USA – Nestlé Health Science has agreed to purchase a majority stake in Orgain, a leader in plant-based nutrition, from founder Dr. Andrew Abraham and Butterfly Equity, a Los Angeles-based private equity firm specializing in the food sector.
The agreement includes the option for Nestlé Health Science to fully acquire Orgain in 2024.
Founded in 2009 in California by Dr. Abraham, an integrative medicine specialist and cancer survivor, Orgain has developed protein-based shakes, powders, and snacks that have become popular in the US market.
Orgain has since grown to become the leading plant-based protein powder and leading organic nutritional protein ready-to-drink shake in the U.S.
Its products complement Nestlé Health Science’s existing portfolio of nutrition products that support healthier lives.
“Nutritional protein plays a key role in supporting our health and wellness, whether we enjoy an active lifestyle or are facing health challenges,” said Greg Behar, CEO of Nestlé Health Science.
“Orgain’s emphasis on clean, all natural, plant-based, organic ingredients has made it a leader in the U.S., and we look forward to combining our companies’ expertise to bring Orgain to more people around the world.”
Butterfly Equity, Dr. Abraham retain minority stake
Butterfly Equity and Dr. Andrew Abraham will continue to be minority shareowners, according to a statement from Nestlé. Dr. Abraham will also continue to lead the company as CEO.
“Nestlé Health Science and Orgain share the same philosophy: better nutrition can change lives,” said Dr. Abraham, CEO and Founder of Orgain.
“We’ve worked hard to develop innovative products that make a real difference in consumers’ lives, and now through Nestlé Health Science’s capabilities, resources and dedication to nutrition, we will be able to reach more people around the world.”
Nestle said the deal will be slightly accretive to its organic growth, while slightly dilutive to the Group’s underlying trading profit margin in 2022.
Bolstering position as a health, wellness and nutrition company
The acquisition further aligns with Nestlé’s goal of positioning itself as more of a health, wellness, and nutrition company.
Apart from making acquisitions, it has also been reformulating its products to make them healthier.
Earlier this year, Nestlé Health Science revealed that it is reducing the added sugar in its ready-to-drink and powder Carnation Breakfast Essentials brand by 25%.
Nestlé made similar changes to Nesquik about four years ago, reducing the sugar in the product and devising a new advertising strategy without the brand’s dominating cartoon bunny.
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