Shifting consumer demand, tighter US oversight and muted buyer interest are complicating Nestle’s plan to sell its mass-market vitamins portfolio
Nestle’s attempt to offload its mass-market vitamins business is running into shifting consumer preferences and rising regulatory uncertainty, complicating the Swiss group’s push to secure a strong valuation for the underperforming assets, as per Reuters reports.
The world’s largest packaged food company began a strategic review of its low-growth vitamins, minerals and supplements (VMS) brands in July. The process, reaffirmed after Philipp Navratil took over as CEO in September, is expected to lead to a sale.
But the USD 193 billion global supplements industry has tilted toward higher-priced products backed by clinical research, reducing appetite for traditional mass-market labels. Potential buyers are also wary of the sector’s fragmentation and an evolving U.S. regulatory regime.
Reuters reporting indicates that major consumer goods companies have shown limited interest, although private equity funds remain possible contenders.
Private Equity Seen as Most Likely Buyer
Nestle bought the brands in 2021 in what PitchBook ranks as one of the largest VMS deals in more than a decade. Matching that valuation now will be difficult amid what analysts describe as a surge in demand for scientifically validated products.
Industry peers such as Danone and Unilever are focusing on premium, faster-growing segments. A senior Unilever source said the company had not fully ruled out a deal for Nestlé’s portfolio but added that any acquisition must involve “science and tech-led brands in fast-growing sectors.”
The business is also relatively small in market share terms. None of the brands holds more than 2.1 per cent of the U.S. vitamins market, according to Euromonitor data cited by Mintel analyst David Hamlette, limiting the potential for rapid returns.
Regulatory Shift Adds Another Risk
The US regulatory outlook is another point of concern. In March, US Health Secretary Robert F. Kennedy, Jr. said he plans to tighten the “Generally Regarded as Safe” (GRAS) pathway for food additives, a move that could require more ingredients to undergo U.S. Food and Drug Administration review. No proposal has been formally issued, but industry observers expect one soon.
The Council for Responsible Nutrition has opposed the idea, with Andrea Wong, the group’s senior vice president of scientific and regulatory affairs, arguing that a better fix is “to provide FDA with the resources” needed to enforce existing rules.
An HHS spokesperson indicated that stricter oversight was expected to ultimately improve the dietary supplement market and conventional foods by enhancing their safety.
Muted Interest from Retailers and Rivals
The reluctance extends beyond packaged goods competitors. Supplement retailer GNC, which also markets its own brands, said it is prioritising innovation in its existing portfolio. It will focus on products “that align with our science-backed standards,” said CEO Michael Costello as per media reports.
Rapid Market Growth Could Still Attract Bidders
Despite weak near-term sentiment, the sector’s long-term outlook is robust. The global supplements market, valued at USD 192.7 billion in 2024, is projected to more than double to USD 414.5 billion by 2033, according to Grand View Research.
That growth could draw private equity buyers, said Alex Evans of L.E.K. Consulting, though he noted that buyout firms lack the cost synergies available to strategic industry players.
Kai Lehmann, a portfolio manager at Nestle shareholder Flossbach von Storch, suggested that private equity appeared the most probable route and acknowledged that valuations could take a hit.
(With Input from Reuters Reports)
