Unilever bought Ben & Jerry's 24 years ago. Now it's exiting the ice cream business.
Unilever's ownership of quirky ice cream maker Ben & Jerry's is coming to the end of its sometimes rocky road. The British consumer products company said Tuesday it plans to spin off the brand as well as its other ice cream businesses.
In its announcement, Unilever said the decision is based on its board's view that the company should focus on "superior brands with strong positions in highly attractive categories that have complementary operating models." The spinoff will include Unilever's additional ice cream brands, such as Magnum and Cornetto.
The ice cream businesses have "a very different operating model, and as a result the board has decided that the separation of ice cream best serves the future growth of both ice cream and Unilever," it added.
Unilever's other ice cream brands include Cornetto, Magnum and Kwality Wall's. The company's profit margin on churning out ice cream is less than half what it makes selling personal care products, according to Bloomberg. Unilever is also known for brands including Dove soap, Hellman's, Pepsodent and Vaseline.
The separation comes after activist investor Nelson Peltz joined Unilever's board in 2022 to push for changes at the consumer product company. Peltz had backed the appointment of Hein Schumacher as Unilever's new CEO in 2023, as well as Schumacher's strategic plan to revitalize the business, according to Reuters.
Unilever, which has 128,000 employees worldwide, also said Tuesday it is launching a "productivity program" that is expected to lead to a reduction of about 7,500 mostly office-based jobs. The spinoff of the ice cream division is likely to be completed by the end of 2025.
Chill factor
The spinoff will end an unusual corporate partnership that began in 2000 when Unilever bought Ben & Jerry's for $326 million. At the time of the purchase, the Vermont-based ice cream maker stipulated that it would have an independent board, which allowed it to continue taking openly progressive stances 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, the company said.
"Ice cream has distinct characteristics compared with Unilever's other operating businesses," Unilever said. "These include a supply chain and point of sale that support frozen goods, a different channel landscape, more seasonality, and greater capital intensity."
Unilever said a "demerger" of its ice cream businesses that creates a newly listed company is the most likely route, although other options for separating Ben & Jerry's and other ice cream brands will be considered.
—With reporting by the Associated Press.