Nestle SA (VTX:NESN) (ETR:NESR) is nothing short of a giant when it comes to food companies. The Swiss firm seems to have holdings over the entire spectrum of food. These include, but are not limited to: KitKat chocolate bars, Häagen-Dazs ice cream, Nespresso coffee, Lean Cuisine frozen food and Purina dog and cat food.
The company has, however, appeared to be slimming down a la the portioned Jenny Craig lunches and dinners the company makes for those on a diet. In the last few months, they have sold Peters Ice Cream, an Australian brand, to a private equity firm in June and the Carola and Val Saint Lambert bottled water brands in France in July.
Nestle retained Goldman Sachs to look at sale of Jenny Craig
It’s now being reported that Nestle has retained Goldman Sachs Group Inc (NYSE:GS) to look at a possible sale of Jenny Craig. This comes after recent comments from Nestlé’s chief executive, Paul Bulcke, that the company planned to divest more of its underperforming businesses.
“Divestitures, we’re going to have some,” Mr. Bulcke told an analyst in a presentation last week.
Nestle SA (VTX:NESN) (ETR:NESR) purchased Jennie Craig seven years ago for around $600 million from a pair of private equity firms. In addition to its portioned food business, Nestle also acquired the other portion of the company that tailors weight-loss programs for consumers, offering telephone and in-store consultations for a fee. The acquisition came after a long-running auction and five years after Jenny and Sid Craig sold to a Deutsch Bank spinoff for $115 million.
Powerbar line was up for sale
At the time of its Jenny Craig purchase, Nestle SA (VTX:NESN) (ETR:NESR) was also concentrating on its Powerbar line as well as Gerber baby food. Last month, Reuters reported that the Powerbar line was up for sale.
“We are business people. We want to do business, not get rid of business,” Mr. Bulcke said. “But there are certain things that we don’t see that we can fix.”
While that is all well and good for a company of Nestle SA (VTX:NESN) (ETR:NESR)’s size, Mr. Bulcke may wish that he showed a bit more discretion when he spoke the words above in an investor meeting last week. It’s a touch tougher to sell something that you are essentially calling broken. It’s also possible that Americans no longer need Jenny Craig with so many healthy alternatives dominating America’s fast fresh sector.