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Nutrition and Health Businesses Taking Center Stage

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Nutrition and Health Businesses Taking Center Stage

Nothing has been more impactful in 2020 than how the COVID-19 pandemic has altered the way people view their lifestyles. Consumers are becoming increasingly more cognizant of the importance of health and well-being for themselves and their families. And companies are following these important trends by pivoting their focus to nutrition and health and other food-related areas.

Archer-Daniels-Midland (ADM), a food processing and commodities behemoth, which has had its hands in numerous businesses (such as Oil Seeds and Corn Processing; Chemicals, Packaging; Fertilizers; and Paper & Pulp) for nearly 120 years, has been making a big push in the direction of nutrition over the last several years.

“Consumers’ attitudes, priorities, and behaviors are shifting significantly,” said Ana Ferrell, VP of marketing at ADM. “This evolution is providing a unique opportunity for forward-looking food and beverage companies to bring a suite of trailblazing new products to market.”

According to an ADM report, “People are looking for new ways to improve their mental wellness during these stressful times, including granting themselves permission to consume indulgent, comforting food and beverages. However, they are tempering this desire with weight management needs and seek a careful overall balance of indulgence and good nutrition.”

The nutrition division gained 35% during its second quarter of 2020 versus a year ago on strong sales of products including probiotics, fibers, and plant-based proteins, and the company is projecting operating profit of this division to reach $1 billion, up from year ago levels.

Nestlé SA, the largest food and beverage company in the world, noted the pandemic definitely raised consumers’ awareness on health, which has been a boon for its growing health-sciences unit.

CEO Mark Schneider mentioned that the Health Sciences unit represents only about 3% of Nestlé’s overall sales, but said, “we are transforming Nestlé Health Science into a nutrition and health powerhouse through a combination of strong organic growth and targeted acquisitions. The recent additions of Zenpep, Vital Proteins, and Aimmune Therapeutics are further steps in the expansion of our nutritional health offerings.”

The Health Science unit posted double-digit growth during the first nine months of 2020, supported by strong momentum for consumer and medical nutrition products. The company reported that demand for vitamins, minerals, and supplements that support health and the immune system remained high. Garden of Life and Pure Encapsulations saw strong growth, particularly in e-commerce. Healthy-aging products grew at a double-digit rate, supported by Boost in North America and Nutren in Brazil. Medical nutrition grew at a high single-digit rate, led by food allergy and adult medical care products.

Meanwhile, Danone S.A., a world leading food company out of Paris, focuses on several business lines: Essential Dairy and Plant-Based Products, Waters, and Specialized Nutrition (including Early Life Nutrition and Advanced Medical Nutrition).

Danone touts itself as having the #1 leadership position in Europe Medical Nutrition and #2 worldwide in Early Life Nutrition.

Specialized Nutrition sales did however see a decline of 5.7% in the third quarter of 2020 on a year-over-year basis, primarily by the performance of China, which posted a steep double-digit sales decline in the quarter against a high base last year. Yet, in the Chinese domestic market, the company said it’s continuing to see strong underlying consumer demand for its brand as Aptamil (infant formula for 1-2 year-olds) experienced good market share momentum in e-commerce and mum&baby stores, driven by the Platinum premium range.

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Other regions of the world like South East Asia, Middle East, and U.S. maintained their strong growth momentum for Danone, benefitting from a strong acceleration of e-commerce and the launch of successful innovations also under the Aptamil umbrella and local brands.

Ultimately, technology and advancements in health and nutrition science are paving the way for the rise of personalized nutrition and the end of a one-size-fits-all approach to daily nutrition, and most of the world’s largest food companies are at the table.

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