Unilever acquires UK snack brand Graze to accelerate growth in the better-for-you sector

The retail giant bought the company from The Carlyle Group for a reported valuation of £150m ($194m), although sources said Carlyle was initially hoping to attract around £300m ($388m).

Graze – which produces nuts, seeds, trail mixes and snack bars made with no artificial ingredients – was founded in 2008 as an internet-based customizable snack box delivery service.

It raised £2m ($2.5m) from UK investors Octopus Ventures and Draper Esprit before being acquired by US buyout group Carlyle in 2012. Anthony Fletcher – who joined the company in 2009 – led the takeover and became CEO.

The brand has a presence in over 30,000 retailers across the UK, including Sainsbury’s, Boots, WH Smith and Tesco, as well as US outlets such as Target, Walgreens and 7-Eleven.

Benefit from Unilever’s deep global reach

The purchase is Unilever’s first in the F&B industry under new CEO Alan Jope and comes a week after the company reported a 5% reduction in full-year turnover, owing to adverse currency impacts and the disposal of its spreads unit at the end of 2017.

In the earnings call, Jope said the firm’s priority was to accelerate growth.

“With so many of our brands enjoying leadership positions, we have significant opportunities to develop our markets, as well as to benefit from our deep global reach and purpose-led brands,”​ he told analysts.

Nitin Paranjpe, president of Unilever’s Food & Refreshment business, said the acquisition will accelerate its presence in the fast-growing healthy snacking sector.

“Graze is the leading healthy snacking brand in the UK – delivering consumers fabulously tasty snacking options, delivered in beautiful packaging. A truly multichannel brand, Graze offers personalization, convenience and great nutrition, brilliantly meeting the needs of millennial consumers.​

“Accelerating our presence in healthy foods and out-of-home, this is an excellent strategic fit for [us], and a wonderful addition to our stable of purpose driven brands.”​

He added Unilever will utilize Graze’s technology for other parts of its e-commerce portfolio.

The role technology plays in the food industry

Fletcher said the sale to Unilever marks a ‘transformational moment’ in the company’s growth journey.

“[We] believe that learning from Unilever’s sustainable living plan will become a key driver for the business.​

“Graze has an incredibly exciting future ahead as part of Unilever and we look forward to working closely with the team to keep on inventing new healthy snacks, as well as continuing to work to understand the role technology can play in improving the food industry.”​

The transaction was led by global investment bank Harris Williams’ Consumer Group, which specializes in M&A services.

 “Unilever is a strong cultural fit for Graze; they share a common vision for the roles healthy snacking and direct-to-consumer will play in helping to shape the future landscape of food,”​ said Ryan Freeman, a director at Harris Williams.

“The partnership between the two businesses provides a compelling platform for future growth.” ​