Unilever Jettisons Iconic Ice Cream Brands

I scream, you scream, but will anyone else scream for ice cream? 

Unilever, the consumer giant behind Hellman’s mayonnaise, Dove soap, and Vaseline, announced on Tuesday that it is parting ways with its stable of household name ice cream brands including Ben & Jerry’s, Popsicle, and Magnum. Unilever is in the midst of a rigorous cost-cutting process and didn’t immediately say how it plans to spin out the unit, but it’s not the only company looking to banana split from its ice cream business.

Avoiding a Meltdown

Last summer, Unilever hired a new CEO, Hein Schumacher, who could potentially bag himself a €17.4 million ($18.9 million) pay packet this year if he hits targets to whip the consumer goods giant into shape. To that effect, Unilever also announced it’s cutting 7,500 jobs, equivalent to roughly 5% of its global workforce.

Although Unilever has been in the ice cream business for more than a century, the company decided to cut the cord, citing the operational difficulty of the frozen dairy treat:

• Unilever said that, unlike its other offerings, ice cream possesses a more awkward supply chain (read: it needs to be kept cold), higher seasonality (cold only sells when it’s hot out), and has “greater capital intensity.” 
•  Per the Wall Street Journal, Unilever’s ice cream products accounted for the slowest growth in the company last year. There are also some investor worries mounting on the sugary treat market as a whole, with the shadow of Wegovy-esque weight-loss drugs looming ever larger.

Double Scoop: Unilever isn’t alone in wanting to shed its ice cream biz. In 2019, Nestlé re-jigged its ice cream unit to stand it up as a joint venture called Froneri with private equity firm PAI Partners. Froneri’s biggest brand is undoubtedly Häagen-Dazs, the thinking woman’s Ben & Jerry’s. This January, however, Bloomberg reported that PAI is shopping around for ways to sell its stake in Froneri. Looks like 2024 is the year no one minds if their ice cream falls off the cone.