The dietary supplement market continues to be an attractive acquisition target for large consumer packaged goods companies. In the latest deal announced Aug. 21, Church & Dwight Co. is purchasing Avid Health for $650 million in cash. Church & Dwight Co. owns Arm & Hammer, Aim and other brands of personal care and household products. Avid Health is the parent company of gummy supplement makers Northwest Natural Products and Nutrition Now.
Although it does some business in the natural channel, Avid Health sells its products primarily in food, drug and mass, with Costco serving as one of the company’s top retail distribution outlet. Through its Vancouver, Wash.-based Northwest Natural Products division, the company makes the gummy vitamin brands L’il Critter and Vitafusion, along with the AccuFlora brand of probiotic supplements. Avid's Nutrition Now line includes gummy and probiotic products as well, including the Rhino gummy and soft chews brand. Avid Health generated $230 million in sales from June 2011 through June 2012.
With net income falling 4 percent in the second quarter, Church & Dwight has said its strategy is to bolster its portfolio by buying brands with strong growth potential. Gummy-based products for both kids and adults have been solid performers within the dietary supplement market because they appeal to consumers who cannot or do not like to swallow pills.
“The acquisition of Avid’s gummy vitamins business represents a great addition to our existing portfolio and brings to our company a new growth platform in one of the fastest-growing segments of the attractive vitamin-mineral supplement category,” Church & Dwight CEO and Chairman James Cragie said in a statement.
CPG interest in health and wellness grows
This latest deal follows on the heels of Procter & Gamble’s March 15 purchase of New Chapter, a leading whole food supplement brand within the natural channel. The Avid Health purchase isn’t likely to cause the negative retailer reaction the New Chapter deal did given that Avid does not exclusively sell within the natural channel.
That said, the deal demonstrates continued M&A interest in the supplement market, particularly in categories that provide general health and wellness solutions to a wide spectrum of consumers. As Janica Lane, a partner at Partnership Capital Growth, told newhope360 in March following the P&G purchase of New Chapter, “none of the major food and CPG companies can afford not to have a presence in healthy, active and sustainable living.”