Dive Brief:
Dive Insight:
Unilever purchased The Vegetarian Butcher in 2018 from founder Jaap Korteweg. During that time, it averaged double-digit growth and expanded to more than 55 markets around the world.
Despite its success, Unilever is focusing on shrinking its portfolio under new CEO Fernando Fernandez, a 37-year veteran of the company. Unilever unexpectedly ousted its prior CEO last month amid concerns the company wasn’t moving fast enough in its turnaround efforts.
Unilever said The Vegetarian Butcher doesn’t fit at the food and personal care products company for two reasons. First, it has a distinct supply chain and sourcing model that makes it less scalable within the company’s broader food portfolio. Second, The Vegetarian Butcher also has a “unique set of technological and R&D capabilities” that differ from the rest of Unilever’s products.
“This divergence makes a sale of the brand the best option for both Unilever and The Vegetarian Butcher,” the company said in a statement.
For a company trying to do more with less, divesting a brand that doesn’t generate a lot of synergies with the rest of its portfolio is a logical place to start. The company can not only devote more of its finite resources to its higher-profile, faster-growing brands, but it can also use the money it receives from the sale to pay down debt or invest in other parts of its operations.
The sale, which is expected to close in the third quarter of this year, occurs as the plant-based food space has seen its star dim, especially in the U.S.
Consumer demand for the products is slowing, forcing manufacturers to cut spending, pull back on product development and lay off employees. Beyond Meat announced last month it was cutting 6% of its workforce and suspending operations in China.
