Commenting on the announcement by Danone that it is in talks with a number of potential buyers over the sale of the majority of its medical nutrition division, Chris Stott, food and drink partner at KPMG, said:
“With these talks coming hot on the heels of Symrise’s acquisition of Diana Ingredients last month, we are witnessing a steady convergence of the food and pharmaceutical industries.
“There is certainly enormous potential for growth in the medical foods - or ‘nutraceuticals’ – market, as health-conscious consumers become increasingly focused on their diet, and healthcare takes a more preventative approach to disease.
“However, food and pharma business models are incredibly different. The success of a company wanting to occupy this space hinges on it selecting the very best aspects of both industries to develop the appropriate culture and capabilities for growth.
“For example, Danone acquired its medical nutrition business as part of its purchase of Numico in 2007. However, following the acquisition, it did not focus on adapting its organisational structure to support the sales model and R&D focus that a medical nutrition business requires.”
Chris Stirling, KPMG’s global head of life sciences, added: We’re all aware of the significant increase in M&A activity underway in the pharmaceutical and life sciences sector. This activity results primarily from the upheavals in healthcare systems across the globe. One healthcare trend is a shift towards ‘prevention’ away from focussing purely on ‘cure’ which will drive greater convergence between food and medicine in the longer term. We therefore expect to see lots more activity in the nutraceuticals space.”
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.