Hellmann's vs. Kraft mayonnaise: Battle of the Brands


This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

I was preparing to make a sandwich recently, which for me is quite an undertaking. The ingredients need to be fresh, sliced to appropriate thickness and of the tastiest varieties. I got out all the fixin's and took hold of the appropriate tools, then I realized that I was missing one key ingredient. I was yet to procure the mayonnaise.

I went into the refrigerator where I knew I'd find the delectably smooth and scrumptious stuff. You can probably imagine my shock when I found not one but two brand new unopened squeeze bottles of mayonnaise right there on the door shelf in between the horse radish and the barbecue sauce. As if that wasn't trouble enough, when I reached in to take one of the bottles for my project, I realized that each of the bottles was a different brand. Oh the sheer unfairness of it, that meant I would have to decide which brand would appropriately bless my sandwich.

Rather than make a rash decision by simply grabbing a bottle and applying the dressing, I decided to carefully weigh my mayonnaise choice. After all, I wanted the perfect mayo for the perfect sandwich. I already knew that the two products were nearly identical in taste and texture. I needed to find the deeper meaning. I grasped both bottles, one in each hand, and carefully initiated my sandwich dressing analysis. Both bottles were plastic and totally squeezable. Each had appropriate tamper protection and a wide, flip-top cap that can be used to stand the bottle inverted. Each had a serving opening designed to apply the mayo in a flat ribbon outlay. The caps were blue and the bottles were clear. So far it was a dead heat.

The Hellmann's label had a country feel to it, which seemed to impart the messages of picnicking and home cooking, while the Kraft label hinted at elegance and made a statement by claiming award-winning status for the product. I noted that blue and gold were the theme colors for both products. Even in the ingredient and nutritional information, I was unable to discern any truly significant difference. My sandwich was still waiting.

I decided that I would need to make my choice based on the financial aspects of the product manufacturers, so I woke up my computer and proceeded to research the makers of each product, while ever mindful that my lettuce was starting to wilt. Kraft is of course manufactured under the Altria banner. Altria Group Inc. (NYSE: MO) owns over 85% of Kraft Foods, but my financial analysis focused specifically on Kraft Foods Inc. (NYSE: KFT) because they issue stock under their own ticker symbol. The Hellmann's brand is owned by Unilever and is co-marketed with Best Foods mayonnaise, each covering a separate geographic region. I found that my Hellmann's financial focus would be on Unilever (NYSE: UN).

This then was the thumbnail analysis I accomplished. This is much the same technique I use to determine if a stock is one I'd like to invest in. Both companies exhibit extensive diversity, Kraft via it's ownership by Altria and Unilever by it's own market dynamics. Both companies show me deeply entrenched stability, and each has a wide and steady stance. Both companies provide a level of transparency and investment clarity that would be expected from companies of their sizes. Both companies have well-constructed, informative, and easy-to-use websites.

Unilever has a current P/E of 20.52 and Kraft's is 17.30. This tells me that if things remain steady, Kraft would return my investment dollars sooner. Unilever had earnings of 1.36 per share for fiscal 2006 and Kraft's were 1.94 per share. Unilever has been lagging analyst expectations overall, while Kraft has been meeting or slightly exceeding the performance expected of them. Unilever performance has been trending downward, while Kraft performance remains positive and steady. Analyst sentiment for Unilever is generally leaning negatively, and the pros are calling it a sell. Analysts are positive overall on Kraft and the general consensus is hold.

I returned to my sandwich-building project with my decision clearly in hand. Kraft was chosen to dress my sandwich because I deemed it my best investment. When returning to the kitchen I discovered that I had one additional problem to address. In my absence, my wife had applied mustard to my assemblage and had eaten it. Oh well, I mused, at least I knew which mayo I would have applied. Which product would you have chosen? We'd really like to know!

Be sure to vote in our poll for Kraft or Hellmann's as your preferred brand, and lets us know why you love it in the comments. Results of all Battle of the Brands match-ups coming soon.

Reader Comments (Page 2 of 2)

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