All-Bran.
The move comes at a time when Kellogg's cereal unit is facing poor demand in the United States over the past five years as consumers move away from packaged and sugary foods and instead opt for organic products.
Chicago Bar Co, a startup that makes protein bars without added sugar, gluten, soy or dairy, sells the product through fitness chains, national retailers and online.
“Adding a pioneer in clean-label, high-protein snacking to our portfolio bolsters our wholesome snacks offering,” Kellogg CEO Steve Cahillane said in an October statement.
Kellogg said Chicago Bar Co will continue to operate independently after the deal and expects the unit to post net sales of about USD120 million in 2017.
In September, Swiss-based food giant Nestle said it would acquire Sweet Earth, the Californian-based maker of vegan meals and snacks such as frozen burritos stuffed with quinoa, beans and other vegetarian ingredients and burgers made from plant-based proteins.
The Swiss-based food giant expects the US market for plant-based foods to be worth around USD5 billion by 2020, as environmental and dietary trends push consumers in the direction of more sustainable food production methods.
Sweet Earth’s products are already stocked across the US in more than 10,000 stores, including independent natural grocers, Whole Foods, Target, Kroger, and Walmart.
Paul Grimwood, Nestlé USA chairman and CEO, said in a statement that up to half of its customers are seeking more plant-based foods in their diet “and 40 percent are open to reducing their traditional meat consumption.”
“One of Nestlé’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends. With unique and nutritious food for all times of the day, Sweet Earth gives Nestlé a leading position in this emerging space," Mr Grimwood said.
Sweet Earth will continue to be led by its founders Kelly and Brian Swette, and will operate broadly independently of Nestlé USA’s Food Division. Nestle did not reveal the cost of the deal.
Nestle recently invested in online meals company Freshly, which delivers cooked meals to customer's doorsteps that it says are free of gluten and refined sugars.
In July, leading Oregon, US-based plant and dairy-free beverage company Pacific Foods revealed it had signed a definitive agreement to be acquired by Campbell Soup Company under which Pacific will become a part of Campbell’s portfolio.
Pacific Foods makes a wide variety of organic products, including soups, sauces, broths and stocks, plant-based beverages and a growing collection of dips, meals and sides.