Is Nestlé looking to divest its Powerbar sports nutrition brand?

By Elaine WATSON and Hank Schultz

- Last updated on GMT

Nestlé  said in August that it was “actively looking” at its portfolio to weed out poor performers after posting its weakest quarterly revenue growth in four years
Nestlé said in August that it was “actively looking” at its portfolio to weed out poor performers after posting its weakest quarterly revenue growth in four years

Related tags Nestlé Nutrition

Nestle has declined to comment on a report in Reuters suggesting that it is looking to divest its PowerBar brand.

Citing “four people familiar with the matter” ​Reuters said the sale could fetch several hundred million dollars.

Nestlé - which told us that “as a matter of principle, we do not comment on market rumors”​ - said in August that it was “actively looking​” at its portfolio to weed out poor performers after posting its weakest quarterly revenue growth in four years.

Its comments prompted speculation that it might sell brands such as Jenny Craig diet centers, Lean Cuisine frozen meals, Powerbar, and some regional bottled water brands such as Arrowhead and Deer Park.

Nestle CEO: For each under-performing business, ‘you bring it into acceptable terms and you have a timeline for that, or you sell it off’

The Switzerland-based food giant - which blamed a deceleration in emerging markets, lackluster sales in Europe and poor performances from diet products, water and frozen entrees for its recent weak performance - bought Powerbar in 2000 for an undisclosed sum.

The brand - which one of the sources told Reuters generates about $175m in revenue - was founded by Canadian athlete and entrepreneur Brian Maxwell, and now includes energy bars, sports drinks, gels and protein supplements.

Consumer research suggests shoppers associate Powerbar with energy, but rank it poorly on 'liking' scale

Powerbar more or less invented the energy bar category and stuck with its original, taffy-like formulation for a long time. 

But the brand has since been overtaken by competing products seen as more palatable by consumers, Oregon-based consumer research group InsightsNow told delegates at the Food Evolution summit in Arizona last week.

In a recent case study on energy bars conducted by InsightsNow, Powerbar was ranked high by consumers in terms of its perceived energy delivery qualities but was ranked last on the liking scale, InsightsNow founder Dr Dave Lundahl told FoodNavigator-USA.

Dave Lundahl InsightsNow
Dave Lundahl: Powerbar was ranked high by consumers in terms of its perceived energy delivery qualities but was ranked last on the liking scale

We're talking surgery, not amputation

In an interview​ with Bloomberg in August about how Nestlé might go about deciding which brands to prune, Thomas Russo, a partner at Gardner Russo & Gardner and a Nestle investor since 1987, said: “We’re talking surgery, not amputation.

"They allocate capital to businesses with high-return prospects, and you would think that those starved of capital would end up being potentially available for sale. I would support that.”

For each under-performing business, “you bring it into acceptable terms and you have a timeline for that, or you sell it off,”​ Nestlé CEO Paul Bulcke told investors in March.  

Related topics Manufacturers Healthy Foods Snacks

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1 comment

Quality decline in Nestle Lean Cuisine

Posted by Leigh,

I purchased a Lean Cuisine meal and was appalled at the difference between the photo on the packaging and the actual meal. It was so bad that it's basis for a class action fraud case. There is no doubt that Nestle is declining quickly in quality, not usually expected from a Swiss-owned company. Looks like they are cutting losses.

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