Unilever Buys Sir Kensington’s, Maker of Fancy Ketchup

Unilever acquires condiment startup Sir Kensington
By Stephanie Strom. Source: New York Times.

Unilever, the giant food and consumer product company, is buying Sir Kensington’s, a small condiment maker that has muscled its way on to grocery store shelves long thought impervious to disruption.

It is the first acquisition Unilever has made since it fended off a $143 billion takeover offer from the Kraft Heinz Company in February. In the intervening months, Unilever has announced that it is selling its spread business, which includes brands like Country Crock and I Can’t Believe It’s Not Butter, as well as some baking lines, leading some to speculate that it might get out of food sales altogether.

But instead, it seems to be refocusing its food portfolio on ice cream and condiments, as well as tea. Unilever also makes Hellmann’s mayonnaise and Marmite, a yeast extract spread, and is not selling either.

Terms of the Sir Kensington’s deal were not announced. Verlinvest, a Belgian family investment firm, and the founders’ friends and family members who invested in the business will be bought out, giving Unilever full ownership of the New York company.

Being part of the Unilever stable will help Sir Kensington’s gain wider distribution and better terms from suppliers.

“Smaller food companies have a challenge when it comes to customer access, plain and simple,” said Scott Norton, who founded Sir Kensington’s seven years ago with a college friend, Mark Ramadan. “It’s hard really getting the ear of the grocery store buyers and category managers who are the gatekeepers to the American people and their stomachs.”

Besides the challenge of getting their products onto shelves, the founders said they were facing growing competition from other small companies. Since Sir Kensington’s breakout success, other start-up food companies have decided that condiments are ripe for new products.

Last month at Expo West, the big natural and organic food show, for instance, several companies debuted vegan mayonnaises or mayonnaises flavored with avocado oil, products Sir Kensington’s had in its lineup earlier.

Besides producing mayonnaise, ketchup and mustard, Sir Kensington’s helped elevate the profile of aquafaba, which is the cooking liquid leftover after chickpeas are processed, by using it to make a vegan mayonnaise called Fabanaise. Now, aquafaba is showing up in a variety of products, and cooking sites are even touting it for making vegan meringue.

“Both at Kroger and in the aisle at Whole Foods, it’s become more competitive,” Mr. Ramadan said. “Seven years ago, we were the only ones trying to give Heinz and Hellmann’s a run for their money, other than maybe Annie’s and private label brands.”

A big company like Unilever, whose products populate virtually all parts of a conventional supermarket, has longstanding relationships and the ability to offer incentives to retailers for better placement on the shelves or in the refrigerated cases.

Grocers today, however, are worried about the shelves they have in the center of the store, where condiments and processed foods usually sit and which are attracting fewer customers. Hoping to reverse that trend, grocers are pressuring big food companies to add flair and innovation.

Unilever is not immune to these challenges, and like many older food companies, it has been looking for ways to pump new energy into product lines that have stagnated in recent years as consumer tastes have changed.

It bought Talenti Gelato & Sorbetto and Grom, an Italian gelato business, both of which were started in the last 15 years, adding them to a stable of ice cream brands that includes Breyers, Klondike, Ben & Jerry’s and Heartbrand.

At the same time, it has been shedding lines of food, selling off brands like Ragu pasta sauce, Skippy peanut butter and Wish-Bone salad dressings as well as lesser-known meat snacks, a chutney company and a soy beverage business.

Now, it appears to be doubling down on condiments, a category that had been one of the least active in grocery stores — until recently. Among the reasons Kraft Heinz made an offer for Unilever was its ownership of Hellmann’s, a brand that would be at home alongside Kraft Heinz’s ketchups and mustards. And Reckitt Benckiser, a British consumer goods company, is considering selling off its condiment business, which includes French’s mustard and Frank’s RedHot sauce.

“We’ve been in condiments for seven years, and condiments has only become interesting in the last seven months,” Mr. Ramadan joked.

He and Mr. Norton first started talking with Unilever five months ago. They will continue to run the company from its offices in Manhattan with the team they have assembled.

“This is the next chapter in what is going to be a very long book,” Mr. Norton said. “Our most important mission is to build something that will be part of American food culture for generations to come.”

Though Unilever, of course, is British-Dutch.

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