Swiss food giant Nestlé announced on September 2 that it has agreed to sell its mainstream vitamins, minerals, and supplements (VMS) business to U.S. private equity firm Yellow Wood Partners for $1 billion (approximately 6.7 billion yuan). The transaction covers seven consumer brands and the U.S. private-label supplements business, with closing expected in the first half of 2027.

This is another major divestiture driven by Nestlé’s new CEO Philipp Navratil since he took the helm. In a statement, he described the sale as “another important step in the strategic transformation of our portfolio,” adding that Nestlé will concentrate resources on “areas where we have the strongest competitive advantages.” He specifically noted that premium brands such as Solgar and Pure Encapsulations will be retained, with Nestlé leveraging its innovation and brand-building capabilities to pursue growth in the science-driven premium VMS market.

The seven brands included in the transaction are Nature’s Bounty, Osteo Bi-Flex, Ester-C, Gard, Nuun, Puritan’s Pride, and Sisu. Also bundled into the sale are the U.S. private-label supplements business and associated manufacturing, packaging, warehousing, and distribution facilities. These brands generated combined sales of approximately $1.2 billion in 2025, with the United States as the primary market and additional distribution in Canada, China, and other regions. The sale price falling below annual revenue reflects the segment’s relatively low profitability.

Shen Meng, executive director at Chanson Capital, told Yicai that a sale price below revenue does not necessarily mean the assets were sold at a discount; transaction pricing typically references profitability and growth prospects. Low-margin businesses drag down Nestlé’s overall financial metrics, which precisely explains the rationale for divestiture, he said.

The buyer, Yellow Wood Partners, is headquartered in Boston and specializes in consumer-sector investments, with expertise in acquiring brands divested by large consumer goods companies. The firm has acquired approximately 60 brands and currently owns a portfolio of more than 40 well-known consumer brands including Chapstick, Suave, and Q-tips. This transaction will be Yellow Wood’s sixth acquisition from a major consumer goods company since 2019. The firm said the acquired assets span multiple high-growth segments including hydration, gut health, and immunity, and expressed confidence in driving organic growth across the platform.

Notably, brands such as Nature’s Bounty, Puritan’s Pride, and Osteo Bi-Flex are all sold on major e-commerce platforms in China, with prices ranging from tens to hundreds of yuan, commanding a substantial consumer base in the Chinese market.

Strategic Transformation Accelerates

The sale of mainstream VMS brands is not an isolated move but part of a broader series of divestitures and business restructurings at Nestlé since 2024. Since Navratil took over as CEO in September 2025, Nestlé has launched a strategic overhaul centered on “streamlining the portfolio and exiting non-core areas”—a sharp contrast to the “buy-and-sell” asset-swap model under predecessor Mark Schneider.

In the coffee segment, Nestlé formally sold Blue Bottle Coffee’s global retail store operations to Centurium Capital in April 2026. When Nestlé acquired a majority stake in Blue Bottle in 2017, it had hoped to expand into the specialty coffee market, but the boutique store operating model proved difficult to synergize with Nestlé’s standardized, scaled fast-moving consumer goods system. By the end of 2025, Blue Bottle had only about 140 stores globally and remained loss-making. After selling the store operations, Nestlé retained intellectual property rights for selling Blue Bottle capsule coffee and other products through FMCG channels.

In the water and premium beverages segment, Nestlé finalized its divestiture plan in July 2026: forming a 50-50 joint venture called Peranel with U.S. private equity firm Platinum Equity, into which more than 30 iconic brands—including Perrier, S.Pellegrino, and Acqua Panna—will be placed. The joint venture is valued at €4.9 billion (approximately $5.7 billion), and Nestlé expects to receive approximately €3 billion (approximately $3.5 billion) in cash proceeds upon closing.

The ice cream divestiture is also progressing. In February 2026, Nestlé announced it was in advanced negotiations with joint venture partner Froneri to sell its remaining ice cream business, valued at close to CHF 1 billion (approximately $1.2 billion).

Trade-offs Under Earnings Pressure

Behind the flurry of asset disposals lies earnings pressure at Nestlé. The latest financial results show Nestlé’s first-half 2026 sales reached CHF 43.1 billion (approximately $53.0 billion), with organic growth of 3.6% and real internal growth of 1.5%, but net profit declined 31.4%. The China market returned to growth in the second quarter, with sales up 2% year over year.

Navratil has explicitly stated that Nestlé will focus on four core businesses—coffee, pet care, nutrition, and food and snacks—and has set a target of achieving at least CHF 2.5 billion (approximately $3.1 billion) in cost savings by the end of 2027.

From a strategic logic standpoint, Nestlé is undergoing a shift from “scale expansion” to “quality focus.” Selling low-margin mainstream VMS brands while retaining premium science-driven brands; divesting loss-making specialty coffee stores while keeping FMCG-channel coffee product rights; placing the premium water business into a joint venture to unlock cash—the common thread across these moves is exiting areas with low returns on capital or mismatched operating models, and reallocating resources to core categories where Nestlé possesses scale advantages and brand moats.

For Yellow Wood Partners, the deal extends its playbook of “taking over non-core brands from large corporations and unlocking value through specialized operations.” While the mainstream VMS market may not grow as fast as the premium segment, brands like Nature’s Bounty and Puritan’s Pride still have a stable consumer base in North America and China, with room for improvement through channel optimization and marketing investment.

The transaction remains subject to regulatory approvals. If completed successfully, Nestlé’s portfolio will further converge toward premiumization and science-driven positioning, while Yellow Wood gains a supplements platform with annual sales of approximately $1.2 billion.