Shoppers turn to smaller food brands, cutting into Unilever, P&G profits

By Jessica DiNapoli, Svea Herbst-Bayliss, Siddharth Cavale and Abigail Summerville

NEW YORK (Reuters) - Big Food's worst nightmare is unfolding crossed U.S. supermarket aisles.

Shoppers, weary of precocious prices and highly-processed packaged food, are progressively buying from smaller nutrient brands, threatening the maturation of billion-dollar products from conglomerates specified arsenic Unilever.

Consider Hellmann's mayonnaise, 1 of Unilever's biggest brands globally. The condiment is losing marketplace stock to less-well-known rivals specified arsenic Duke’s Mayo, which was founded successful the U.S. south, and Mike’s Amazing mayo, which is gaining traction successful the U.S. northeast, wherever it says it is the fastest increasing condiments brand. Both are often priced for little than Hellmann's.

A 30-ounce jar of Duke's, for example, is priced beneath $5 versus Hellmann's $6.49 for the aforesaid size. It is present 1 of the country's fastest increasing brands of mayo with much than $100 cardinal successful sales, according to the buyout steadfast that acquired its genitor company, Sauer Brands, for astir $1.5 cardinal successful January.

Duke's marketplace stock grew to 9% from 6% successful 2021, said Joe Tuza, Sauer Brands main maturation officer. The sugar-free mayo is the country's fifth-largest by marketplace share, Tuza said, down Hellmann's and different Kraft Heinz and Unilever brands.

The rival products' occurrence shows the challenges facing planetary user merchandise and nutrient marketers specified arsenic London-based Unilever, which successful February amazed retailers, investors and employees erstwhile it replaced its 2nd CEO successful 2 years, Hein Schumacher, successful portion due to the fact that helium failed to crook astir its 60.8 cardinal euro concern rapidly enough.

Unilever declined to remark for this story.

The institution paid $24.3 billion, including the presumption of debt, to get Hellmann's proprietor Bestfoods successful 2000, expanding its beingness successful food. Unilever has aggressively marketed Hellmann's, and launched caller flavors of the condiment, but successful caller years, the brand's clasp has weakened successful the U.S. mayo category, according to Euromonitor information tracking brick-and-mortar and online retailers.

Adam Theo, 45, of Arlington, Virginia, said helium switched to Duke's aft a person introduced him to the condiment astir 3 years ago. "Before that, I ne'er thought overmuch astir my prime of mayonnaise,” helium said.

Unilever's nutrient business, dominated by Hellmann’s and Knorr seasonings, saw income measurement stay astir level past year, portion prices rose, Fernando Fernandez, who was Unilever's main fiscal officer, said past month. Fernandez replaced Schumacher arsenic CEO connected March 1.