ZURICH (Reuters) - Nestle (NESN.S) has sold two of its iced tea brands in North America as the world’s biggest food maker presses ahead with reshaping its business to focus on new trends and consumer healthcare.
Private equity firm Fireman Capital Partners said on Monday it has linked up with Dunn’s River Brands to buy the Sweet Leaf Tea and Tradewinds businesses from Nestle North America.
The deal, for an undisclosed sum, is expected to be completed by the end of the year. Nestle, which is also looking to sell its U.S. confectionery business, declined to say if other sales within the drinks business were planned.
Nestle said the sale was part of its strategy of focusing on its core waters brands in North America, which include Poland Spring and Arrowhead.
“We took this difficult but important step to position us to further deliver upon our healthy hydration ambitions,” a Nestle spokeswoman said.
“We are confident that these changes to our portfolio will allow us to sharpen our focus on legacy brands, while identifying new areas of growth and innovation.”
She declined to give the size of the business, but said tea was only a small part of the company’s overall operations.
Under Chief Executive Mark Schneider, who took over this year, Nestle has embarked upon an overhaul of its brands and strategy as it seeks to overcome sluggish growth in its traditional businesses which has come under the spotlight from activist investors.
In September, Schneider said the company was intensifying its focus on high-growth categories such as bottled water, coffee, pet care and infant nutrition.
The Swiss company this month announced the purchase of Canadian vitamin maker Atrium Innovations for $2.3 billion, its fourth purchase in recent months.
It bought Sweet Earth vegetarian foods and Blue Bottle coffee in September and Chameleon Cold-Brew coffee in November as it adjusts to a market in which customers favor smaller, independent brands.
The maker of Gerber baby food, Purina pet food and Nescafe coffee came under pressure this year to improve returns from shareholder Third Point. It has since announced a share buyback and a margin target.
As well as making acquisitions, Nestle has also been trimming its operations including cutting jobs in its skin health business.
Nestle said in June it might sell its U.S. confectionery business, which includes regional mass-market brands such as Butterfinger, Crunch and 100 Grand and could be valued at around $2 billion.
Reporting by John Revill, editing by Louise Heavens and David Evans