The food giant announced on Feb. 2 that its Nestlé Health Science subsidiary, in operation for only a month, had acquired CM&D Pharma, a U.K.-based pharmaceutical startup that works on developing foods for special medical purposes, including a chewing gum for kidney-disease patients. Nestlé had been an investor in the company before buying it.
Nestlé had announced the creation of Nestlé Health Science last fall and said it would also invest over $500 million over 10 years in a new Nestlé Institute of Health Sciences to develop “personalized health science nutrition” to claim the space between the food and pharma industries.
“The combination of health economics, changing demographics and advances in health science show that our existing healthcare systems, which focus on treating sick people, are not sustainable and need redesigning. Nestlé has the expertise, the science, the resources and the organization to play a major role in seeking alternative solutions. Personalized health science nutrition is about finding efficient and cost-effective ways to prevent and treat acute and chronic diseases in the 21st century,” said Nestlé Chairman Peter Brabeck-Letmathe at the time of the announcement.
However, Nestlé is not new in the field of how nutrition affects health. It first entered health-care nutrition in the late ‘80s and over the last three years, it has made a number of acquisitions in this area, including Vitaflo and Novartis Medical Nutrition, which Nestlé acquired for $2.5 billion in 2007. The enterprises acquired from Novartis currently make up most of the business of Nestlé Health Science.
You Are What You Eat
The science of medical nutrition looks to be a promising field in light of the aging of baby boomers and the threat of a health-care crisis as they succumb to the infirmities of old age. Boomers are more interested than previous older generations in finding alternatives to drugs for health treatments. They are also seeking ways to prevent diseases from developing in the first place. While good general nutrition has long been prescribed as a way to stay healthy and prevent disease, with its Health Science initiative, Nestlé is looking to offer scientific proof about foods’ effects.
Another trend that is making food as medicine a hot topic is the rising obesity rate in developed countries, particularly in the United States, where one in four people are obese. U.S. First Lady Michelle Obama has led a strong campaign against childhood obesity in particular this year.
From Candy Maker to Cancer Fighter?
Nestlé is clearly serious about investing its resources into the future of medical foods, but will consumers take it seriously when a maker of chocolate milk and candy bars offers a product that promises to improve their health?
Not to mention that regulators, especially in the U.S., have been skeptical about health claims for foods, with recent instances of food brands getting slapped down for making health claims. Dannon, for instance, agreed to pay $21 million to settle U.S. Federal Trade Commission charges that it made exaggerated claims that its yogurt products could relieve constipation or reduce the likelihood of getting a cold or flu.
To combat these issues, Nestlé is keeping it very clear that the medical-foods operations are entirely separate from its main foods business. Rather than portraying these as retail-oriented enterprises, Nestlé is emphasizing their scientific endeavors.
"If there's one important thing in anything that we're doing, it's scientific credibility," Luis Cantarell, CEO of Nestlé Health Science, told The Wall Street Journal.
And Nestlé is ramping up the publicity for its medical food endeavors. It recently announced that its researchers are working on new types of foods that make people feel full faster so that they don’t overeat. While products using this research are at least five years away, the announcement received plenty of coverage from outlets ranging from Time to the The Colbert Report.
Small wonder. Food companies haven’t made much headway on foods that prevent obesity – remember Olestra? – and a product that you could eat to make sure you don’t overeat could be a holy grail in the public and personal fight against obesity.
Although it is a successful CPG company, Nestlé is looking to do business beyond tasty or even good-for-you snacks. It’s looking to help create – and capitalize upon – a whole new future in food.