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

By Hanna Ziady, CNN

London (CNN) — The world’s biggest ice cream business is about to go it alone.

Unilever announced Tuesday that it plans to spin off its ice cream unit as part of a drive to boost sales and profitability, which will also entail cutting around 6% of the workforce.

After a century-long endeavor, Unilever now dominates the global ice cream market, with its brands sold around the world. “Following separation, Unilever will become a simpler, more focused company,” it said in a statement.

The newly minted firm will boast five of the 10 best-selling ice cream brands worldwide, namely Magnum, Ben & Jerry’s, Breyers, Walls and Cornetto. Sales of these and Unilever’s other ice cream brands together amounted to €7.9 billion ($8.6 billion) last year.

“The future growth of Unilever and ice cream is best served by separating the business,” Unilever CEO Hein Schumacher told journalists. He pointed to ice cream’s “distinct characteristics,” such as season-dependent demand and a supply chain that must be able to support frozen goods.

Under the growth plan unveiled in October, the UK-based company “committed to do fewer things better and with greater impact,” Schumacher added in the statement. “The changes we are announcing today will help us accelerate that plan.”

The origins of Unilever’s ice cream business can be traced back to the summer of 1913, when Thomas Wall started selling ice cream from his family butcher shop in London.

Unilever has since snapped up some two dozen major ice cream brands from around the world.

Today, it sells ice cream in more than 60 countries and commands almost a fifth of global ice cream sales, a bigger share than that of the next four biggest sellers combined, according to 2020 figures from market research firm Euromonitor.

But its ice cream sales took a hit last year as cash-strapped consumers cut back on non-essential spending. “Ice cream had a disappointing year (in 2023) with declining market share and profitability,” Unilever said in an earnings statement.

Commenting on Tuesday’s announcement, Matt Britzman, an equity analyst at online investment platform Hargreaves Lansdown, said the move was not “a huge shock.” “Ice cream always looked like the odd one out when you compare it to other product lines, and performance has struggled of late.”

According to Schumacher, Unilever will most likely list the new ice cream company on the stock market by the end of 2025, although it will consider other options “that come to the table” over the next 18 months, with a view to maximizing value for shareholders.

The spinoff will leave Unilever with four divisions: beauty and wellbeing, personal care, home care and nutrition.

Unilever also launched a “major productivity program,” which will result in €800 million ($868 million) in cost savings over the next three years and 7,500 job cuts — predominantly office-based roles — as the company uses technology to boost efficiency.

“We are looking at various layers in the organization,” including head office roles in London and positions in other countries, Schumacher said.

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