Speaking to FoodNavigator-USA after striking the deal, co-founder Scott Norton said he and co-founder Mark Ramadan had been wooed by several CPG suitors, but had not pursued a deal, “because frankly we didn’t feel it was the right thing long term for the brand, or maybe the principals didn’t overlap as well as they do with Unilever, so really it was the first time we’d considered something like this.”
That said, it wasn’t an immediate ‘YES' when Unilever came calling a few months ago, sad Norton: "We wanted to make sure that we weren’t going to be swallowed up and de-prioritized.
"When you’re approached by a large company you worry about loss of control, loss of autonomy, commoditization, but these concerns were assuaged as we got to know the people and we were able to form a plan. It’s not like we’re selling out… they are buying into what we’ve done.”
But in that case, why not just carry on doing your own thing?
While Sir Kensington’s had been growing at an explosive rate under its own steam, partnering with Unilever would simply enable the brand reach a wider audience more quickly, without compromising its values, said Norton.
“Yes, we have begun to have great success with conventional accounts, we’re launching in 1,200 more Krogers very shortly and we’re expanding in Safeway, ShopRite and Costco. But as much as we like to think that retailers look at the data and see our growth, there is such an attention economy out there, and condiments is a historically low-growth category that hasn’t had a lot of category and buyer eyeballs on them, that it’s not easy for them to capitalize on all of the opportunities.”
There is a massive opportunity here to grow the condiments category
He added: “The deal with Unilever isn’t just about getting access so we can make our standard 15 minute pitch [to more large retailers], but it’s about really being able to sit down with retailers and help them recognize that there is a massive opportunity here to grow the category, increase their profitability by encouraging people to trade up, and signal what they stand for as retailers, because there’s a new generation of consumers out there who believe that condiments are food too.
“If we’d have engaged in this three years ago it might have broken us, but Unilever can offer us such incredible leverage points, for customers and with suppliers, especially when it comes to quantitative and data driven marketing expertise.”
The shifting American palate
As for mayo, alternative oils (eg. avocado) and eggless products are clear growth opportunities, he said, but in condiments in general, consumers are looking for products made with a real food ethos, cleaner labels, global flavors (Mediterranean, Latin, and Asian) and more adventurous recipes, he added.
We don’t want to jump the shark
As for the Sir Kensington’s brand, while there are obvious opportunities to expand into new categories, right now, the focus is on condiments, he said. “Right now we have so much more work to do with condiments, and our philosophy and business strategy has always been do one thing and do it well before moving onto something else. You have to go deep before you go wide, or you get distracted.
“It’s easy to add new line items on an excel spreadsheet, but customers don’t like it when you don’t have a license to go into categories, that’s how you really lose trust. We don’t want to jump the shark.
"So can Sir Kensington’s bring its ethos to other categories? Absolutely, but that’s a longer-term opportunity.”
Lines of demarcation
So where are the lines of demarcation between Unilever and Sir Kensington’s, which will continue to operate from its offices in New York City after the deal closes?
“The key areas we want to protect are of course product innovation, product values, ingredient standards and the culture, creative, marketing and team,” said Norton. “But when it comes to customer access, being able to have the ear of the leading retailers in America, being able to have category management relationships, that’s where we’ll look to rely on Unilever as a very high priority.
“Additionally, operationally they run a very tight ship and they have made similar products for nearly a hundred years, so we’ll continue to manage operations and sourcing but we’ll have access to the network and expertise they offer.
“We’re going from a kid’s toolbox to Daddy’s workbench.”
Terms of the deal - which is expected to close in the coming weeks - were not disclosed, although Bloomberg reported a price of "about $140m" citing "a person familiar with the transaction." Read more about it HERE.