VEVEY, Switzerland (BRAIN) — The iconic brand PowerBar has a new owner—Post Holdings, the maker of Grape-Nuts, Post Raisin Brand, Honey Bunches of Oats and other foodstuffs. Nestle SA sold the brand, along with its Australian sport nutrition company, Musashi, to Post. Nestle made the announcement Monday.
An analyst at Barclays Capital, Andrew Lazar, citing data from Nielsen, said sales of PowerBar products have been in decline, falling 14 percent in the most recent 52 weeks of data captured by Nielsen. “In our view, part of this decline is due to the plethora of options in the snack bar areas, as well as perhaps less attention paid by Nestle in recent years,” Lazar said.
His view tracks with Nestle’s goal of shedding what it calls underperforming products. “We have an ongoing process of portfolio review and this decision came out of that,” a Nestle spokeswoman said in an emailed statement to media. “The divestment allows Nestle Nutrition to focus more closely on the core elements of our business.”
Analysts said PowerBar and Musashi have annual sales of about $221 million. Post is likely to have paid about $440 million for the brands.
Brian Maxwell and Mike McCollum borrowed $55,000 to launch PowerBar in Berkeley, California, in 1986. The launch cracked open the sports nutrition industry, targeting endurance athletes, triathletes and cyclists who embraced the bars for their concentrated energy boost. The company was posting about $150 million in annual sales when it was sold to Nestle SA in 2000 for $375 million.
Post will combine the divisions with its existing nutrition business to create a unit with annual revenue approaching $550 million, the St. Louis-based company said in a statement. Terms of the deal will be published within four days, and the transaction is likely to be completed in Post’s fiscal third quarter.
William Stiritz, Post’s chairman and CEO, has been buying products such as Premier Nutrition supplements and Hearthside Food Solutions’ organic cereals and snacks since Post was spun off from Ralcorp Inc. in 2012. The global active nutrition category is expected to grow at a compound annual rate of 7 percent from 2014 to 2017.
Just as the sale was announced, PowerBar said it has a new sponsorship agreement with the BMC racing team. The deal makes PowerBar the squad’s exclusive sports nutrition bar, energy gel and sports drink supplier through 2016.
“We are proud to have PowerBar joining the other outstanding supplier sponsors of the BMC Racing Team in 2014,” said Jim Ochowicz, president and general manager of BMC Racing. “Their lineup of quality, high-performance products will help fuel our athletes to many wins in 2014 and beyond.”