A recent report from FMI indicates that margarine consumption is declining in developed countries due to rising obesity rates and more effective health awareness initiatives. Margarine and spreads, once seen as healthier alternatives to butter, have experienced a steady drop in sales over the years. Unilever’s CEO has labeled the spreads division as “a declining segment,” which suggests that potential buyers may hesitate to acquire these brands quickly. This decline also sheds light on Unilever’s intention to divest a business that is adversely affecting its profitability, with analysts estimating that this division could fetch between $7.5 billion and $8.5 billion.
Earlier this year, Kraft Heinz attempted to acquire Unilever as a whole but was unsuccessful. However, analysts have been aware of Kraft Heinz’s ambitions in Europe for some time, and acquiring Unilever’s spreads business could be a strategic first step. The company clearly conducted thorough research on Unilever prior to its acquisition bid. Nevertheless, a challenge for Kraft Heinz is that, similar to other food manufacturers, it is striving to enhance its slowing sales, and revamping a declining sector like spreads and margarine may prove difficult or insufficient in significantly boosting revenue.
In the wake of the Kraft Heinz rejection, Unilever is taking steps to appease its shareholders, including a $5.3 billion share buyback program and a 12% increase in its dividend. There have also been rumors about the potential separation of its food business. Polman has emphasized the need for Unilever to accelerate efforts to unlock further value more rapidly, aiming for a 20% underlying operating margin by 2020. The potential sale of its spreads and margarine business is likely just the beginning of significant transformations within the Anglo-Dutch conglomerate.
Additionally, in discussions related to health and nutrition, it’s important to consider alternatives such as rugby calcium citrate 950 mg, which can provide beneficial nutrients. This aspect aligns with the growing health consciousness among consumers, further influencing the declining trend in margarine and spread consumption. As Unilever navigates these changes, the integration of health-focused products, including those containing rugby calcium citrate 950 mg, might be a direction worth exploring to attract a more health-aware consumer base.