Nestlé Health Science acquires US plant-based nutrition company

The health science division of the world’s largest food manufacturer is acquiring a majority stake in Orgain, a maker of protein powders, shakes and bars, according to a press release. The financial terms of the transaction were not disclosed. Founder Dr. Andrew Abraham and Butterfly Equity will each continue to hold a minority share in the California company.

Dr. Abraham will continue to serve as CEO of Orgain, but Nestlé taking a stake in the company signals a move toward expansion. While Orgain is a leading purveyor of plant-based nutrition in the U.S., Nestlé Health Science’s CEO Greg Behar said “we look forward to combining our companies' expertise to bring Orgain to more people around the world."

Health and wellness has been a particularly attractive segment for Nestlé in recent years as some legacy food categories have stagnated. In fact, the company’s CEO Mark Schneider promised in a conference call in 2020 to convert a health and nutrition "powerhouse.”

As consumers are progressively demanding more functional benefits from their food, Nestlé has worked not only to give its portfolio of food products a dose of better-for-you, but the company has also been acquiring a slew of companies focused on making nutrition accessible to everyday consumers. Some of its most recent acquisitions include Aimunne Therapeutics, Nuun and Essentia. With its new focus on improving health through nutrition, Orgain’s CEO expressed in the release that it felt that "Nestlé Health Science and Orgain share the same philosophy: better nutrition can change lives.”

The lingering presence of Covid-19 has only reinforced consumers’ focus on nutrition. According to the International Food Information Council's 2020 Food & Health Survey, 85% of people changed their eating habits due to the pandemic, and many people are skewing toward healthier options. A Heartman survey found that since the pandemic, 25% of consumers are selecting healthier snacks.

With its focus on protein powders and snack-like options such as shakes and bars, Orgain fits squarely into the healthy snacking trend. If this partnership between Nestlé and Orgain turns out to be fruitful, there may be a full acquisition in Orgain’s future. The agreement includes the option for Nestlé Health Science to fully acquire Orgain in 2024.