Unilever’s ownership of the beloved and quirky ice cream maker, Ben & Jerry’s, is nearing its conclusion as the British consumer products conglomerate announced plans on Tuesday to divest the brand along with its other ice cream businesses.
In a statement, Unilever cited its board’s strategic focus on prioritizing “superior brands with strong positions in highly attractive categories that have complementary operating models” as the rationale behind the decision. The spinoff encompasses Unilever’s additional ice cream labels, including Magnum and Cornetto.
Acknowledging the disparate operating models within the ice cream sector, Unilever emphasized that the separation would best serve the future growth trajectories of both ice cream and Unilever as a whole.
Among Unilever’s other ice cream brands are Cornetto, Magnum, and Kwality Wall’s. Bloomberg reports a stark disparity in profit margins between ice cream production and the sale of personal care products, a core sector for Unilever which also boasts brands like Dove soap, Hellman’s, Pepsodent, and Vaseline.
This move follows the involvement of activist investor Nelson Peltz, who joined Unilever’s board in 2022 advocating for reforms within the consumer goods giant. Peltz supported the appointment of Hein Schumacher as Unilever’s CEO in 2023 and endorsed Schumacher’s strategic blueprint to rejuvenate the company, according to Reuters.
Unilever, with a global workforce of 128,000, announced concurrently on Tuesday the initiation of a “productivity program” anticipated to result in the reduction of approximately 7,500 jobs, predominantly office-based. The spinoff of the ice cream division is slated for completion by the end of 2025.
The impending spinoff marks the conclusion of an unconventional corporate alliance that commenced in 2000 when Unilever acquired Ben & Jerry’s for $326 million. Notably, the Vermont-based ice cream maker stipulated an independent board at the time of acquisition, enabling it to maintain openly progressive stances on social and political issues, occasionally leading to friction with Unilever.
In 2022, tensions between Ben & Jerry’s and its parent company escalated when the former sued Unilever for selling its business in Israel and the West Bank to a local licensee, alleging a violation of Unilever’s commitment to cease sales in the region in 2021 in solidarity with the Palestinian cause.
By divesting Ben & Jerry’s and its associated brands, Unilever aims to redirect focus towards revenue enhancement in its remaining divisions, citing the distinct characteristics and operational nuances of the ice cream industry compared to its other sectors. A “demerger” creating a newly listed company is the anticipated route for the separation, although alternative options will be explored for the divestiture of Ben & Jerry’s and its counterparts.
