In a strategic move to enhance sales and profitability, Unilever has disclosed its intention to spin off its ice cream division, forming an independent entity worth $8 billion. This decision, unveiled on Tuesday, entails a restructuring effort expected to trim approximately 6% of the workforce.
After decades of establishment, Unilever stands as a dominant force in the global ice cream market, with its renowned brands traversing international borders. Emphasizing the drive for a more streamlined approach, the company stated, “Following separation, Unilever will become a simpler, more focused company.”
The newly fashioned enterprise will showcase a portfolio including five of the world’s top-selling ice cream brands: Magnum, Ben & Jerry’s, Breyers, Walls, and Cornetto. Collectively, these brands, alongside Unilever’s other ice cream offerings, amassed €7.9 billion ($8.6 billion) in sales last year.
CEO of Unilever, Hein Schumacher, highlighted the strategic rationale behind this move, citing the unique dynamics of the ice cream industry, such as seasonality in demand and the requisite infrastructure for frozen goods.
Schumacher further elaborated on Unilever’s growth strategy, emphasizing a commitment to refining operations for amplified impact. “The changes we are announcing today will help us accelerate that plan,” he affirmed.
The roots of Unilever’s ice cream division trace back to 1913 when Thomas Wall commenced selling ice cream from his family butcher shop in London. Since then, Unilever has acquired a multitude of prominent ice cream brands worldwide.
Despite commanding nearly a fifth of global ice cream sales across 60 countries, Unilever faced setbacks last year due to dwindling consumer spending on non-essential items. “Ice cream had a disappointing year (in 2023) with declining market share and profitability,” Unilever conceded in an earnings statement.
Financial analysts like Matt Britzman from Hargreaves Lansdown expressed little surprise at Tuesday’s announcement, noting the distinctiveness of the ice cream division compared to other product lines within Unilever’s portfolio.
Looking ahead, Unilever anticipates listing the new ice cream entity on the stock market by the close of 2025, exploring alternative strategies to optimize shareholder value. This spinoff will leave Unilever with four core divisions: beauty and wellbeing, personal care, home care, and nutrition.
In tandem with this strategic shift, Unilever unveiled a significant productivity initiative poised to yield €800 million ($868 million) in cost savings over the next three years, accompanied by 7,500 job cuts primarily in office-based roles. Schumacher emphasized a comprehensive review of organizational layers, targeting head office positions in London and abroad to harness technological advancements for enhanced efficiency.
