NOW Foods Strengthens Portfolio by Acquiring SuperNutrition
If you’ve been paying attention to the supplement industry here of late, you’ve seen some of the major mergers and acquisitions that are taking place. Quest Nutrition sells to Simply Good Foods for an insane $1B (cash) and ONE Brands sells to The Hershey Company for $397M. Honestly, good for them! Now the latest is the sale of SuperNutrition (a family-owned business) to NOW Foods. While the details of the acquisition were not disclosed, I’m sure the sale of SuperNutrition was for a pretty penny.
Both NOW Foods and SuperNutrition played in the same sandbox and it makes sense why NOW Foods would want to acquire the business and expand their portfolio of vitamins being that they sell extremely similar products. At the current time, NOW Foods has no plans of expanding the SuperNutrition line of products, but will rather using some of the SuperNutrition branded ingredients to further grow.
When consumers think of NOW Foods, they consider them to be fairly priced. This is mainly due to the brand’s decision to work off of smaller margins to focus on value rather than selling at an insanely inflated price simply due to a name (which unfortunately many brands are doing these days).
Looking at the brand on shelf doesn’t exactly get you excited. Their labels are the one thing that many consumers scratch their head at. The labels are very plain, nothing flashy and nothing that really stands out. In fact, the branding is pretty boring if I must be completely honest. You can walk past their line of products on retailer shelves and not even notice they’re there. Nothing about the brand is eye-catching. But it’s working for them – so, who am I to judge?
Disclaimer: This article is for informational purposes only and is not meant to treat or diagnose any condition. It is recommended that you speak with your doctor before starting any exercise program, changing your daily nutrition, or adding any supplements to your regimen.
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NOW Foods is Making Some Serious Moves
NOW Foods is no small fish in a big pond. When you go to your local supplement store or search online for vitamins, NOW Foods is a brand that shows up quite often and is pushed quite hard. They currently have several hundred SKUs across many different categories which include vitamins, minerals, protein, digestion, and more. They are a trusted brand known for providing high-quality products to consumers as well as being a brand that is known for meeting label claims.
So, what exactly brought on the need for NOW Foods to acquire SuperNutrition?
The NOW Foods president mentioned, “SuperNutrition sells to the same markets as NOW Foods in the US, yet we see many synergies for the global sales of the SuperNutrition brand. Our view is that SuperNutrition is under-served within the US, so we plan to significantly expand SuperNutrition’s sales within current markets, while pursuing markets beyond our current distribution channels. We absolutely will continue with all higher-end ingredients, while continuing to assure that the formulations meet our exacting standards. Many people would be surprised by how consistently NOW Foods chooses to pay more for better quality ingredients that meet label claims. For example, our selection of minerals is one area where NOW specs require minerals to be fully reacted and sourced from quality vendors. We currently use a significant number of expensive ingredients and trademarked products in the NOW brand products.”
Will We See More Brands Merging Versus Innovating?
This is just my own personal opinion, but I believe more brands in the next 12-24 months will merge or acquire other brands. The caveat will be that only the larger brands out there will be the ones shaking things up. Smaller brands will continue to be small or they, themselves, will sell to larger brands and exit.
I simply don’t see much excitement or innovation going on in the sports nutrition industry. When you look at brands like NOW Foods and SuperNutrition, they aren’t setting the world on fire with innovation or super-hyped products. In fact, both brands (dare I say) are quite boring, in my opinion.
It’s difficult to innovate with protein powders these days. Pre-workouts have gone the way of who can stuff the most stimulants in a serving, and while there are some new and interesting patented ingredients being included in supplements today, the world isn’t being set on fire by any of them. So, what can brands within the industry do if they aren’t willing to go out and try new things, do their own R&D to innovate, and separate themselves from other brands? It’s simple. Go buy brands who are doing well and who they can acquire and ultimately scale.
Did NOW Foodsneed to purchase SuperNutrition? Absolutely not. But they had some products and ingredients that NOW Foods found intriguing and being that they are in the same space decided to make a move to acquire them. Will it play out to NOW Foods’ advantage? Probably. But we will have to wait about a year to see how this whole transition plays out.
And interestingly enough, I believe that the acquisitions we are going to see over the next 12-24 months aren’t necessarily going to be other supplement brands merging or acquiring other supplement brands. I think that the recent moves of big players like Hershey and Simply Good Foods will start the movement of where big CPG brands will look to acquire supplement companies to expand their portfolio. They see the growth of the supplement industry and being that the functional food and beverage category is booming, it will fit nicely into some large CPG brands’ portfolios.
Source: NutraIngredients USA
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