BUSINESS STRATEGY

FMCG giant Unilever is giving its ice-cream division the cold shoulder

By our African Marketing Confederation News Team | 2024

Company announces 7,500 job cuts and plans to spin-off its underperforming ice-cream division into a separate business operation.

Unilever, the global FMCG giant, has announced that it is to cut 7,500 jobs around the world, as well as spin off its ice–cream division into a new business.

Photo credit: Unilever

 

The overhaul is part of a new business strategy aimed at saving the company approximately US$870-million over the next three years. 

 

UK-based Unilever is the custodian of some of the world’s best-known brands – among them Dove soap, Hellmann’s mayonnaise, Vaseline and Sunlight. Worldwide, it employs around 128,000 people. 

 

The company has come under pressure in recent years to streamline its sprawling business, which is managed mostly from London. The food business, though, operates from Rotterdam in the Netherlands. 

 

Unilever’s ice-cream division is headquartered in Rotterdam and comprises some of the world’s top-selling ice-cream brands. These include Magnum, Ben & Jerry’s, Wall’s and Cornetto. 

 

Ice cream is 16 percent of group sales 

 

Ice cream accounts for 16% of group sales and has an annual turnover of around $8.6-billion. The spin-off from Unilever is expected to be completed by 2025. 

 

The spin-off of the business, also called a de-merger, is the separation of a large company into two or more smaller organisations.  

 

According to Hein Schumacher, who was appointed as Chief Executive of Unilever in January 2023, ice-cream is different from the rest of the business because of its frozen supply chain, high seasonality, and high capital requirements. 

 

“The separation of ice-cream and the delivery of the productivity programme 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 Ian Meakins, Chair and Non-Executive Director of Unilever. 

 

Matt Britzman, an equity analyst, told the London-based The Guardian newspaper: “Ice-cream always looked like the odd one out when you compare it to other product lines, and performance has struggled of late.” 

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.