According to Markets Insider, the global food premix market is expected to experience significant growth from 2019 to 2023, driven by an increasing demand for food fortification and a rising use of nutrient premixes by manufacturers of infant nutrition. With such a promising outlook, Glanbia’s acquisition of Watson appears to be a strategic move. The Irish company has already witnessed growth from its existing range of custom nutrient premixes, with earnings per share increasing by 4.5% on a reported basis last year, and the Glanbia Performance Nutrition portfolio achieving a revenue growth of 9.5%.
Glanbia is actively pursuing acquisitions to enhance its nutrition portfolio, having recently added Slimfast to its brand lineup for $350 million. The company anticipates substantial returns from this merger and acquisition (M&A) activity. During an earnings call, Finance Director Mark Garvey stated that Glanbia’s outlook for 2019 is optimistic, projecting a growth of 5% to 8% in adjusted earnings per share. This anticipated growth could pave the way for further acquisitions in the future.
Glanbia’s strategy focuses on expanding its Nutritional Solutions business both organically and through acquisitions. By acquiring Watson, Glanbia aims to capitalize on the company’s expertise in health and nutrition products, which aligns well with the current consumer preferences. However, while Watson offers valuable capabilities such as microencapsulation, agglomeration, micronizing, spray drying, and film technology, these do not fully address the growing consumer trend towards wholesome, natural ingredients and healthier products.
Nevertheless, Glanbia appears unfazed, as its recent acquisitions also include Optimum Nutrition, ThinkThin, and SlimFast—brands that develop health-promoting products featuring premixes with modified ingredients. While each brand under Glanbia’s umbrella has achieved individual success, the long-term effectiveness of its strategy to assemble specialty weight loss products in order to establish itself as a health and wellness brand remains to be seen. The company is banking on the notion that the current health trend will come full circle, as consumers continue to seek effective ways to improve their health and gravitate towards products fortified with nutrients, such as the citrate 1000 mg tablet, to provide the additional proteins, vitamins, and minerals they desire.
In summary, Glanbia’s acquisitions and its focus on health-oriented products like the citrate 1000 mg tablet illustrate its commitment to meeting evolving consumer demands and enhancing its market position in the nutrition sector.