Multinational chemical company is giving ice cream the cold shoulder

Unilever, the British multinational consumer goods company, has disclosed intentions to cut 7,500 jobs and plans to divest its ice cream brands, including Ben & Jerry’s, Cornetto, Magnum, Talenti, and Wall’s, as part of a strategic move to streamline its operations.

The divestment of these beloved ice cream brands is expected to be completed by the end of 2025. This decision marks a significant shift for Unilever, which has long been known for its diverse portfolio encompassing various consumer goods, including ice cream, beauty products, and cleaning agents.

Unilever now dominates the global ice cream market, with its brands sold around the world.

The spin off buyer will boast five of the 10 best-selling ice cream brands worldwide with combined sales that amounted to $8.6 billion last year.

The company’s profit margin on churning out ice cream is less than half what it makes selling personal care products or brands including Dove soap, Hellman’s, Pepsodent and Vaseline. Unilever has 128,000 employees worldwide.

In a statement addressing the divestment, Unilever emphasized the importance of reshaping its business to adapt to changing market dynamics and consumer preferences. By refocusing its efforts on core product categories, the company aims to enhance its overall performance and unlock value for shareholders.

The environmental group Greenpeace escalated its campaign against Unilever, targeting the conglomerate’s plastic usage policies at its annual meeting using a confetti cannon that showered the venue with black paper birds, symbolizing the 140,000 signatories of an open letter urging Unilever’s Dove brand to eliminate single-use plastic.

Unilever recently acknowledged it will miss its 2025 target date for key plastics recycling goals and revised its pledge to reflect that reality – but the company’s head of packaging also said the failure contributed to its support for stronger regulations like extended producer responsibility.

The Europe-headquartered consumer products giant first announced a series of ambitious plastics recycling and material reduction goals in 2017. Those targets included a pledge that 100% of the company’s plastic packaging would be reusable, recyclable or compostable by 2025; a pledge to cut virgin plastic use by 50% by 2025; and a pledge to use 25% recycled plastic by 2025.

Friends of the Earth Indonesia and the Sulawesi community raised issues about the destructive consequences of Unilever’s palm oil usage while 100 Dutch youth activists pushed for substantial greenhouse gas reductions in line with the Paris climate agreement.

These actions are giving ecology a cold shoulder as the multinational food giant’s decision to offload its ice cream brands comes amidst a broader trend of consolidation and strategic realignment within the consumer goods industry.

As competition intensifies and consumer behavior evolves, companies are increasingly seeking to optimize their portfolios and allocate resources more efficiently.

Unilever’s move to divest its ice cream brands has attracted attention not only for its implications on the company’s future trajectory but also for the potential impact on the broader ice cream market. No buyers have yet been identified.

The spinoff will end an unusual corporate relationship that started in 2000 when the conglomerate bought Ben & Jerry’s, the Vermont-based ice cream maker that stipulated it would have an independent board, which allowed it to assert progressive stands on social and political issues.

Those views sometimes caused friction with Unilever.

In 2022, for instance, Ben & Jerry’s sued its parent company for selling its business in Israel and the country’s West Bank region to a local licensee, arguing that the sale violated Unilever’s pledge to end sales of its products in the region in 2021 as a show of support for the Palestinian cause.

Spinning off Ben & Jerry’s and its other ice cream brands will allow Unilever to focus on boosting revenue at its other divisions, but with iconic brands such as Ben & Jerry’s and Magnum about to change hands, industry observers are watching closely.

While Unilever is parting ways with several ice cream brands, the company still peddles plenty of products to consumers worldwide. As it navigates the transition period, Unilever is focused on its remaining portfolio of brands.

The decision to divest its ice cream brands comes at a time of significant change for Unilever, which has been actively restructuring its operations and pursuing strategic initiatives to position itself for long-term success. With a renewed emphasis on simplicity and focus, Unilever aims to emerge as a more agile and resilient organization capable of thriving in an increasingly competitive marketplace.