Unilever Continues to Transform North American Portfolio
Consumer products giant Unilever Plc (UL) has been focusing on shaping its portfolio to deliver sustainable growth. With an aim to widen its position in the fast-growing gelato market, Unilever has recently announced the acquisition of Minneapolis-based Talenti Gelato & Sorbetto. However, the terms of the deal were not disclosed.
Founded in 2003, Talenti is available in 30 gelato and sorbetto flavors that are made from the finest ingredients and are packaged in reusable plastic jars. The acquisition of Talenti will add packaged gelato to Unilever’s existing portfolio of ice cream brands including Ben & Jerry's, Breyers, Fruttare, Good Humor, Klondike, Magnum and Popsicle.
The acquisition of Talenti is in line with Unilever’s portfolio transformation initiative in North America. Through this initiative, Unilever has been constantly making efforts to transform and focus on its core portfolio in order to deliver sustainable growth. The core portfolio includes food, as well as detergents, toiletries, and specialty chemicals.
In-line with this initiative, Unilever has also made quite a few divestitures in the recent past, with its last divestiture made in Jul 2014 of its Slim-Fast trademark and the global Slim-Fast business portfolio (read: Unilever Sells Slim-Fast Brand; Remains Focused on Core Business). Unilever has also sold pasta sauces brands, meat snacks business and hair care brands to name a few.
In early Oct 2013, Unilever sold its Wish-Bone salad dressing business to food company Pinnacle Foods Inc. (PF), while in August, ConAgra Foods Inc. (CAG) bought its Bertolli and P.F. Chang's frozen meals brands. In Jan 2013, the company sold its Skippy peanut butter business to Austin, MN-based producer of branded food and meat, Hormel Foods Corp. (HRL).
We believe that this portfolio transformation initiative might help the company to revive its business, which has been struggling due to continued soft growth in the emerging and developed markets. Unilever currently holds a Zacks Rank #4 (Sell).
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