Nestlé gobbles up US diet company

Fighting the flab: Nestlé enters the weight-loss market swissinfo.ch

Nestlé has bought US diet firm Jenny Craig for $600 million to enter the weight-loss market and add to its nutrition and health business.

The world’s biggest food producer said in a statement on Monday that it had agreed to purchase the weight-loss company to reinforce Nestlé Nutrition’s presence in the United States, the world’s largest nutrition and weight management market.

The California-based company, which had sales of over $400 million in the last 12 months, was founded in 1983 by weight-loss guru Jenny Craig, offering dieters prepared meals and exercise programmes.

“The rise of obesity and the resulting metabolic disorders, such as diabetes and cardiovascular disease, is a major public health concern, not only in the US, but also the world over,” said Peter Brabeck, Nestlé’s Chief Executive Officer.

“The Jenny Craig acquisition puts us in a privileged position to help many of our consumers.”

Watching waistlines

The company claims to have provided services to over ten million clients worldwide since 1983, with over 120,000 people following a personalised programme each week.

Its turnaround in recent years has been partly due to an irreverent advertising campaign following the slimming waistline of Kirstie Alley of “Cheers” fame.

Nestlé announced that the current Jenny Craig management team will remain in office and will report to Nestlé’s Nutrition division.

The Vevey-based company, which already has a global presence in infant nutrition, healthcare nutrition and performance nutrition, is looking to establish weight management as a new pillar of the group’s nutrition business.

The acquisition follows on from Nestlé’s purchase of Australia’s Uncle Toby’s snacks, breakfast and soup’s business in May, making Nestlé the number one in Australia’s nutritious snacks market and number two in instant soups.

The Swiss food giant said it bought the weight-loss company from a private equity group including ACI Capital and MidOcean Partners, adding that the deal would not dilute group earnings.

swissinfo with agencies

In brief

Nestlé was founded in 1866 by Henri Nestlé and is today the world’s biggest food and beverage company.

The company employs around 247,000 people and has factories or operations in almost every country in the world.

In 2005 Nestlé reported a net profit of SFr7.995 billion ($6.1 billion) for 2005, up 20.8 per cent on the previous year.

Nestlé’s Nutrition unit is currently built around three businesses: infant nutrition, healthcare nutrition and performance nutrition, which provide baby foods and milks, powerbars and a series of nutritionally enriched products, especially for the elderly.