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June 26, 2006

Nestle Moves Into The Diet Market

NestleI guess I’m a little slow on the uptake (chalk it up to a very busy month), but I didn’t read until yesterday that Nestle was gearing up to buy Jenny Craig for $600 million dollars. What I found interesting is what this purchase says about Nestle. The chocolate candy bar company must be seeing some big dollar signs down the road to make such a sizeable investment outside their market of expertise.  With all the news on obesity, it’s climb and how it is effecting the youth of America (soon to be paying consumers), I guess it makes sense that they’d want to put their fingers in the proverbial pie. (Mine with a scoop of ice cream please).

Calling obesity a "major public health concern," Nestlé's chairman and chief executive, Peter Brabeck-Letmathe, said in a statement that the Jenny Craig purchase would help transform Nestlé into "a nutrition, health and wellness company that sees weight management as a key competence." 

Hmm…really?  Wow, that’s seems like a bit of a stretch.

What seems more factual is that Nestle commands lots of supermarket shelf space. They could cover a lot of retail real estate selling prepackaged diet food and products using their immense power and influence.  With diet related products growing each year in the double digits that’s no small change.

Andrew Ross Sorkin of the New York Times writes:

For Nestlé, which already owns Lean Cuisine, the deal will bolster its position against rivals like Unilever, which sells Slim-Fast packaged meals and shakes — a business that is growing at double digits — as well as Weight Watcher International and ConAgra Brands, which owns Healthy Choice.

For more on the Nestle-Craig acquisition, check out the rest of Sorkin's article in the New York Times.

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Posted by Cindy on June 26, 2006 | Permalink


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