Nestle SA agreed to sell bottled-water brands in the U.S. and Canada to private equity firm One Rock Capital Partners in a $4.3 billion deal that puts the future of the ailing business in the hands of the man who helped turn around Pabst Blue Ribbon and Hostess Twinkies.
Dean Metropoulos is joining up in One Rock’s purchase of the Nestle brands, which include Poland Spring, Pure Life and Deer Park. The billionaire investor is known for reviving worn-out products like Bumble Bee Tuna and Chef Boyardee.
Bottled water has been a headache for Nestle Chief Executive Officer Mark Schneider and will be challenging to fix. The segment eclipsed soft drinks in popularity in the U.S. after a surge in demand in the early 2000s. That attracted low-price competition and criticism that the business wastes plastic and precious natural resources. In 2020, COVID-19 restrictions pummeled consumption, as a large proportion of bottled water is consumed in restaurants and tourist destinations.
As big producers such as Coca-Cola Co. and PepsiCo Inc. try to find ways to sell water in more environmentally sound ways, the question remains whether Metropoulos will succeed in cracking a problem that Nestle preferred to step away from.
Source: Crain’s Detroit
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