Symington’s feels like Chicken Tonight and Ragu
Unilever said the deal followed a strategic review of both brands in the UK and Ireland, which began in June 2010.
The food giant will continue to produce Ragu and Chicken Tonight at its facility in Oss, Holland, for at least three years. No Unilever staff will be affected.
Both brands are commonly seen as a little tired and under-invested, and face stiff competition in wet ambient sauces from the likes of Homepride, Napolina, Dolmio, Loyd Grossman and Unilever’s own Bertolli range.
Lack of love
Symington's expects to turnover £118m this year. Asked how the firm planned to revive the brands’ fortunes (with annual gross sales for both fairly static at around £35m), marketing director Henrik Pade told FoodManufacture.co.uk:
“Your point about lack of love recently is key. Essentially the two brands have been seriously neglected in recent years, but have solid awareness below the surface.
“They’re a bit like an old house, with all the structural work OK, but the paint peeling off.”
Pade said Symington’s would spend money reformulating the products to make them best in category, as well as creating new pack formats and redesign the artwork.
One possible option was building on Ragu’s American-Italian heritage dating back to 1938 New York, he added.
Cross-category relevance
In the longer term, Pade said that Symington’s believed the brands had relevance across the convenience foods category.
“But initially we will concentrate on restoring the jar business to its former glory,” he said, adding that the brands would lend the company a new growth avenue.
A Unilever spokesman said: “Unilever is very pleased with the outcome of this review, and we are confident that both these brands will have a successful future under the stewardship of Symington’s.”
Julian Wild, corporate finance partner, Rollits, said he understood that Unilever was “very keen” to continue production, and it was a “key element in doing a deal”.
Unilever’s food future?
He said that Symington’s was a “fairly logical” buyer given its stable of “heritage brands”, and had had previous dealings with the financial advisory firm handling the sale, Spayne Lindsay.
Marketing consultant Nick Cloke told FoodManufacture.co.uk recently that, despite category growth (wet ambient sauces are worth £560m in the UK with sales up 8% in 2009), Unilever would be reluctant to spend money revitalising Ragu and Chicken Tonight.
Cloke said the outlay necessary for Unilever was probably not warranted, given their relatively small contribution to the bottom line of a world food group worth around £12bn.
Presented with this viewpoint, Wild said: “Well, of course there’s speculation as to whether Unilever will stay willl remain in food much longer. And this deal is perhaps a sign that they’re starting to question where they put their time and effort.
“Chicken Tonight, certainly, hasn’t functioned as a brand for a long time.”
