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Diving overview:
- Hormel Foods sells Heath Labs business Lyons Magnus, a global food service and ingredients manufacturer. Prices have not been disclosed.
- Heath Labs manufactures hundreds of products for consumers with dysphagia, malnutrition, diabetes, wound healing, salt restriction, and cancer treatment. “The business is very solid and can grow with the right partners,” the company said in a statement to Food Dive.
- The sale comes as Hormel and other food manufacturers change their portfolios to focus on core brands and position their businesses for higher growth.
Dive Insight:
Health Labs was likely a small financial contributor to the Minnesota-based company, as most of its $12 billion annual revenue comes from household staples like Spam, Skippy peanut butter, and Jennie-O turkeys. . Selling the division will allow Hormel to focus on its remaining businesses and invest all proceeds from Health Labs into its own operations.
Although Health Labs provides similar nutrition to Hormel’s other products, there are likely many differences between them. They employ different methods of innovation and marketing while serving a variety of customers, from grocery stores to hospitals. Lyons is combining the Health Lab with its existing nutrition and health portfolio to achieve scale and other benefits from a larger division.
Even as Hormel sells its health business, other major food companies such as Nestlé and Danone remain in the nutritional therapy and medical food fields. The multi-billion market is set to continue to grow as consumers face special nutritional requirements and seek needs not found in traditional everyday foods.
