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Rise of Nutraceuticals May Lead to More Mergers

The continued merging of food and health could lead to an increase in merger activity as both food and drug companies jump on board the trend to take advantage of the booming market. The market is expected to be worth $280 billion in 2018, double what it was in 2011. Already the number of annual deals between nutraceutical companies climbed from 95 in 2011 to 185 in 2014, reported Reuters.

Food companies are expected to lead the charge as they seek to keep up with consumer demand for healthy offerings, and are experienced with consumer trends. At the same time, drug companies have research expertise that can be applied to health foods as well as drugs. Deals could allow companies from both sides of the equation to compliment each other, using their strengths to deliver the most in-demand products possible.

Nestle has been doing more to merge the two sides than other companies since its creation of the Nestle Health Science unit in 2011. The company recently reorganized the business to focus on consumer care, medical nutrition and novel therapeutic nutrition, and plans to develop “nutritional therapies” as a way of managing health.

Do you see this as the next wave of the food industry? Let us know what you think in the comments.