Unilever’s business in spreads looks about as solid as warm margarine. The spreads category includes such unsung staples as butter, peanut butter, cream cheese, Marmite, even Nutella—you see how this works. Spreads make up 7 percent of sales at Unilever, and the consumer-goods conglomerate is focused heavily on butter substitutes—so the spread sadness seems to be largely a story of margarine in decline. The company sells the stuff under a dizzying array of brand names—I Can’t Believe It’s Not Butter, Country Crock, Imperial, Brummel & Brown, Promise, Becel, Flora, Rama, and Blue Band, among them—and there’s little upside in the lot.
Last week, when Unilever reported a 1 percent drop in sales volume for all its food products over the first half of the year, the company noted the particular pain caused by “a decline in spreads” and singled out some problems with margarine as the culprit. Consumers didn’t like the taste of certain brands (Flora, in particular, isn’t fooling anyone into thinking it could be butter), rivals have been competing on price, and shoppers prefer natural products now that man-made fat has come to seem like a superfluous idea. While growing health awareness may be one factor, consumers don’t appear to be categorically averse to buying fat—sales of Unilever’s Hellmann’s products are growing. A wide range of nonbuttery alternatives are vying for toast-topping privileges, too, including the fast-growing hummus segment. These are problems that even Fabio’s flowing locks would be powerless to fix.