Abbott to Spin Off Nutrition Division as Q3 Sales Rise
Abbott announces plans for a nutrition-focused spinoff following an uptick in Q3 sales, aiming for completion by end of 2027.
Abbott has revealed its intentions to spin off its nutrition division, a move expected to finalize by the end of 2027. This new entity will feature well-known nutrition brands such as Ensure, PediaSure, Pedialyte, Glucerna, and Similac.
Q3 Sales Show Improvement
The announcement comes on the heels of Abbott's third-quarter earnings report, which indicated a 5.1% increase in global nutrition sales, reaching $2.26 billion. Despite this positive trend, nutrition sales for the first nine months of 2026 have seen a slight decline of 1.3% compared to the previous year.
Driving Factors Behind the Growth
Excluding the impact of currency fluctuations, nutrition sales rose by 4.9% in Q3. A significant contributor to this growth has been the impressive performance in pediatric nutrition, which surged by 8.8%, translating to $1.06 billion in sales. Meanwhile, adult nutrition sales saw a modest increase of 2%, totaling $1.2 billion.
A breakdown of regional performance reveals that U.S. nutrition sales jumped by 7.9% during the third quarter. In contrast, international sales showed a more cautious growth of 3.1%. However, on a year-to-date basis, U.S. sales remain down 4.5%.
New Product Launches
Abbott has also been active in expanding its product lineup, introducing 10 new nutrition products in the first half of the year. Notable launches include an Ensure shake packed with 42 grams of protein and a ready-to-feed Similac infant formula made from whole milk, alongside dye-free Pedialyte options.
Market Dynamics Shifting
During a discussion on the earnings call, Abbott's CEO, Robert B. Ford, highlighted how the nutrition market is evolving, with consumer preferences now holding more sway over purchasing decisions compared to healthcare professionals. He noted, "What was once predominantly viewed as a healthcare market has increasingly become one shaped by changing consumer preferences, wellness trends, and retail execution.”
Future Plans as an Independent Entity
Ford elaborated on the strategic investments that the new nutrition company will need to prioritize, particularly in sales, marketing, and potential acquisitions. He expressed optimism regarding the decision, stating, "This was too exciting of an opportunity, and we believe that all the things that they would need to do could be accomplished faster, more efficiently, and effectively as an independent company.”
Following the separation, the new nutrition company is projected to employ approximately 16,000 staff members across 14 manufacturing locations. Daniel Salvadori, who currently serves as executive vice president and group president of Established Pharmaceuticals and Nutritional Products at Abbott, is set to take the helm as CEO of the new nutrition entity.
After the spinoff, Abbott anticipates that its remaining businesses in medical devices, diagnostics, and established pharmaceuticals will yield around $42 billion in annual sales.
