Unilever acquired British snack brand Graze from investment firm The Carlyle Group for an undisclosed amount, the company announced in a release Tuesday. The consumer products giant said Graze’s broad portfolio of healthy snack products will boost Unilever’s presence in the better-for-you snack category.
Graze offers a variety of snacks with no artificial ingredients, including nuts, seeds, trail mixes and bars. The company started with a snack box delivery service and is now also available in retail stores, ecommerce and direct-to-consumer. Investment bank Harris Williams advised Graze on the sale.
Nitin Paranjpe, president of Unilever’s Food & Refreshment business, said in the release that Graze is the leading healthy snacking brand in the U.K. “Accelerating our presence in healthy foods and out of home this is an excellent strategic fit for the Unilever Food & Refreshment business, and a wonderful addition to our stable of purpose driven brands,” he said.
This acquisition fits in line with Unilever’s recent moves in the food and snacking space, and shows that the company wants to boost its presence in the category. The consumer products giant has been growing its portfolio in foods and beverages that tackle top consumer demands, like snacking, better-for-you and sustainability — and Graze checks a lot of those boxes.
The brand started in 2008 as a snack box delivery service and then grew substantially when it was acquired by Carlyle four years later. The company has since grown its delivery service and expanded into retail stores in the U.K.. and the U.S. With Unilever’s resources, it can continue to grow the product’s foothold in stores internationally.
Unilever likely won’t have trouble getting more consumers to give Graze a try since snacking is one of the fastest growing categories in the food space. According to market research firm IRI, sales in the category rose to $89 billion in 2016, posting an annual growth rate of 3%. Products touting health claims and convenience have seen strong upticks in sales. Graze offers subscriptions to their snack boxes so that consumers can get the snacks customized, delivered to their door and then eat them over time, which could be a hit with consumers given the demand for convenience.
Unilever wasn’t the only one vying to take over this snack brand. City A.M. reported that the consumer goods giant sealed the deal following a bidding war with companies like Kellogg and PepsiCo.
However, Unilever still might have gotten a bargain. Although the company did not disclose the price it paid for Graze, a source with knowledge of the deal told Financial Times Unilever paid less than 150 million pounds ($194.4 million) for the business. Although the source said it was a “very competitive process,” Carlyle was reportedly hoping for 300 million pounds.
William Bain, a managing director at Harris Williams, said in a statement emailed to Food Dive that Graze found the “right partner” in Unilever.
“Graze is a unique, innovative company and a pioneer in the healthy snack sector, well positioned at the forefront of evolving consumer preferences and trends,” Bain said.
Unilever has been boosting its M&A in recent years and growing its stake in better-for-you foods and beverages. Last year, the company announced it was launching a plant-based organic snack food line that would also help fund urban farming projects and it started a new probiotic ice cream brand called Culture Republick. In 2017, Unilever purchased the natural and organic condiment maker Sir Kensington’s and acquired the Tazo tea brand from Starbucks for $384 million. All of these moves tapped into numerous growing trends in the industry, including mission-based brands, organic, sustainability, gut health and plant-based.
More moves like this could be in the near future. After some disappointing numbers, Unilever CEO Alan Jope said in the company’s latest earnings report last week that accelerating the company’s growth would be their “number one priority.” Revenues in food and refreshment globally dropped 10% from the previous fiscal year. Unilever seems to be betting that all its recent M&A in the food and beverage space that focuses on the hottest trends will pay off and boost its bottom line.