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LONDON – Unilever PLC plans to spin off its ice cream unit that is home to the Ben & Jerry’s, Wall’s and Magnum brands as part of a restructuring, the company announced March 19.
“Ice cream has a very different operating model,” the company said in announcing the plan. Separation will allow the ice cream business to become a simpler, more focused company, Unilever said, with the operational and financial flexibility it needs to thrive.
A separation could create a business with five of the top 10 ice cream brands in terms of global sales, which in 2023 totaled €7.9 billion, or nearly $8.6 billion, according to Unilever.
Plans for the spinoff have not been finalized, but a “demerger is the most likely separation route,” the company said.
Unilever said its restructuring begins immediately and will lead to four distinct business divisions across beauty and well-being, personal care, home care and nutrition.
When completed, at the end of next year, the productivity plan should deliver cost savings of more than $860 million dollars, the company said.
Unilever is a global consumer goods powerhouse with a portfolio that includes more than 400 brands, including Dove soaps, Knorr soups, and Hellmann’s mayonnaise. The U.S. is Unilever’s largest market but it sells its products in about 190 countries, working with some 50,000 supplier partners.
Spinning off ice cream will help Unilever’s management accelerate a plan, announced in October, that’s focused on “doing fewer things, better, with greater impact to drive consistent and stronger topline growth, enhance productivity and simplicity, and step up Unilever’s performance culture.”
The ice cream unit has sub-par growth compared to Unilever’s overall performance and has particularly struggled as rising consumer prices prompt more shoppers to switch to store brands.
Further, the “corporate mission” of Ben & Jerry’s has at times made the brand an uncomfortable fit within Unilever, which acquired the premium ice cream maker in 2000. Two years ago, the brand took on its corporate owner in a lawsuit seeking to block the company from resuming sales of its ice cream in Jewish settlements in occupied Palestinian territories. News of the lawsuit prompted a group of U.S. investors to file a lawsuit claiming they were not immediately informed by Unilever that Ben & Jerry’s independent board had halted sales in the territories.
More recently, Unilever has been impacted by a consumer boycott of businesses perceived to support Israel’s retaliation following the October 7 terror attack by Hamas on the Jewish state. Fernando Fernandez, chief financial officer for Unilever, said geopolitically focused consumer campaigns contributed to soft fourth-quarter sales in parts of Southeast Asia where majority Muslim populations have been critical of Israel’s retaliation.
