- Unilever CEO announces spin-off of ice cream business for 2025
- Ice cream sales dip despite brand prestige; strategic shift underway
- Focus shifts to core brands; speculation on future brand sell-offs
A month ago, when the newly-appointed Dutch CEO of Unilever, Hein Schumacher, addressed analysts, his discontent with the largest ice cream company in the world was evident.
Despite the worldwide warming phenomenon, iconic brands, including luxury connoisseur Magnum, eccentric Ben & Jerry’s, and traditional Wall’s, she endured a disastrous year. Although sales volumes had decreased by 6 per cent, the value had increased.
There was no indication that ice cream would follow margarine spreads and tea as it entered the establishment. However, an unprecedented choice was already in progress behind the façade of Unilever’s iconic white art deco headquarters at Blackfriars in London, which overlooks the Thames.
With the Vermont-based board of Ben & Jerry’s agitating over Palestine and Gaza, ice cream had become an economic and political diversion for the company’s new leader.
Historically, the Anglo-Dutch behemoth, which is ranked as the fourth wealthiest company on the London Stock Exchange,’s corporate opulence and bureaucracy would have hindered the ability to make prompt decisions.
Nelson Peltz, a corporate agitator, was present in the boardroom when Schumacher realised he could act swiftly. He startled the City last Tuesday by announcing his intention to spin off ice cream into a separate company and distribute the shares to existing shareholders. The disposal of the complex would be finalised in 2025.
Unilever pretentiously refers to food, or nutrition, as its diminishing secret. Last year, ice cream comprised over 50% of the food turnover of the fast-moving consumer food division, which totalled £11.3 billion.
In an organisation where its contribution is eclipsed by that of beauty and wellness brands like Dove and Toni & Guy and home care products like Domestos, Persil, and Comfort, nutrition has developed a sour relationship. Sales consistently double for newly acquired fashionable health brands, including SmartyPants Vitamins, which are among the show’s shining stars.
The group’s future nutrition was immediately called into doubt by the ruthless decision to abandon ice cream. After the announcement to discontinue ice cream, “bets are in as much as the future of Unilever’s remaining food business,” according to the closely followed trade publication JustFood.
Which other well-known brands are also scheduled to be eliminated?
The Mail on Sunday is aware that, with the exception of Knorr Soups and Hellmann’s Mayonnaise, all other nutrition brands, including Bovril, Marmite, and the student staple Pot Noodle, could be eliminated.
In an effort to enhance performance and rival the publicly traded global competitors Nestle and Procter & Gamble more effectively, it will be crucial to capitalise on critical assets.
Unilever possesses a significant competitive edge in burgeoning markets like South Asia and Latin America, where consumers are insatiably curious about Western brands that are regarded as luxury or prestige goods.
The ability to deliver large volumes and facilitate supply and distribution is fundamental to Unilever’s future in these markets. Knorr, a renowned soup manufacturer based in Germany, Hellmann’s mayonnaise and other condiments, and several other culinary brands among the group’s dozens are considered vital to the future. In contrast to the highly seasonal nature of ice cream and the numerous distribution challenges it presents, Hellmann’s and Knorr’s products are dependable.
This raises the question of which nutrition brands can be sold in an adequate volume in numerous international markets. An abundance of anomalies can be observed, including Bovril, a staple of British roast beef dinners, and Marmite, among others.
Marmite yeast spread, produced in Burton upon Trent, is formulated using byproducts of nearby distilleries. It is an iconically British product that has limited international distribution. Due to its extensive history with Unilever, which dates back to the early 20th century, Schumacher may need help to divest. However, similar to previous CEOs, he sees the attention it garners to be irritating despite the fact that it represents a negligible portion of the enterprise.
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The shift in Unilever’s trajectory was apparent even prior to Schumacher’s entry. In 2018, while then-Unilever CEO Paul Polman was contemplating moving the company’s share listing to Rotterdam, the company’s finance team provided me with a confidential graph illustrating that personal and home care brands had surpassed nutrition in importance and were soaring for more than a decade.
The research laboratories situated on the Wirral, where Unilever was initially established, housed the ingenuity and pioneering thinking that the company cherished. Schumacher and his team will have a challenging task over the following year as they implement 7,500 “office” redundancies, increase productivity, and package ice cream into a separate enterprise.
The departure lounge will feature even more radical transformations in nutrition brands, including smoked sausage Unox, Pot Noodle and Bagel Bagel in Israel.
Without a doubt, a fundamental transformation is in progress.
