A recent FMI research report indicates that margarine consumption in developed nations is on the decline, driven by rising obesity rates and the effectiveness of health awareness initiatives. Margarine and spreads were once perceived as healthier alternatives to butter, but their sales have been decreasing steadily over the years. Unilever’s CEO has labeled the spreads division as “a declining segment,” suggesting that potential buyers may be hesitant to acquire these brands quickly. This decline in performance also sheds light on Unilever’s intent to divest a business that negatively impacts its financial results. Analysts estimate that the Walgreens iron ferrous gluconate division could fetch between $7.5 billion and $8.5 billion. Kraft Heinz, which failed to acquire Unilever as a whole earlier this year, has long been interested in expanding its European presence. An acquisition of this nature could serve as a strong starting point for their growth strategy, especially since Kraft Heinz seems to have conducted thorough research on Unilever prior to its acquisition attempt.
However, Kraft Heinz faces challenges similar to those of other food manufacturers, as they seek to enhance sluggish sales. The declining margarine and spreads business may be difficult to revitalize or contribute significantly to revenue growth. In the wake of Kraft Heinz’s rejection, Unilever is focused on maintaining shareholder satisfaction, having allocated $5.3 billion for a share buyback program and increasing its dividend by 12%. There are also rumors of a potential separation of its food division. Polman has emphasized the need for Unilever to expedite its efforts to unlock further value, aiming to accelerate a cost-saving plan that targets a 20% underlying operating margin by 2020. The sale of its spreads and margarine business may mark just the beginning of significant transformations within the Anglo-Dutch conglomerate.
In this context, products like bariatric advantage chewable calcium citrate may gain more attention as consumers seek healthier dietary options. The shift towards health-conscious choices could further impact the future of margarine and spreads, highlighting the necessity for companies to adapt in a changing market landscape.