Ben & Jerry’s and Magnum will form the core of an $8 billion ice cream company

Ben & Jerry’s and Magnum will form the core of an $8 billion ice cream company - Business - News

Unilever’s Ice Cream Business to Transform into a Standalone Entity: A New Chapter in Global Frozen Treats

Unilever, the world-renowned consumer goods company, has announced its plans to separate its ice cream business as part of a strategic move aimed at enhancing sales and profitability. This decision will also lead to the reduction of approximately 6% of the workforce.

Since its inception a century ago, Unilever has been at the helm of the global ice cream market, with its brands renowned worldwide. The forthcoming entity is expected to inherit five of the top 10 international best-selling ice cream brands: Magnum, Ben & Jerry’s, Breyers, Walls, and Cornetto. In 2021, the sales revenue from these brands, along with Unilever’s other ice cream offerings, reached an impressive €7.9 billion ($8.6 billion).

Unilever CEO, Hein Schumacher, shared his perspective with journalists, emphasizing the unique traits of the ice cream industry: its seasonal demand and the necessity for a supply chain capable of supporting frozen goods. He explained that “the future growth of Unilever and ice cream is best served by separating the business.”

As part of a larger growth strategy revealed in October 2023, Unilever pledged to focus on “doing fewer things better and with greater impact.” Schumacher elaborated, stating that “the changes we are announcing today will help us accelerate that plan.”

The roots of Unilever’s ice cream business can be traced back to 1913 when Thomas Wall established a family butcher shop in London, which began selling ice cream during the summer months. Since then, Unilever has expanded its ice cream portfolio with over two dozen major brands from around the world. Today, it sells ice cream in more than 60 countries and holds nearly 20% of the global ice cream market share—a larger portion than that of the next four leading competitors combined, according to Euromonitor’s 2020 findings.

However, last year, Unilever’s ice cream sales faced a setback as consumers tightened their budgets amid economic uncertainty. The company reported in its earnings statement that “ice cream had a disappointing year with declining market share and profitability.”

Matt Britzman, an equity analyst at Hargreaves Lansdown, commented on the announcement, explaining that “it was not a huge shock” given ice cream’s disparate nature compared to other product lines and its recent performance. Schumacher mentioned that the new ice cream company is most likely to go public on the stock market by the end of 2025, although other options will be explored over the next 18 months to secure the best possible outcome for shareholders.

Post-spinoff, Unilever will consist of four divisions: beauty and wellbeing, personal care, home care, and nutrition. In addition to the ice cream separation, Unilever launched a “major productivity program” aimed at generating €800 million ($868 million) in cost savings over the next three years and eliminating 7,500 jobs, predominantly office-based roles. Schumacher noted that “we are looking at various layers in the organization,” including positions based in London and other countries, as the company adapts to technology-driven efficiencies.