nestleHippocrates was quoted from the 4th century: “Let food be thy medicine and medicine be thy food.” (1)

It appears Nestlé – and other companies – intend to make this advice a 21st century reality.

Nestlé is the largest food company in the world, and Europe’s most valuable corporation, worth $240 billion.

“Sugar has been sweet” (2) for a century and a half. No longer. Today sugar* is joining tobacco and alcohol as products governments are evaluating critically. Examples: The UK and Mexico have taxed sugary drinks; the U.S. FDA is considering tougher rules for sugar labeling.

*The FDA is also preparing voluntary guidelines for salt/sodium reduction in foods. Guidance released in June 2016. (3)

Increased governmental scrutiny, along with Nestlé’s – and their peers’ – declining revenues in the confectionery business’ since 2012, make it clear why major changes are in process.

Adding a Medical Foods Business

Today in both scientific study and commercial business, the line between medicine and food is blurring. Add “nutrition,” and the line blurs further.

Nestlé intends to sell both the problem and the remedy. They want to keep their core food and sweets business, and add good-tasting medicines. These medicines could be available over-the-counter (OTC) or via prescription (Rx), and could target serious medical issues as broad as diabetes, epilepsy, Alzheimer’s and digestive health.

sweet

Medical Foods

multiNestlé intends to become a “scientifically driven nutrition, health and wellness company.”

“Medical food” is a complex term. Medical foods are intended for people with chronic diseases – not healthy people. Since they are intended to manage serious illnesses (e.g. Alzheimer’s), use only under medical supervision is essential.

The FDA has defined “medical foods,” (4) and doesn’t regulate them as drugs. But, medical foods still face considerable scrutiny to make it through various governments’ regulations.

Hormel – Heading in a Similar Direction (5)

Hormel is also investing in R&D and new product lines to meet medical and nutritional needs – via a different route. Rather than “medical foods,” Hormel’s “Vital Cuisine” line counters muscle and weight loss due to cancer-related therapies with ready-to-eat meals, nutrition shakes and whey protein powders. These are the first products certified by the Cancer Nutrition Consortium as nutrient and protein-rich foods.

Nestlé Institute of Health Sciences

In 2010 Nestlé hired a highly experienced pharmaceutical executive, Ed Baetge, to run the newly formed Nestlé Institute of Health Science.

With a 10-year budget of $524 million (USD), the institute’s 160 scientists are devoted to the brain, muscles, nerves, chemical entities, natural products, and food extracts – to name a few.

Working on understanding genetic profiles today, one long-term objective is using an individual’s data and health history to develop personalized medical food.

Nestlé Health Science

Greg Behar, a Nestlé executive, is responsible for commercializing the Institute of Health’s discoveries. His staff of more than 3,000 is dedicated to developing a new industry – one that sits between food and pharmaceuticals. They believe their business has the potential to achieve revenues of 10 billion francs annually ($10.4 billion USD).

The market for prescription-based powders and drinks that meet nutritional requirements for certain diseases is estimated at $15 billion (6). The aging population boosts this market’s growing potential. By 2050, 22% of the global population is expected to be at least 60 years old.

Looking Forward

While Nestlé – and others – are investing in serious R&D, scientific study and human clinical trials, it’s still likely a considerable challenge to gain the necessary credibility to be viewed as serious contributors to addressing the health issues of individuals with significant, chronic diseases.

Still, per James Hendrix, director of global science initiatives at the U.S. Alzheimer’s Association, “I don’t care if it’s traditional pharmaceuticals or a medical food. There is a huge unmet medical need.”

Sources:

  1. New York Academy of Sciences Podcast, Food as Medicine: Nutrition and Global Health, October 30, 2014
  2. Campbell, Matthew, Gretler, Corinne, Nestlé Wants to Sell You Both Sugary Snacks and Diabetes Pills, Bloomberg Businessweek, May 5, 2016
  3. Draft Guidance for Industry – Voluntary Sodium Reduction Goals, U.S. Food and Drug Administration, June 2016
  4. Frequently Asked Questions About Medical Foods, Second Edition: Guidance for Industry, U.S. Department of Health and Human Services, Food and Drug Administration, Center for Food Safety and Applied Nutrition, May 2016
  5. Duran, Rachel, Are Medical Foods the Next Big Trend for Packaged Goods?, FoodDive.com, June 2, 2016
  6. Revill, John, Nestlé Develops Foods to Treat Diseases, The Wall Street Journal, April 12, 2016

Recalibrating Actions:

  1. Clearly Nestlé’s quest to become a “scientifically driven nutrition, health and wellness company” is no small shift in company strategy. Their success is yet unknown. However, is your company now facing – or likely to face in the near term – serious negative impacts on your core businesses? If so, are you currently working on options as significant as completely new industries and business models to be able to maintain long-term success of your organization?
  2. In your industry are there also new inventions and/or technologies that are as disruptive as “medical foods?” If so, how is your organization responding? Are you actively working to define several opportunities these disruptors present? How does your strategy and responsiveness to market shifts – regardless of size – compare to your competition?
  3. As noted above, regardless of the rigorous scientific study, very different processes and entirely new potential regulations, a leader of an Alzheimer’s organization (clearly a very significant and widespread health concern) notes “there is a huge unmet medical need.” Within your industry (or potentially an adjacent one) are there “huge unmet needs” that your company could today, or with feasible changes or partnerships address?
  4. Today how does your R&D investment compare to 1) what it should be to achieve company objectives, 2) competitors and 3) what is should be to break through to the next level as a company?

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Contact us to recalibrate your business and your brand.

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