Unilever is home to the world’s most iconic ice cream brands, from Magnum to Ben & Jerry’s.
As part of the new restructuring, the company is spinning off its ice cream business, which turned over 7.9 billion euros ($8.6 billion) last year, into a separate division to improve its efficiency amid pressure from investors to streamline the business. .
London-headquartered Unilever said its ice cream division, which includes five of the world’s 10 best-selling brands, “has a completely different operating model.” This prompted the company’s board of directors to immediately separate it from the rest of the company.
The restructuring will be completed by the end of 2025, Unilever said. statement on Tuesday.
“As a standalone, more focused business, Ice Cream’s management team will have the operational and financial flexibility to grow its business,” Unilever said. A “demerger”, which would possibly result in a new listed company, was the most likely route to create a separate division, which was soon to become separate.
This isn’t the only major change Unilever has announced, with the company also planning to cut up to 7,500 “office roles” as part of productivity improvements. Media reported that most of the job cuts would be in London. The total number of personnel of the company is 128,000 worldwide.
“The ice cream division and implementation of the productivity improvement program will help create a simpler, more focused and more efficient Unilever company,” Unilever chairman Ian Makins said in a statement.
Unilever is catching up these are socks
The sweeping changes come a year after Hein Schumacher took over as chief executive, who took on a major role to jump-start the company’s weak performance. When Schumacher outlined his plans for Unilever’s future last year, focusing on its 30 strongest brands, investors were slow to buy into it. Fine. However, Schumacher said his strategy was supported by activist investor Nelson Peltz, who joined Unilever’s board of directors. in 2022.
Peltz is known for his aggressive demands for improvement and his interest in consumer-facing companies, including Procter & Gamble and Disney. He was builds his bet has been with Unilever for several years and has been among those putting pressure on the company to rethink its strategy. Peltz’s appointment to the London-based company was seen as a welcome boost for Unilever to revamp its operations.
The maker of Dove and Marmite soaps has been criticized for years for its failed bid for GSK-Pfizer in 2022 under former chief executive Alan Jope, and for failing to turn the business around to profitability following the COVID-19 pandemic.
The company’s underlying sales growth rose 7%. in 2023, but Unilever reported a 0.8% fall in revenue for the period. When the consumer products giant announced its results last month, Schumacher said its “competitiveness remains disappointing and the overall performance needs to improve.”
Baths trouble
Tuesday’s announcement marks a major development for Unilever as it moves forward with its plans to restructure and simplify its operations. By separating the ice cream business, Unilever will be able to achieve higher profits, the company said.
In turn, some Unilever ice cream brands have not been without problems. Ben and Jerry have was vocal in the past about his political stance, boycotting Israeli suppliers and withdrawing from Israeli-occupied territories. In January, Ben & Jerry’s called for a “permanent and immediate ceasefire.” in Gaza— a position that few consumer brands have openly taken, even as their sales have suffered due to the ongoing war between Israel and Hamas.
Russ Mold of UK investment platform AJ Bell said on Tuesday that one possible benefit of Unilever splitting up its ice cream business is that “it could quiet the ‘woke and bust’ noise.” Mold said the approach would otherwise seem reasonable and could move the company closer to achieving some of its goals.
“Less than a year into his tenure, CEO Hein Schumacher has certainly left his mark on the group,” Mold said. Schumacher will ultimately be judged on his ability to revive the fortunes of the remaining “simplistic” operation. Job cuts and efficiency savings are explicitly taken out of the corporate recovery agenda, but that doesn’t mean they’re without merit.