- Nestle USA acquired Sweet Earth, a plant-based foods manufacturer based in California with nearly 50 products, including Harmless Ham and Benevolent Bacon. Sweet Earth’s portfolio spans all meal occasions, diversifying Nestle’s offerings beyond meals and snacks, the company said in a statement.
- Nestle, the world's largest food company, did not disclose the purchase price. Sweet Earth will continue to be run by its founders and will remain independent with support from Nestle.
- “In the United States, we’re experiencing a consumer shift toward plant-based proteins," Paul Grimwood, Nestle USA's chairman and CEO, said in the statement. “One of Nestle’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends. With unique and nutritious food for all times of the day, Sweet Earth gives Nestle a leading position in this emerging space.”
While Nestle is better known for its staple brands including Hot Pockets, Stouffers and Dreyer's, this purchase gives it an immediate and large presence in the plant-based segment, and expands its portfolio of healthier, more natural products that are in demand with consumers.
Demand for plant-based product development has spiked by close to 140%, Nellson, a manufacturer specializing in the production of bars, beverages and powders, said recently. And HealthFocus estimates 17% of U.S. consumers aged 15 to 70 claim to eat a predominately plant-based diet, while 60% report to be cutting back on meat-based products. Nestle says plant-based foods are growing by double digits and are expected to become a $5 billion market in the U.S. by 2020.
Sweet Earth, which makes frozen meals, burritos, breakfast sandwiches and chilled plant-based burgers and proteins, uses ingredients such as seitan, tofu, lentils, chickpeas and beans. Its products are sold in more than 10,000 stores, including independent natural grocers, Whole Foods, Target, Kroger and Walmart. The Associated Press reported Sweet Earth posted $25 million in revenue last year. With cash-rich Nestle's global marketing and distribution reach, the company should gain an even bigger presence in the frozen food aisle.
“Our products meet the demands of flavor-forward consumers who want more plant-based foods, especially millennials who want convenient, real food and flexitarians who are looking to include more vegetables and plant-based proteins in their diet,” Kelly Swette, Sweet Earth's CEO, said in a statement. “Nestle’s acquisition validates what forward-thinking consumers and retailers have been demanding for a while — more wholesome and sustainable choices.”
Food manufactures continue to battle changing consumer tastes as shoppers abandon processed, center-of-the-store products in favor of those that are organic, natural and contain a slimmed-down roster of recognizable ingredients. Nestle isn't the first major company to venture into the plant-based segment. Last year, meat-processing giant Tyson Foods acquired a 5% stake in Beyond Meat, which uses non-meat protein sources such as soy and pea to create meat-like products.
Nestle, which has set its sights on nutrition, health and wellness, has not been afraid to enter fast-growing markets where it doesn't have a presence. In June, it was the main investor in the $77 million round of new funding in Freshly, a meal kit startup.
For Nestle and other manufacturers, foods derived from plants represent a niche they can't afford to ignore. It only makes sense for them to purchase or take equity interests in companies that have experience working in the space and are already well-known and popular with consumers.