- Health-conscious consumers today are increasingly focused on fresh foods.
- Getty Images/Saul Loeb
Last week Kainos Capital shook up its portfolio with Slim-Fast, the brand that produces meal supplements including ready-to-drink shakes, powders and bars.
The firm is “betting on revitalizing the brand,” said Kainos Partner Sarah Bradley. But Kainos may face a tough road ahead as a new generation of consumers, while increasingly health conscious, appear to be swearing off dieting.
Millennials, which makes up about 86 million of the U.S. population, are less likely to diet than baby boomers, according to research company NPD Group. More than 25% of baby boomers are on a diet, while only 12% of Millennials would say the same, according to the report.
This follows up the long-term decline in the trend of dieting—only 19% of adults reported they were on a diet in 2013, down from its peak at 30% in 1991, NPD Group reports.
Today’s consumer is more likely to change their diet to include so-called “clean,” organic food. Sales of organic food, which have increased steadily over the past decade, topped $35 billion last year according to the Organic Trade Association.
Concurrently, concerns about the effects of artificial sweeteners have cut heavily into the sales of items including diet soda. Sales of 100-calorie packs, which looked to be a boon for snack makers, and low-calorie frozen meals have also slid in recent years.
Although Millennials may eschew diet plans, “57% of adults still report that they would like to lose 20 pounds,” according to NPD, possibly leaving some room for companies like Weight-Watchers, Slim-Fast and Jenny Craig.
Private equity firms, like Kainos, appear increasingly ready to take on that challenge.
Last year, Nestle SA sold its struggling Jenny Craig diet business unit to North Castle Partners. Similarly, MidOcean Partners, which sold Jenny Craig to Nestle in 2006, doubled down on the segment in 2011 when it acquired the South Beach Diet brand along with creator Dr. Arthur Agatston.
Write to Lillian Rizzo at lillian.rizzo@wsj.com . Follow her on Twitter @Lilliannnn.