Coca-Cola dominates 2007 functional acquisitions

By Clarisse Douaud

- Last updated on GMT

Related tags: Supply chain, Nutrition, Sunopta

This year was characterized by larger mainstream food and beverage
companies moving into the value-added and functional business.

Probably the most telling acquisition for healthy ingredient manufacturers in 2007 was Coca-Cola's $4.1bn acquisition of Energy Brands, known as Glaceau, and its fortified water brands, including Vitaminwater. The beverage giant's move into functional drinks added credence to the trend, and should only further emphasize to healthy ingredients manufacturers that this is a trend not to be missed out on. Glaceau manufactures branded Vitaminwater, Smartwater, Fruitwater and Vitaminenergy - so-called lifestyle water and energy drinks. While Glaceau will continue to operate as a separate business entity from Coca-Cola North America, it will make use of its new parent company's supply chain, marketing power and foodservice. Another big name acquisition this year was Nestlé's acquisition of baby food brand Gerber. Nestlé has shifted gears of late and made it known it wants to be a nutrition, health and wellness company, and this move was hinged on such aspirations.​First announced in 2006, the sale - worth $5.5bn - was completed in 2007. Gerber claims to hold the number one position in the largest single baby food market, the US - thereby giving Nestlé Nutrition a lead into the sector. Nestlé had previously purchased medical foods specialist Novartis for $2.5bn. Closer to the health ingredients industry, the SunOpta natural food group has added numerous links to its acquisition chain this year. Most recently, in November, it purchased the Canadian company Neo-Nutritionals, which develops and manufactures a wide range of natural health products. SunOpta has been diversifying its focus and operations over the past few years, with a series of acquisitions, though it continues to underscore one primary objective: vertical integration of operations from ingredients to products. This is the case of the Neo-Nutritionals acquisition. Neo-Nutritionals manufactures tablets, capsules and powders to sell to branded natural health product companies and to private label companies. In the same year, health drivers motivated SunOpta to acquire two Mexican fruit processors to expand its fruit supply chain. ​Congeladora del Rio processes fruits including strawberries, peaches, mangos, bananas and melons into individually-quick frozen, block frozen and purees for the foodservice, industrial and retail markets. While the acquisition of Baja California Congelados is expected to add more than 20 million pounds of strawberries to SunOpta's supply chain by next year. Another international move was Glanbia's acquisition of Canadian nutritionals business, Pizzey's Milling. The deal marks the international dairy and nutritional ingredients group into the North American omega-3 market. The Irish-based firm is looking to tap into the omega-3 market, specifically towards use in functional foods. Manitoba-headquartered Pizzey's mills flaxseeds for lignans and omega-3, but has now added fish oil into the mix for its added benefits. Not all acquisitions were of companies though. Soy ingredient supplier Solae this year completed its acquisition of Cargill's popular Prolisse isolated soy protein line. The acquisition, for an undisclosed sum, includes the patented membrane technology for producing isolated soy protein (ISP). According to Solae, this will enable the firm to offer a wider range of products and innovation to its customers. Cargill first introduced its Prolisse soy isolates in 2002, marketed at the time as a "breakthrough in taste"​ that allowed manufacturers to create more consumer-friendly yet healthy soy foods.

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