Sir Kensington S

US: Unilever boosts packaged food business with Sir Kensington’s purchase

Sir KensingtonUnilever has agreed to purchase natural and organic condiment maker Sir Kensington’s for an undisclosed amount, albeit the Chicago Tribune is reporting that the deal cost $140-million.

Sir Kensington’s, which has seen strong growth over the past four years, makes mustard, mayonnaise, ketchup, and Fabanaise, a vegan mayonnaise made with aquafaba.

“Sir Kensington’s is an innovative business with outstanding products and a leader in the organic and natural marketplace. We look forward to leveraging our joint understanding of food trends and consumer preferences to significantly grow the business,” Kees Kruythoff, President, Unilever North America, said.

FoodDive insight:

This acquisition comes as Unilever tries to punch up sales in its packaged food business. The company has sold many of its slow-selling legacy brands in recent years, including Bertolli, Ragu, Wish-Bone salad dressing and Skippy peanut butter.

Last month, shortly after it fended off a $143-billion takeover offer from Kraft-Heinz, the manufacturer announced it would be selling off its spreads line, including I Can’t Believe It’s Not Butter and Country Crock.

At the same time, Unilever has put its muscle behind a few key categories — most notably ice cream and condiments. It purchased a couple premium ice cream brands, including Talenti Gelato, and invested in its Ben & Jerry’s and Hellmann’s brands.

During its recent earnings report, in which the company noted a 1.1% volume decline in its food business, Unilever pointed to its Hellmann’s Organics line as a top performer.

“In Foods, our priorities are to build scale in emerging markets and to modernize the portfolio,” Graeme David Pitkethly, the company’s chief financial officer, said in a call with investors.

With its purchase of Sir Kensington’s, Unilever gains a brand that almost single-handedly pumped life into the condiments business.

Started in 2010 by two college friends, Sir Kensington’s all-natural mustard, ketchup and mayo became a popular alternative to established brands, and quickly gained mainstream shelf space in a category that rarely offers a foothold to new players.

Its vegan mayonnaise, which used aquafaba, a liquid byproduct that comes from processing chickpeas, has become a hot seller of late.

Several small companies are attempting to emulate Sir Kensington’s success in condiments. In this deal, the company will benefit from Unilever’s investment, distribution network and insight in creating space between itself and its competitors.

But will Unilever’s size diminish Sir Kensington’s innovative spirit? Don’t bet on it. Large companies have become increasingly hands-off in their management of natural and organic brands, which know their market and their consumers intimately.

If anything, big manufacturers are realising they have more to learn from the emerging brands they’re purchasing than the other way around.