Nestlé purchases Essentia Water, increases functional water portfolio

18 Mar 2021

Nestlé entered into an agreement in early March to acquire ionized alkaline water brand Essentia Water, which the Swiss company said was the No. 1 selling bottled water brand in the natural channel.

Founded in 1998 in Washington state, Essentia is one of the pioneers in the functional water space and has built a successful, widely-recognized brand. Although terms of the agreement were not disclosed, Essentia posted $192 million in sales for 2020, which is nearly double the company’s 2018 valuation of $100 million in revenue when it was relying on Credit Suisse to negotiate a sale of the brand. At the time, there were projections that bids for the brand would be in the range of $500 million.

Nestlé purchases Essentia Water, increases functional water portfolio
Photo credit: Essentia Water

By purchasing Essentia, Nestlé is stepping into the fast-growing market for functional water. According to Mordor Intelligence, the global functional water market is projected to grow at a compound annual growth rate of 7%, and big brands worldwide are vying to quench the thirst of consumers looking for more from their beverages than just hydration. From Coca-Cola to Keurig Dr Pepper, premium functional water is a category that is attracting heavy investment, and this recent purchase by Nestlé catapults the Swiss brand into the big leagues.

"With the addition of Essentia we continue to transform and best position our water business for long-term profitable growth here in the U.S. and globally," said Steve Presley, Chairman and CEO of Nestlé USA in a statement. Essentia gives us an immediate strong presence in the high-growth, functional water segment and supports our efforts to capture opportunities with emerging consumer trends such as healthy hydration."

While Nestlé is expanding its footprint in healthy hydration, the company is shedding brands in less profitable categories. Just last month, Nestlé sold its North American bottled water business for $4.3 billion to private equity. At the time of the sale, CEO Mark Schneider said the divestment will position the global waters business for long-term profitable growth by allowing Nestlé to focus on functional water as well as international premium brands, local natural mineral waters and high-quality healthy hydration products.

However, the company is not making room for growth only in its global waters business. Recently, Nestlé sold its U.S. ice cream business to Froneri, and in 2018, the company sold its U.S. chocolate business to Ferrero. These deals have put billions into Nestlé’s coffers, which the company has preceded to invest into high-growth areas such as meal delivery kit service Freshly, and the biopharmaceutical company Aimmune Therapeutics.

As the Swiss multinational continues to aggressively pursue growth, it will be no surprise to see the company invest further in the functional water space in order to court customers that are willing to spend the extra money to hydrate themselves with brands that are healthier than soda and juice and also promise additional benefits beyond what simple H2O provides.

Related news

PepsiCo doubles down on nonalcoholic cocktail mixers with Unmuddled

PepsiCo doubles down on nonalcoholic cocktail mixers with Unmuddled

8 Jul 2021

Legacy soda manufacturer PepsiCo is moving deeper into the non-alcoholic cocktail space with the announcement that it will debut a line of premium mixers called Unmuddled. The product line will be available beginning in September at Fresh Thyme and on ...

Read more 
Carbios technology creates first enzymatically recycled bottles

Carbios technology creates first enzymatically recycled bottles

6 Jul 2021

French biochemistry firm Carbios announced that, in partnership with a consortium of CPG manufacturers, it has produced the world’s first food-grade PET plastic bottles made entirely from enzymatically recycled plastic .

Read more 
Soonish debuts natural beer with gluten-free baking ingredients

Soonish debuts natural beer with gluten-free baking ingredients

29 Jun 2021

Los Angeles micro brewer Soonish now has a beer that is aiming to take the gluten-free beer space and transform it into the “natural beer” category. Soonish-Natural Beer is made using banana, millet, sorghum, and honey, but rather than resulting in a f...

Read more 
Dogfish Head releases oat-milk hazy IPA beer

Dogfish Head releases oat-milk hazy IPA beer

1 Jun 2021

It’s only been a few years that oat milk has been on grocery store shelves, but the plant-based milk alternative has made waves with its latest inroads being in the beer sector. In partnership with oat milk maker Elmhurst 1925, beer brand Dogfish Head ...

Read more 
Consumers prefer no rather than low-alcohol

Consumers prefer no rather than low-alcohol

10 May 2021

Beverage market analysis firm IWSR expects the no- and low-alcohol category to grow 31% by 2024, according to a new report that reviewed 10 key markets representing 75% of the global consumption of these beverages. The anaylzed markets were Australia, ...

Read more 
Startup Bevry takes first mover advantage in Indian oat milk category

Startup Bevry takes first mover advantage in Indian oat milk category

5 May 2021

Indian startup Bevry has developed its own oat milk formulation, which it is manufacturing and selling exclusively in India with the goal of becoming the “Oatly of India.” According to the company, it is the first brand to manufacture and sell an oat-b...

Read more 
Sugar tax in South Africa results in ‘positive changes’

Sugar tax in South Africa results in ‘positive changes’

23 Apr 2021

A study published in The Lancet found that following the 2018 implementation of a 10% tax on sugar-sweetened beverages in South Africa, the overall consumption of sugar from these beverages fell 35% from 16.25 grams per person daily to 10.63 grams per ...

Read more 
Danone Manifesto Ventures makes first UK-based investment

Danone Manifesto Ventures makes first UK-based investment

8 Apr 2021

Danone’s VC arm, Danone Manifesto Ventures (DMV) made its first investment in a UK-based business with its commitment to a £2.5m funding round for the healthy drinks brand Moju. Moju said the French Dairy giant’s minority investment in the company will...

Read more 
Topo Chico finally debuts its hard seltzer

Topo Chico finally debuts its hard seltzer

1 Apr 2021

Molson Coors Beverage Company, which is exclusively manufacturing Topo Chico Hard Seltzer through a brand authorization agreement with Coca-Cola, finally released the concept onto shelves on March 29 after announcing the development of the brand in Jul...

Read more 
Chobani enters into pilot program with PepsiCo

Chobani enters into pilot program with PepsiCo

30 Mar 2021

Greek yogurt maker Chobani recently entered into a distribution partnership with PepsiCo to sell its new yogurt drinks at convenience stores, colleges and universities in the northeastern part of the U.S. In the original report on this news, Bloomberg ...

Read more