This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- Hormel Foods has sold its Heath Labs business to Lyons Magnus, a global foodservice and ingredients manufacturer. The price has not been disclosed.
- Heath Labs produces hundreds of products for consumers treating dysphagia, malnutrition, diabetes, wound healing, sodium restriction and cancer treatment. “The business is very strong and can grow with the right partners,” the packaged food company said in a statement to Food Dive.
- The sale comes as Hormel and other food manufacturers shift their portfolios to focus on their core brands and position their businesses for higher growth.
Dive Insights:
With most of its $12 billion in annual revenue coming from household staples like Spam, Skippy peanut butter and Jennie-O turkey, Health Labs may have been a small financial contributor to the Minnesota-based company. Selling the division will allow Hormel to focus on the remaining operations and invest the proceeds it received for Health Labs back into the business.
Although Health Labs offers similar nutrition to Hormel’s other products, there can be many differences between them. They use a variety of innovations and marketing methods while serving a variety of customers, from grocery stores to hospitals. Lyons is combining Health Labs with its existing nutrition and wellness portfolio to provide additional scale and other benefits that come with a larger unit.
Even though Hormel is selling its health business, other large food companies, including Nestlé and Danone, remain in the nutritional therapy and medical foods space. This multi-billion market will continue to thrive as consumers face special nutritional requirements or seek needs that cannot be found in traditional, everyday foods.
