Food giants Unilever and Nestle SA stepped up their push into healthier food and drink, with the Anglo-Dutch company snapping up a U.K. maker of organic tea and its Swiss rival announcing a deal for a U.S. seller of vegetarian burritos. Unilever said it has acquired Pukka Herbs, a rapidly expanding organic tea company with flavors such as turmeric gold and mint matcha. Nestle agreed to buy California-based Sweet Earth, which makes frozen meals and chilled, plant-based burgers.
The acquisitions show how Big Food, spurred on by Amazon.com Inc.’s acquisition of Whole Foods, is accelerating efforts to expand beyond mainstream brands into healthier or ethically sourced fare. Acquisitions have ranged from mom-and-pop outfits to Danone’s $10 billion purchase of WhiteWave Foods Co. last year that gave it access to the best-selling U.S. soy milk brand, Silk, and organic food.
Pukka, with more than 30 million pounds ($39 million) in sales, is growing rapidly in the U.S. and Europe, Unilever said in a statement Thursday. The herbal, fruit and green tea market is worth 1.6 billion euros ($1.9 billion), research firm Euromonitor said.
Earlier this year, the Anglo-Dutch food and personal-care giant acquired Sir Kensington’s, a maker of condiments including vegan mayonnaise. The Lipton maker also owns T2, a high-end tea business with retail outlets.
“Pukka has strong values and a clear purpose that aligns fully with our own sustainable growth model,” said Kevin Havelock, president of Unilever’s refreshment business.
At Nestle, Chief Executive Officer Mark Schneider has jump-started efforts to meet changing consumer demands for healthier products since taking over in January. The maker of Nespresso coffee has put its U.S. confectionery business up for sale and acquired a stake in U.S. startup Freshly, which makes natural prepared meals.
“Plant-based food is a significant trend for consumers, and getting exposure to it is clearly important to Nestle as it’s something they’re lacking,” said Robert Waldschmidt, an analyst at Liberum. The sector is growing by double digits and expected to become a $5 billion market in the U.S. by 2020, Nestle said.
Neither Unilever nor Nestle disclosed terms of their purchases.
In February, Unilever rebuffed a $143 billion takeover approach from U.S. food giant Kraft Heinz, arguing there was no financial or strategic merit. It has since reiterated its ambition to spend between 1 billion euros and 3 billion euros annually on acquisitions.
Sweet Earth, founded in 2011, will continue to operate independently, with support from Nestle USA’s food division, the Swiss company said. Its meals are sold in more than 10,000 stores, including grocers like Whole Foods and Wal-Mart Stores Inc.