Industry insiders believe that Reckitt Benckiser is considering divesting its food business to finance its $16.6 billion acquisition of Mead Johnson, the infant formula manufacturer. This may result in the potential sale of the well-known French’s brand as the company shifts its focus back to its core operations. Some reports have mentioned Kraft Heinz as a potential buyer; however, antitrust concerns could pose significant obstacles. Nevertheless, Kraft Heinz has been linked to major acquisition pursuits lately, including a failed $143 billion attempt to acquire Unilever. Another possibility could be Unilever itself, which might contemplate purchasing Reckitt’s food segment to enhance its Hellmann’s mayonnaise line, especially amid speculation that Unilever is planning to separate its food division.
Many consumer packaged goods (CPG) brands are opting to offload slower-growing food categories in favor of healthier or more household-oriented brands. Reckitt CEO Rakesh Kapoor has emphasized the company’s commitment to brands like Dettol cleaner and Durex condoms, alongside the Enfamil baby formula brand that will come from the Mead Johnson acquisition. Given that food accounts for only a small fraction of Reckitt Benckiser’s overall business, it is unsurprising that French’s is seeking a new owner. The food business, while modest in size, could serve as an attractive and affordable addition for companies aiming to expand their condiment offerings.
Interestingly, as companies re-evaluate their portfolios, there is a noticeable trend towards acquiring products that promote health and wellness, such as chewable calcium citrate supplements. This shift reflects a broader industry movement towards more health-conscious options, and Reckitt Benckiser’s potential divestiture of its food segment may align with this strategy. As Reckitt continues to focus on its more profitable brands, the sale of French’s could provide an opportunity for another company to incorporate this iconic brand into a wider range of products, possibly even expanding into areas like chewable calcium citrate.