Unilever's Nomerican frozen meals business includes entrees and appetizers. (Photo: Unilever/Bertolli/FIS)
Unilever sells North American frozen meals division
Wednesday, August 01, 2012, 23:40 (GMT + 9)
Unilever PLC announced this week that it has signed a definitive agreement for the sale of its North American frozen meals business to ConAgra Foods, Inc for a sum of USD 265 million.
Unilever's North American frozen meals business is comprised of a full range of premium, multi-serve frozen entrees and appetizers sold under the well-known brand names Bertolli and PF Chang's.
Last year, the combined Bertolli and PF Chang's brands generated turnover of approximately USD 300 million.
The transaction includes a license for ConAgra Foods to be able to use the Bertolli brand name and a transfer of Unilever's existing license with PF Chang's for use of the PF Chang's Home Menu brand name. However, the transaction excludes Unilever's facility in Owensboro, Kentucky, where the Bertolli and PF Chang's frozen meals are currently made.
Unilever will retain the Bertolli trademark and keep its existing pasta sauce business going, with manufacturing operations still running out of its Kentucky facility.
The decision to divest Unilever’s North American frozen meals business corresponds with its global strategy to exit the frozen foods business. Already, the company has divested its European frozen foods business.
This is ConAgra's fifth deal in the past year that expands its presence in retailers’ frozen-food aisles.
It comes in light of consumers showing that they are particularly sensitive to higher prices on frozen meals, meaning they are buying fewer of them. Data provider Nielsen Co informed that frozen-food sales are up by 2 per cent for the 52-week period ended on 14 April, but the number of items has been down 2 per cent during that same period, Dow Jones reports.
This shift recently forced HJ Heinz Co to discontinue its TGI Friday's line of frozen single-serve entrees and multiserve meals, as the business was incurring losses. Sales of ConAgra's Banquet line of frozen meals also took a dive in sales after the company pushed prices above the USD 1 level.
Bertolli and PF Chang's add two higher-priced brands to ConAgra's frozen-food offerings, which already includes Marie Callender's, Healthy Choice and Kid Cuisine Andre Hawaux, among other names, said the president of ConAgra's consumer-foods business.
The transaction is expected to close in the third quarter of this year.
By Natalia Real