Essentia Water | – When Nestlé announced last month that it

When Nestlé announced last month that it would officially sell most of its water business, the deal was seen as a way for the consumer products giant to focus on its core international brands like Perrier and San Pellegrino, as well as local natural mineral waters, healthy hydration products and functional water. In 2018, Keurig Dr. Pepper acquired the Core Nutrition brand for $525 million and added Core Hydration, a nutrient-enriched bottled water and Core Organic, an FDA-certified fruit hydration drink. While mergers and acquisitions remain a popular tool for companies looking to exit slow-growth businesses or strengthen their presence in popular trends, the deal has taken a different shape in recent years. “With the acquisition of Essentia, we continue to optimally transform and position our water business for long-term profitable growth here in the United States and around the world,” Steve Presley, president and CEO of Nestle USA, said in a statement. Now that the brand is owned by Nestlé, Washington-based Essentia will immediately benefit from the food and beverage giant’s distribution network, business relationships, innovation and global scale. The company is marketing higher alkalinity as the best for rehydration, though the Center for Science in the Public Interest said evidence of that and other health claims is insufficient, and that alkaline water isn’t worth the price. In 2018, Technavio analysts projected that the global functional water market would grow at a compound annual growth rate of nearly 9 percent through 2022. Since 2017, Switzerland-based Nestlé has closed or announced more than 75 deals, about 18% of its portfolio, as it allows slower-growing, less profitable brands to grow and focuses on companies that best adapt to changing consumer tastes. The Essentia acquisition confronts these beverage giants, which are trying to move away from sugary soft drinks and offer more tea, sports drinks and water. Nestlé wasted no time in expanding its portfolio in the fortified water segment. Nestlé has announced sales growth of 3.6 percent by 2020, the highest in five years. To achieve this goal, Nestle will rely in part on innovations and acquisitions such as Essentia and others. Coca-Cola owns Smartwater and PepsiCo owns Lifewtr, part of the trendy premium functional water category. Unlike ready-to-drink beverages, which face increasing competition from private labels, premium drinks are increasingly in demand from consumers who want more than just hydration. Last year, companies such as Freshly, a provider of freshly prepared meal delivery services in the U.S., and Vital Proteins, maker of collagen bars, drinks, capsules and powders, added to the list.

Leave a comment

Your email address will not be published.