Wednesday, February 12, 2014

Nestlé and L’Oréal - Skin deep


THE most interesting thing about Nestlé selling part of its stake in L’Oréal back to the cosmetics company is what it got in return: full control of Galderma, a Swiss maker of skin treatments.

Known for Kit Kat chocolate bars and Nespresso coffee capsules, Nestlé wants to be a provider of health as well as nutrition. With the L’Oréal deal it is becoming a food-pharmaceutical hybrid, a model that others are likely to follow as consumers age and fret more about their health.

It is not the only big food company on a health binge. Danone’s Activia yogurt is marketed as a cross between a treat and a therapy (though in Europe it is not allowed to make health claims for its “probiotic” cultures). PepsiCo’s quest to cut the sugar content of its product portfolio included an acquisition in 2010 of Russia’s Wimm-Bill-Dann Foods, a manufacturer of yogurt and other bone-building dairy products. Pepsi Special, which is sold in Japan, supposedly reduces fat absorption.