Nestle completes Gerber aquisition

Whispers of the purchase of the infant formula manufacturer by the world's food giant were confirmed in January, but the sale has only been effective September as the regulatory process wrapped up. Nestlé has been vocal about its intentions to move into the health and wellness arena and the acquisition of Gerber - which claims to hold the number one position in the largest single baby food market, the US - has edged Nestlé Nutrition forward to lead the sector. In April, the Swiss firm announced a deal to acquire Gerber worth $5.5bn, following closely on the heels of the purchase of Australian cereal business Uncle Toby's. As well, the company soared into the top of the medical foods market in July with the purchase of Novartis for $2.5bn. The firm initially announced its interest in December, after months of speculation it was eyeing up the unit as a springboard from a minor player in the medical foods market to the number two position. The acquisition of Gerber is transforming Nestlé Nutrition into a business approaching CHF 10 billion in sales and access to the specialist group's global research and development network. The integration of Gerber into Nestlé's business will now begin, with the 4,500 Gerber employees, joining the Group. In an address to attendees at the IFT Expo in Chicago recently, Matthew Roberts - of Nestlé's corporate venture funds acquisitions and business development - said the company currently spends 1.7 percent of its revenue on research and development efforts. This amount to $1.7bn a year, of which Roberts indicated a significant amount is spent on nutrition and wellness. The food super company still has its eye open for external innovation. "If you have an innovation, a technology or a business model that works with health and wellness then come and see us - we're interested in it,"​ said Roberts at the presentation.​​This is not the first move into infant and baby products for Nestlé, which announced in December it entered into an exclusive agreement with a Danish biotech company for research and development into the use of human milk oligosaccharides (HMO) in infant nutrition products. HMOs, found in human breast milk but not in cow's milk, are understood to help boost the body's natural defence and aid development. There is a general trend towards fortification of infant nutrition with nutrients that are as close as possible to those found in breast milk. In particular, omega-3 is now frequently added to formulas. Probiotics from human breast milk have been developed by Swedish company BioGaia and Spain's Puleva, and are already used in supplements and children's food products respectively. While the first few products containing prebiotics from plant sources have appeared on the market, with more believed to be in development, Nestlé said that the use of HMOs in infant nutrition is not yet commercially viable. If the three-year programme yields successful results it would give Nestlé a significant advantage in the sector. Nestlé also recently announced its launch of a formula with probiotic Bifidobacterium lactis​, BIFIDUS BL, in the US. It claimed Good Start Natural Cultures is the first US infant formula to contain probiotics for immune system support.