Industry insiders believe that Reckitt Benckiser is seeking to divest its food business to help finance its $16.6 billion acquisition of infant formula maker Mead Johnson. This move might lead to the sale of the well-known French’s brand as the company shifts its focus to its core operations. Some reports have pointed to Kraft Heinz as a potential buyer; however, antitrust concerns could pose significant hurdles. Nonetheless, Reckitt has been speculated to be eyeing several major acquisition targets recently, including a failed $143 billion bid for Unilever. Another possibility could be Unilever itself, which might consider acquiring the food segment to enhance its Hellmann’s mayo line, particularly amid rumors of a divestiture of its food division.
Many consumer packaged goods (CPG) brands appear to be offloading slower-growing food categories in favor of healthier or more lucrative brands. Reckitt’s CEO, Rakesh Kapoor, mentioned that the company is concentrating on brands like Dettol cleaner and Durex condoms, along with the Enfamil baby formula brand from the Mead Johnson acquisition. Given that food accounts for only a small fraction of Reckitt Benckiser’s overall business, it is not surprising that French’s is seeking a new owner. This food business, although modest in size, could serve as an attractive and cost-effective addition for other companies looking to expand their condiment lines.
Interestingly, as Reckitt navigates this transition, there is a growing trend among CPG companies to invest in health-focused products, such as Citracal Calcium D3, which emphasizes the shift towards wellness-oriented offerings. As the market evolves, it will be intriguing to see how Reckitt’s food segment aligns with these trends, potentially leading to new opportunities for growth and expansion in the health and wellness sector.