SUBSCRIBE

Breaking News on Supplements & Nutrition - North AmericaEU edition

News > Manufacturers

Reckitt Benckiser-Schiff: Another giant jumps into nutra space

By Shane Starling+

22-Nov-2012

Schiff MegaRed krill supplement marketing
Schiff MegaRed krill supplement marketing

UK-based consumer goods firm Reckitt Benckiser told NutraIngredients today, “nutrition had been on its radar for awhile”, as it plunged $1.4bn (€1.09bn) to outbid German pharma firm Bayer for the US’s second biggest dietary supplements firm, Schiff Nutrition International.

The deal has until December 14 to complete, but Reckitt Benckiser senior vice president of corporate affairs, Andraea Dawson, said it was safe to say it was a done thing as two shareholders who owned 85% of Schiff had agreed the deal. Only another 5% was needed.

Dawson said the UK firm had a strategy to move into nutrition, “as consumers increasingly self-medicate.”

“That is a key part of how consumers want to manage their health and wellness.”

The deal follows others like Pfizer buying Danish supplements firm Ferrosan for an undisclosed amount in February 2011 although Pfizer did this year sell its infant nutrition business to Nestlé, pending anti-trust approval.

“see how this goes first”

Reckitt Benckiser made the offer from cash reserves. Dawson said the firm had a strong balance sheet and that the firm had further reserves available for other acquisitions, although it would, “see how this goes first”.

Dawson said her firm wanted to expand Schiff’s brand presence in the US and had an eye on global markets too.

As to why the company chose Schiff to invest in, Dawson noted a highly fragmented landscape where no single player commands more than 5% of the global market share. Other major brands include Solgar, Centrum, Pharmavite, Herbalife, Nature’s Own and Seven Seas.

Utah-based Schiff had revenue of $259m (€200m) for its fiscal year ended May 31, 2012 and does 90% of its business in the US with brands like krill omega-3 offering, MegaRed; glucosamine joint health product Move Free; and immunity supplement, Airborne.

It has forecast growth above 40% for 2013 to $385m (€299m) with EBITDA at $84.6m (€65.7m).

Reckitt Benckiser has in its portfolio health brands like Mucinex, Durex, Nurofen and Strepsils and hygiene brands like Clearasil, Harpic and Mortein. It had revenues of about €11.75bn in 2011, up 13% on 2010. Net income grew 11% to €2.24bn.

Rakesh Kapoor, Reckitt Benckiser chief executive officer, said : "We are very pleased to have reached a mutually beneficial agreement with Schiff and are excited to enter the $30 billion ( global vitamins, minerals and supplements market with such a strong portfolio of high quality branded business in the USA.

"The sub-categories within which Schiff operates have strong growth momentum and to this we expect to combine Reckitt Benckiser's strong go to market capabilities as well as proven skills in branding, innovation and consumer communication and education."

The global food supplements market is worth €36bn in 2011, according to Euromonitor International.

Related products

Key Industry Events

 

Access all events listing

Our events, Events from partners...