Dive Brief:
- Hormel Foods sold its Heath Labs business to Lyons Magnus, a global foodservice and ingredient maker. The price was not disclosed.
- Heath Labs produces hundreds of products for consumers facing dysphagia, malnutrition, diabetes, wound healing, sodium restrictions and undergoing cancer treatment. The packaged goods company said in a statement to Food Dive that “the business is very solid and can grow with the right partner.”
- The sale comes as Hormel and other food manufacturers make changes to their portfolios to focus on their core brands and position their businesses for higher growth.
Dive Insight:
With most of its $12 billion in annual revenue coming from household staples such as Spam, Skippy peanut butter and Jennie-O turkey, Health Labs was likely a small financial contributor for the Minnesota-based company. Selling the division allows Hormel to focus on the rest of its operations and invest whatever proceeds it receives for Health Labs back into its business.
While Health Labs provides nourishment similar to Hormel’s other products, there are likely a lot of differences between them. They employ different ways of innovating and marketing, while serving different customers ranging from grocery stores to hospitals. Lyons is combining Health Labs with its existing nutrition and health portfolio, enabling it to have added scale and other benefits that come from a bigger unit.
Even as Hormel sells its health business, other large food companies remain in nutritional therapy and medical foods, including Nestlé and Danone. The multi-billion market should continue to thrive as consumers face special nutritional requirements or look for needs not found in conventional everyday foods.
