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Hormel Foods sells its Health Labs brands to Lyons Magnus

Hormel Foods has confirmed the sale of its Hormel Health Labs division to Lyons Magnus, creating Lyons Health Labs. The strategic move aims to better position Lyons Magnus as a leading player in the growing US market for nutritional and health products.

California-based Lyons Magnus, part of the Paine Schwartz company portfolio, has now completed the acquisition of the brands associated with the food processing company, which include Ready Care, Thick & Easy, Vital Cuisine, Med Pass, 2.0, Mighty Shakes and Magic Cup.

The brands are focused on the nutritional and healthy products category for dysphagia, unintended weight loss, digestive health and hydration – which fall under the umbrella of Food for Special Medical Purposes (FSMP).

Lyons Magnus will not change the brand names

Lyons Magnus says that the acquired Hormel brands will remain on the market, only rebranded under the Lyons Health Labs banner. The newly forged business Lyons Health Labs will be headquartered in Fresno, California, and operate as a business unit of Lyons Magnus.

“With the addition of Hormel Health Labs to our innovative nutrition and health business, we are entering the next phase in our journey to evolve and grow our core businesses,” Jim Davis, CEO of Lyons Magnus explained.

“The combination of both companies’ broad portfolio of products, resources, capacity, and people immediately establishes Lyons Health Labs as a health and nutrition leader, poised to meet the needs of today’s foodservice operators and also be a major player in tomorrow’s innovations.”

Market for FSMPs continues to show growth potential

Worldwide, the growing geriatric population is playing a significant part in the demand for food for special medical purposes, also referred to as FSMPS.

Another important element is the increasing adoption, from consumers, of fast foods and ultra-processed foods. This has led to an explosion in obesity rates, causing elevated instances of related conditions such as diabetes, heart disease, liver disease, and certain cancers.

The US has one of the highest rates of obesity of all the major economic powers, with the Centers for Disease Control and Prevention (CDC) currently estimating that more than 40% of the US population is living with obesity. The CDC also estimates that these elevated obesity rates account for more than $173 billion in annual medical expenses.

The rising geriatric population and obesity rates in the US have led to a huge spike in related medical conditions, which has also triggered a significant increase in demand for FSMPs. According to Precedence Research, the North American market for medical foods was estimated to be worth $7.75 bn in 2023, and is expected to grow to $12.45 bn by 2033.

Hormel Foods divests on the back of modernisation initiative

Hormel Foods decision to exit an area of the food and beverage industry that has been showing strong growth in recent years comes as part of its transformation and modernisation initiative, which aims to focus the business on its core strengths while investing in manufacturing and supply chain efficiencies.

One of those core strengths is its foodservice business, which has focused on growing and expanding its leadership position in recent years. In this area, it has a particularly strong presence in processed meats, particularly with brands such as Bacon 1 and Jenny-O turkey products.

In addition, the business has also been focused on expanding its global footprint, particularly in Asia, where China and South Korea have attributed significant growth to its business footprint in the region.

The company has also been investing in supply chain modernisation, including implementing a new end-to-end planning process and technologies, as well as enhancements to its manufacturing and production facilities that aim to improve efficiencies and save costs.