Unilever has announced plans to sell 15 North American brands.
The food and household products up for sale come from the acquisition of Bestfoods last October. The sale of products such as Mazola cooking oil and Henri’s salad dressing are part of Unilever’s strategy to divest all its secondary brands. This will free the company to focus on just the key ranges – a sensible move to make in the current climate.
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Unilever is slashing its way through the ‘Path to Growth’ again. Another 15 products are up for sale, considered secondary to some of Unilever’s really big sellers. Unilever has already dropped many famous names in its quest to reshape itself around 400 key brands, just 25% of the 1,600 held at the start of 2000. This round, the ones to go include Mazola cooking oil products, Argo and Kingsford’s corn starches as well as various syrups, salad dressing and dye.
“The planned sale is a logical step in the process of integrating Unilever and Bestfoods,” explained Patrick Cescau, Foods Director at Unilever. “The brands identified for sale represent an attractive portfolio but fall outside of our strategy to focus on leading brands such as Ragu, Hellmann’s and Lipton.”
Unilever completed its purchase of Bestfoods, manufacturer of the Hellmann’s, Mazola and ranges, in October last year. Since then, antitrust authorities have forced it to sell some of its European dry soups and sauces, which went to Campbell Soup for E1 billion. Bestfoods Baking was also sold as part of the drive to focus on fewer brands. It was bought by George Weston for $1.8 billion in January.
The combined portfolio this time has annual sales of around $400 million. Mazola is the top retail brand of corn oil in the US, while Argo and Kingsford’s together account for 60% of the US cornstarch market. Also up for sale are Golden Griddle, Old Colony, Old Tyme pancake syrups, Karo, Crown and Beehive corn syrup, Henri’s salad dressing, St Lawrence corn oil, three more starches and Rit fabric dye.
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By GlobalDataWhile Unilever’s massive restructuring does bring some degree of risk, the “Path to Growth” seems to be going well. The divestiture of secondary ranges to focus on a limited number of global brands should enable Unilever to deliver sales growth and margin improvements even in the event of slowing consumer demand.
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