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Nestlé divests mainstream VMS business: 'It's a logical piece of portfolio surgery'

Nestlé is to sell its mainstream vitamin, mineral, and supplement (VMS) business for $1 billion – a logical move away from “the unprofitable middle” of this category, say experts.

The Swiss food and drink major will sell its mainstream VMS business to US private equity firm Yellow Wood Partners for US$1bn in a deal set to close by the first half of 2027.

At a glance:

• Nestlé is divesting its vitamins, minerals and supplements (VMS) mainstream business to US private equity firm Yellow Wood Partners for US$1bn.
• Experts say the deal offloads an unprofitable part of Nestlé's VMS portfolio – the undifferentiated middle.
• Future M&A activity is expected elsewhere as VMS brands work to stay competitive and align with fast-evolving consumer needs.

The move sees Nestlé divest seven established brands – Nature's Bounty, Osteo Bi-Flex, Ester-C, Gard, Nuun, Puritan's Pride and Sisu – along with its US private-label supplements business which includes all manufacturing, packaging, warehousing, and distribution operations.

Philipp Navratil, CEO of Nestlé, said the divestment will enable the company to refocus on areas where it has more competitive advantage. “With Nestlé's strong innovation and brand-building capabilities, we are well positioned for growth in the premium, science-led VMS space, where brands such as Solgar and Pure Encapsulations continue to perform strongly. At the same time, the category has evolved, and the mainstream VMS business requires a different approach under dedicated ownership,” Navratil said.

Offloading the “undifferentiated middle”

Speaking to Ingredients Network, Nick Stene, senior global insight manager for consumer health at Euromonitor International, said the deal makes sense in the fast-evolving US$154.5 billion global VMS market.

“It's a logical piece of portfolio surgery, not a retreat,” Stene said. “Nestlé is selling the mainstream, price-fought end of its VMS portfolio while holding onto its premium, science-led brands like Pure Encapsulations, Solgar, and Garden of Life. That tells you exactly where the value is migrating, and where it isn't.”

The “mainstream middle” part of global supplements, he said, is the hardest place to make money right now. Instead, growth and opportunity are “concentrated at two ends of a barbell” – in premium, clinically-backed, and digital-native. “The undifferentiated middle is being hollowed out. A generalist multivitamin with no clear reason to exist is now a structurally challenged asset.”

Today, Stene said consumers are focused on targeted, condition-led dietary supplement formats like magnesium, omega-3s and heart-health actives versus “broad insurance multivitamins”. They are also looking for proof, not presence, and discovery has moved from the pharmacy shelf to content and social commerce, he said. On top of this, the affordability squeeze has lifted the value of private label vitamins, minerals, and supplements.

Product saturation is a challenge for supplement shoppers

According to Mintel, consumers are also increasingly seeking personalised VMS products, with interest rising around AI-driven personalised vitamins.

“This demand for tailored products reflects a broader shift toward health span optimisation over lifespan extension,” said Rebecca Walters, director of wellness insights at Mintel.

Transparency in ingredients and benefits is also a “critical factor for consumers” today in the VMS space, Walters said. And in the US – where the majority of Nestlé's mainstream VMS business is – she said product saturation remains a significant challenge for companies and consumers, so differentiation is key. “Brands must innovate and effectively communicate unique benefits to maintain a competitive advantage.”

Expect more M&A in the vitamin space

Euromonitor’s Stene said that given the evolution of the VMS category and strains in staying competitive, the industry can certainly expect more mergers and acquisitions.

“The data strongly suggests we should expect [M&A activity] to accelerate,” he said, particularly as smaller companies continue to take share away from global VMS leaders. “The conglomerate advantage is scale and distribution; the specialist advantage is speed and credibility, and right now the market is paying for speed and credibility,” he explained. “Incumbents increasingly need to buy the digital-native and personalisation-strong brands they can't build fast enough, while shedding low-growth mainstream lines.”

Looking ahead, future M&A activity will likely see companies acquiring “premium bolt-ons” and carving away mainstream aspects of portfolios, he said, and companies able to move quickly on focused business – in science, formats and creator-led marketing – will be rewarded.

“2026 is the year the [VMS] category stopped rewarding presence and started rewarding proof. The winners – whoever owns them – will be the brands that can answer one question with evidence rather than adjectives: why does this product deserve to exist?”