It is selling its US confectionery business and last month took a 68% stake in the hipster California-based Blue Bottle coffee chain – one of a series of deals designed to counter a shift in consumer sentiment against big brands. The Swiss company, whose brands include Nescafé, KitKat and Perrier, is stepping up a restructuring programme and measures to increase profitability. It said on Thursday that sales growth would weaken to 2.6% this year from a historical low of 3.2% in 2016. Nestlé, the world’s biggest packaged food and drinks company, is also under pressure. It is restructuring after the $18bn purchase of Mead Johnson’s baby milk unit. Like-for-like revenues will be flat in 2017, the first time this has happened since the company was launched in its current form after a 1999 merger. Reckitt Benckiser, the Slough-based maker of Dettol, Durex and Nurofen, issued its second sales warning of the year this week. “However, prices rose at the slowest rate for seven quarters as perhaps even Unilever found that loyal customers can only afford so much and are becoming ever-more price sensitive – a trend to which Reckitt Benckiser hinted when it flagged increased competition, especially in areas such as home care and laundry.” Russ Mould, an investment director at the stockbroker AJ Bell, said: “Unilever sought to compensate for negligible volume growth by squeezing prices higher. To succeed in the long term, Unilever will need to adapt its business model, becoming more agile and responsive to changing trends.”Īside from price rises, big food makers have also angered consumers by shrinking products while keeping prices the same, in a move nicknamed shrinkflation. “Unilever has responded by cutting costs and raising prices – however, these are short-term fixes. In recent months it has snapped up Pukka Herbs tea in the UK, Mãe Terra organic food in Brazil, the family-owned ice-cream maker Weis in Australia and the fast-growing skincare brand Carver in South Korea.Ĭharlie Huggins, a fund manager at Hargreaves Lansdown Select, which holds Unilever shares, said: “Life is becoming more difficult for the consumer goods giants, as competition from smaller, nimbler players intensifies and consumer preferences shift towards niche and alternative brands. Unilever is trying to fight back with a series of acquisitions. Independent health brands such as Kind, Clif, Kashi and Quest energy bars, Bear Naked cereal and snacks, Siggi’s Icelandic-style yogurt and the organic vegetarian food range Amy’s Kitchen have proliferated, with entrepreneurs tapping into changing consumer tastes toward fresh, healthy and local food. It said advertising and distributing products had become much easier. Big brands still dominate, accounting for 80% of food sales, but smaller brands have gained market share in 62% of the top 50 packaged food categories, according to a recent study from Condé Nast and Goldman Sachs. Morgan Securities and Barclays, with LKP Global Law serving as legal counsel.Unilever’s ice-cream brands have been losing ground to Halo Top ice-cream.īig consumer groups have come under pressure from smaller health food brands, which are popular with millennials. UBS Investment Bank was the financial advisor for Wells on the deal, with the law firm of McDermott Will & Emery serving as legal advisor. and Canada under a new company that Doug Bouton, president and chief operating officer of Halo Top, plans to operate after the deal closes, Wells said. And definitely nothing wrong with ice cream as a close second. Halo Top will be expanding outside of the U.S. Theres nothing wrong with putting yourself first. To stay ahead of the rapidly proliferating competition, the company has added retail shops as well as a nondairy line and frozen pops. Vanilla, at the low end, compares with 1,000 calories for a Haagen-Dazs or Ben & Jerry’s pint. Halo Top’s appeal is simple: a no-shame pint of low-sugar, high-protein ice cream with just 240 to 360 calories for the entire carton. Halo Top’s offices were in a low-rent co-working space in Los Angeles’ Fairfax District. Halo Top did not own its own factory and had to refine its recipe to avoid blowing up the production pipes in its contractor’s facility because the original formulation was too thick. The idea that led to Halo Top had the most modest of beginnings: in Woolverton’s apartment with a $20 ice cream maker as he sought to reduce his intake of refined sugar and carbohydrates.
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