Heaptalk, Jakarta — Unilever announced the separation of its ice cream business unit and streamlining the company’s operations, impacting 7,500 employees globally.
The ice cream spin-off will begin immediately with completion expected by the end of 2025. Following the spin-off, Unilever will operate four business groups, including beauty & wellbeing, personal care, home care, and nutrition. This measure is expected to drive better performance through increased productivity and efficiency, product rationalization, and investment.
The decision was made based on the specific characteristics of ice cream, including a supply chain and point of sale that support frozen goods, a different channel landscape, more seasonality, and greater capital intensity. Generating a turnover of €7.9 billion or around US$8.5 billion (€1 equals US$1.08), the business owns five of the top 10 best-selling global ice cream brands including Wall’s, Magnum, and Ben & Jerry’s, with exposure in both in and out-of-home segments across global regions.
“The separation of Ice Cream and the delivery of the productivity program will help create a simpler, more focused, and higher performing Unilever. It will also create a world-leading ice cream business, with strong growth prospects and an exciting future as a standalone business,” said Chair of Unilever Ian Meakins in a written statement (03/19).
Simplifying portfolio and driving productivity
As a stand-alone business, ice cream’s management team will have the operational and financial flexibility to grow the business. Further, the team will also be able to allocate capital and resources to support the company’s specific strategies, including further optimizing its manufacturing and logistics network, as well as developing wide-reaching, flexible distribution channels.
Unilever CEO Hein Schumacher said, “Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability.”
Meanwhile, the layoff of 7,500 employees will impact most of those based in offices globally. Called a productivity program, this measure is estimated to save costs of around €800 million, approximately US$869.6 million, over the next three years.
“We are committed to carrying out our productivity program in consultation with employee representatives, and with respect and care for those of our people who are impacted,” Schumacher concluded.
