Unilever to propel growth through strategic separation of ice cream division
Unilever, a global leader in consumer goods, has announced a significant reorganization strategy aimed at accelerating its Growth Action Plan (GAP). At the forefront of this strategy is the separation of its Ice Cream business and the initiation of a comprehensive productivity program. This strategic move is anticipated to refine the company’s focus on superior brands with strong market positions, thereby enhancing Unilever’s innovation, marketing, and go-to-market capabilities. The decision to separate the Ice Cream division stems from its distinct operational model, which is markedly different from Unilever’s other business units.
The separation of the Ice Cream business is projected to redefine Unilever’s operational landscape, streamlining the company into four core Business Groups: Beauty & Wellbeing, Personal Care, Home Care, and Nutrition. This reorganization is expected to simplify Unilever’s structure, making it a more focused entity with enhanced operational and financial agility. By divesting the Ice Cream segment, Unilever aims to better leverage its brands’ potential, focusing on areas with higher growth prospects and scalability.
The decision to separate the Ice Cream business underscores Unilever’s commitment to optimizing its portfolio for accelerated growth. The Ice Cream segment, with a turnover of €7.9 billion in 2023 and home to five of the top 10 global ice cream brands, is poised for future growth under a different ownership structure. This move is designed to empower the Ice Cream business with the operational and financial independence necessary for its strategic growth initiatives, including optimizing its manufacturing and logistics network.
Building on the momentum of its Growth Action Plan, Unilever is set to implement a comprehensive productivity program. This initiative is aimed at streamlining operations, reducing costs by approximately €800 million over the next three years, and mitigating operational dis-synergies post the Ice Cream division’s separation. The productivity program is expected to simplify the organizational structure, enhance accountability, and foster a culture of efficiency through technology-driven solutions and process standardization.
The reorganization efforts, including the productivity program, are expected to impact approximately 7,500 office-based roles globally. Despite the anticipated restructuring costs, Unilever remains focused on achieving mid-single-digit underlying sales growth and modest margin improvements post-reorganization. This strategic overhaul, as articulated by Unilever’s Chair Ian Meakins and CEO Hein Schumacher, is envisioned to transform Unilever into a higher-growth, higher-margin business with a sharpened portfolio capable of delivering sustainable growth and improved profitability.
Unilever’s decision to separate its Ice Cream business and launch a productivity program marks a strategic pivot towards optimizing its brand portfolio and operational efficiency. This move not only reflects the company’s adaptability to changing market dynamics but also its commitment to sustainable growth and shareholder value. As Unilever embarks on this transformational journey, it is poised to further cement its position as a leading consumer goods company with a focus on innovation, sustainability, and profitability.