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Danone Acquires Royal Numico

By Joanna Cosgrove | July 1, 2007

The French company strengthens its health and nutrition market presence.

Danone Acquires Royal Numico

The French company strengthens its health and nutrition market presence.

Joanna Cosgrove
Online Editor

After dodging rumors for at least the last four years, Groupe Danone S.A, the French dairy, water and baked goods giant, shelled out nearly $17 billion to acquire Royal Numico N.V., the Dutch baby food and clinical nutrition products manufacturer. The deal gives Danone a decisive market stronghold in the areas of health and nutrition.

Numico’s strength in the infant nutrition segment will no doubt boost Danone’s sizable dairy market presence. Numico’s clinical nutrition prowess was also a highly attractive aspect as well. What makes this business deal even more interesting is the fact that Danone has opened exclusive talks to sell its biscuit and cereal division to Kraft Foods, a move that will enable the company to further sharpen its business focus on the ever profitable health and nutrition segments.

The future of the biscuit and cereal divestiture is still unknown, but what is certain is that the Danone expects its most recent Numico purchase to solidify its position as the world leader in health and nutrition “across all stages of life.” As explained by Danone’s press dossier, “Danone has a unique expertise in the nutrition field, developed through years of leadership with brands such as Activia, Actimel, Danonino, Evian and Blédina, built through deep consumer understanding, strong innovation and consistent communication, reaching millions of consumers across the world every day.”

Numico’s success in healthy baby food and healthcare nutrition spans a wide consumer demographic from birth through late in life. “Healthy baby food is the starting point for a healthy life. By reaching out to infants and toddlers, Danone will fill its major demographic gap,” the company said. “HealthCare Nutrition products are key to address medical malnutrition, help sick people manage their condition in specific disease areas, and to support others with special nutrition needs.”

Danone asserted that now is the right time to become established in the healthcare nutrition area for five reasons: an aging population, escalating healthcare costs, wider screening and diagnosis of disease, and growing scientific and medical awareness of the importance of nutrition to health.

Numico is firmly established in the realm of Oral, Tube, Targeted and Special Needs Nutrition categories. The company’s Oral Nutrition brands, Nutridrink, Fortimel and Fortisip, are distributed in hospitals, care institutions and to the sick and elderly at home to combat “medical malnutrition.” The company’s top Tube Nutrition brand is Nutrison.

In its Targeted Nutrition category, Numico is the European leader in pediatric nutrition for sick children and babies with the brands Infatrini and Nutrini. Diasip and Diason are brands for children with pediatric diabetics, while FortiCare is formulated for pediatric oncology patients.

Numico’s Special Needs Nutrition category is divided into two Allergy and Metabolics subdivisions and is targeted toward highly specialized patient groups, especially those with neo-natal or childhood cow’s milk allergies, or those with lifelong metabolic disorders. The company’s most notable Special Needs allergy brand is Neocate, while its most well known Metabolics brand is Lophlex LQ.

In terms of an initial business plan, Danone will “ensure that Numico’s long-term growth is maintained and enhanced” by organizing Blédina under Numico, and Danone will leverage its R&D in probiotics and ferments into baby food and combine it with Numico’s prebiotics expertise.

Numico enjoys Baby Food leadership positions around the world. It is number one in Western Europe and Eastern Europe, number two in Asia and number three in Australasia, Africa and the Middle East.

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