Unilever, the European giant consumer products maker behind Lipton teas and Hellmann’s mayo, has agreed to purchase a tiny condiments maker that has won shelf space at Whole Foods and other retailers.
The New York Times has reported that Unilever has agreed to purchase Sir Kensington’s, which makes ketchup, mayonnaise, and mustard products that are all GMO free. Terms of the deal for Sir Kensington—which was founded in 2010—weren’t disclosed. The small food startup had raised $8.5 million in a Series A round back in 2015, a fundraising round led by consumer-brands focused investment firm Verlinvest, which also previously invested in Vitaminwater and Vita Coco.
The acquisition of Sir Kensington’s is the most notable deal from Unilever since it agreed to acquire Seventh Generation last fall. Unilever also generated headlines when it paid $1 billion for Dollar Shave Club last summer.
But the Sir Kensington deal by Unliver is the latest by a “Big Food” manufacturer to acquire a smaller target at a time when consumers are increasingly willing to try out new brands they find at the local grocery store. Sir Kensington, as a mayo maker, is essentially a threat to legacy brands like Hellmann’s at a time when consumers are willing to give upstart brands a chance as they explore new flavors and also want “cleaner” labels. Hellmann’s has aimed to be more on trend via efforts like the recent move to only use cage-free eggs for the mayo and mayo dressing sold in the U.S.
The Sir Kensington deal is expected to close in the next few weeks. Unilever said co-founders Mark Ramadan and Scott Norton will continue in their roles at the company.
Other recent Big Food deals for smaller rivals have included Conagra’s (cag) recent purchase of Duke’s meat snacks brand and General Mills’ (gis) deal for meat snack maker EPIC Provisions. A number of Big Food makers—including General Mills, Kellogg (k) and Campbell Soup (cpb)—have also set up venture-capital arms to invest in food startups.
But Unilever is in a different position as it spurned a gigantic $143 billion merger offer from Kraft Heinz (khc) in late February and as a result, is now under pressure from shareholders to prove that it has a strategy in place to go it alone. Unilever, which earlier on Wednesday touted a “strong start” to 2017, is also weighing the sale of some of the company’s food brands that fall under its spreads business. Some Wall Street analysts have speculated that Kraft Heinz may come back to Unilever with an offer for just the food/beverage portfolio, which includes Ben & Jerry’s ice cream, Talenti gelato, and now—Sir Kensington’s.