In light of Unilever’s probable sell-off of its Gordon’s frozen food business in the US, analysts at Datamonitor believe that the food giant is likely to divest many other low-growth brands.
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Having completed its £13bn acquisition of US company Bestfoods, Unilever will be anxious to consolidate its new position with a leading position in core food categories, and this does not leave much room for the less profitable brands in its extensive portfolio. Indeed, well over a year ago Unilever said it would focus on a key range of some 400 ‘power brands.’ It is vital that capital be set free for investment in areas boasting higher growth and market dominance.
As such, the frozen foods arena is one major resource of capital for the Anglo-Dutch behemoth. Consumer interest is slacking in preference of the chilled convenience food sector and many frozen food companies are struggling. Datamonitor reveals that Unilever annually rakes in near US$3.2bn in frozen food revenue, but up to 15% of this might be sold in order to fund investment on brands in the rapidly expanding sauces or ice-cream sectors.
