UPDATE: April 7, 2021: Nestlé Waters North America was renamed BlueTriton Brands following its acquisition by One Rock Capital Partners and Metropoulos & Co. last month.
UPDATE: March 31, 2021: One Rock Capital Partners completed its acquisition of Nestlé Waters North America. Dean Metropoulos has been appointed chairman and its interim chief executive officer.
- Nestlé is selling its North American bottled water business, including brands such as Poland Spring, Deer Park and Pure Life, to private-equity firms One Rock Capital Partners and Metropoulos & Co. for $4.3 billion, the parties said in a statement.
- In a separate release announcing the deal, Nestlé CEO Mark Schneider said the sale will better position his company's global waters business for long-term profitable growth. Schneider said Nestlé would focus on its international premium brands like Perrier and San Pellegrino, local natural mineral waters, healthy hydration products and functional water. The company’s North American water business, which excludes the brands not being sold, had sales of roughly $3.8 billion (3.4 billion Swiss francs) in 2019.
- The sale comes as Nestlé continues to overhaul its portfolio to focus on nutrition, health and wellness or high-growth categories, while jettisoning areas that are slow-growing or where the company doesn't have a No. 1 or No. 2 position in the category.
For Nestlé, the past few years have seen the world's largest food company dramatically overhaul its portfolio with a barrage of deals. The transactions have transformed it into a faster-growing operation that prioritizes categories like plant based and nutrition.
In early 2020, Nestlé has sold its U.S. ice cream business, including brands like Edy's, Häagen-Dazs and Drumstick, to Froneri, an ice-cream-focused joint venture the Swiss company created in 2016 with PAI Partners. The deal then valued the business at $4 billion. In 2018, Nestlé sold its U.S. chocolate business with products like Butterfinger and Baby Ruth to Ferrero for $2.8 billion.
With billions of dollars in cash in its pocket, Nestlé has invested in plant-based foods, bulked up its bottled coffee business, and added Freshly, provider of fresh-prepared meal delivery services in the U.S. The company also purchased Aimmune Therapeutics, a biopharmaceutical company that makes a peanut-allergy treatment, for $2.6 billion. Finally, Nestlé bought a maker of collagen bars, beverages, capsules and powders; a personalized vitamin company; and a maker of nutritional health products.
Switzerland-based Nestlé has not been quiet about the fact it is moving aggressively in cultivating growth, and the sale of its North American waters business is further evidence this remains a key priority. The bottled water segment is incredibly competitive with scores of big-name and private-label brands. And while bottled water remains popular, it has long been dogged by sustainability questions when it comes to its plastic packaging.
The company is not giving up on water altogether and will continue to invest in premium waters, natural mineral waters and functional waters for consumers who are willing to pay up to purchase them. The focus also gives Nestlé a way to differentiate itself in waters while still remaining a prominent player in the category.
In acquiring Nestlé's North American water business, Metropoulos brings experience reinvigorating numerous food and beverage brands, including Hostess Brands and Pabst Brewing. Metropoulos has successfully invested in and increased marketing at these firms before exiting the businesses later on. It will likely look to reinvigorate the water brands it is purchasing with One Rock, although any effort to separate them from other waters in the market could ultimately put them in direct competition with Nestlé's remaining premium offerings.