Nestle has agreed to sell its regional spring water brands, purified water business and beverage delivery service in North America to One Rock Capital Partners, in partnership with Metropoulos & Co., for $4.3 billion.
The sale includes brands such as Poland Spring, Deer Park, Ozarka, and several others. However, it does not include premium brands including Perrier, S. Pellegrino, and Acqua Panna, which the company will sharpen its focus on.
A FOCUS ON PREMIUM
Sales of premium beverage brands have been growing during the pandemic. According to SPINS, a wellness-focused company, there was double-digit growth for non-carbonated flavored (+14.4%), sparkling (+15.3%), and flavored sparkling water (+22.3%) over the past year. The company noted that consumers who are spending more time at home perceive “fancier” waters as a luxury in which they can indulge.
“This sale enables us to create a more focused business around our international premium brands, local natural mineral waters and high-quality healthy hydration products,” said Nestle CEO Mark Schneider in a press release. “We will also boost our innovation and business development efforts to capture emerging consumer trends, such as functional water.”
The company has been refreshing its portfolio and divesting itself of lower performing brands since the 2017 installation of Schneider, who has bought and sold around 50 businesses since taking over. Back in June, Schneider noted that he wanted the company to focus more on better performing brands, while the rest of the business was being put under review.
CAN BILLIONAIRE INVESTOR RESCUE THE BRANDS?
Dean Metropoulos is part of One Rock’s purchase of the aforementioned brands. The billionaire is known for reviving ailing products such as Bumble Bee Tuna and Chef Boyardee, reported Bloomberg (Feb. 16).
However, bottled water has been problematic for Nestle and doesn’t appear to be an easy fix. There’s a lot of competition in the space, as well as mounting criticism over wasted plastic and natural resources. It remains to be seen whether Metropoulos will be able to help solve the issues and resuscitate the brands.