Unilever's Ice Cream Business Drives Growth Amid Strategic Shift

Table of Contents

1. Key Highlights:
2. Introduction
3. Strong Performance from Ice Cream Sales
4. Strategic Shift Towards Beauty and Personal Care
5. Emphasis on Growth in Emerging Markets
6. Innovation and Digital Commerce
7. Financial Overview
8. The Future of Unilever

Key Highlights:

• Unilever's ice cream division experienced a 5.9% sales increase in the first half of 2025, significantly contributing to the company's overall revenue growth.
• The company plans to spin off its ice cream business, which includes popular brands like Ben & Jerry's and Magnum, into a separate entity by mid-November 2025.
• Unilever's strategic focus is shifting towards beauty and personal care, with recent acquisitions and divestments reflecting this transition.

Introduction

Unilever, one of the world's leading consumer goods companies, continues to adapt its business strategy in response to changing market dynamics and consumer preferences. As the company gears up to spin off its ice cream business, recent financial results reveal a robust performance that underscores the significance of this division. The ice cream segment, known for iconic brands like Ben & Jerry's, Magnum, and Cornetto, not only bolstered Unilever's overall sales but also marked a pivotal moment in the company's broader strategic shift toward beauty and personal care products.

The decision to separate the ice cream division reflects Unilever's commitment to concentrating its efforts on high-growth sectors. As it navigates through this transformation, the company aims to enhance its product offerings while maintaining a competitive edge in the market. This article delves into the details of Unilever's financial performance, its strategic initiatives, and the implications of the upcoming spin-off.

Strong Performance from Ice Cream Sales

Unilever's ice cream business has emerged as a standout performer, reporting a 5.9% increase in sales during the first half of 2025. This growth can be attributed to several factors, including a 3.8% rise in volume sales driven by favorable weather conditions that encouraged consumers to indulge in frozen treats. Additionally, a 2% boost in pricing further contributed to the division's success.

Magnum, in particular, led the charge with double-digit sales growth, capitalizing on its strong brand presence and consumer loyalty. Cornetto also showcased healthy growth, achieving high single-digit increases. The positive performance of these brands reinforces the idea that ice cream remains a staple indulgence for consumers, particularly during warmer months.

Unilever's strategic decision to spin off its ice cream division will result in the formation of the Magnum Ice Cream Company, which is expected to be publicly listed in Amsterdam by mid-November 2025. This move allows Unilever to retain a minority stake while enabling the new entity to operate independently and focus on its core strengths.

Strategic Shift Towards Beauty and Personal Care

The planned spin-off of the ice cream business is not an isolated decision but part of a larger strategy to pivot towards beauty and personal care. Unilever has been actively reshaping its portfolio to align with evolving consumer trends that favor personal care products over traditional food items.

The company has already divested its Vegetarian Butcher plant-based brand and is currently exploring the potential sale of its Graze snacking line. This shift underscores Unilever's commitment to focusing on higher-margin personal care and beauty products, areas that have shown consistent growth and resilience in the market.

During the first half of 2025, Unilever's personal care segment experienced a 4.8% sales increase, while beauty and wellbeing grew by 3.7%. These figures highlight the company's successful efforts to capture consumer interest in premium beauty products and self-care.

Emphasis on Growth in Emerging Markets

Unilever's growth strategy is not limited to product diversification; it also emphasizes geographical expansion, particularly in emerging markets. CEO Fernando Fernandez noted that the company's performance in developed markets has been strong, but there is a concerted effort to leverage opportunities in regions like India and the United States.

The company has made strategic acquisitions to enhance its personal care portfolio, including the rapid-growing brands Wild and Dr. Squatch. These acquisitions demonstrate Unilever's intent to penetrate niche markets and cater to evolving consumer preferences for natural, effective personal care solutions.

Innovation and Digital Commerce

As Unilever continues to evolve, the integration of innovative marketing strategies and digital commerce capabilities is paramount. The company is focused on building a marketing and sales machine that can drive brand desirability and ensure operational excellence across various channels.

Investments in digital commerce have become increasingly vital, as consumer shopping habits shift towards online platforms. Unilever is poised to capitalize on this trend by enhancing its e-commerce capabilities and utilizing digital marketing to reach broader audiences. This approach not only helps in maintaining consistent volume growth but also supports the company's goal of expanding gross margins.

Financial Overview

Unilever's overall revenues during the first half of 2025 reflect a balanced performance across its various divisions. While the ice cream segment led sales growth, the food category, which includes well-known products such as Hellman's mayonnaise and Marmite, saw a 2.2% increase in revenue. This demonstrates that despite the strategic pivot, Unilever's food products continue to hold significant market value.

The company reported a 3.8% growth rate in the second quarter of 2025, driven by positive volume growth across all business groups. This achievement is indicative of Unilever's robust operational strategies and its ability to navigate market challenges effectively.

The Future of Unilever

Looking ahead, Unilever's strategic priorities are clear: a continued focus on beauty, wellbeing, and personal care, alongside a commitment to disproportionate investment in key markets like the U.S. and India. This approach aims to position Unilever favorably in the competitive landscape, enhancing brand equity and market share.

As the company prepares for the spin-off of its ice cream business, stakeholders will closely monitor how these changes impact Unilever's growth trajectory and overall market performance. The separation could provide the ice cream division with the agility to innovate and respond to market demands more swiftly, while Unilever concentrates on its beauty and personal care initiatives.

FAQ

Why is Unilever spinning off its ice cream business?

Unilever is spinning off its ice cream business to focus more on beauty and personal care sectors, which have shown higher growth potential. The spin-off will allow the new entity to operate independently and concentrate on its core strengths.

What brands are included in Unilever's ice cream division?

Unilever's ice cream division includes popular brands such as Ben & Jerry's, Magnum, and Cornetto, all of which have contributed significantly to the division's recent sales growth.

How has Unilever's overall performance been recently?

Unilever reported a 5.9% increase in ice cream sales and a 3.8% growth in overall revenue during the first half of 2025. The personal care segment saw a 4.8% increase, showcasing the company's balanced performance across various divisions.

What is Unilever's future strategy post-spin-off?

Post-spin-off, Unilever aims to prioritize beauty and personal care, with plans for significant investments in emerging markets and enhancements in digital commerce capabilities to drive further growth.

How does Unilever plan to compete in the beauty and personal care market?

Unilever plans to compete in the beauty and personal care market by acquiring fast-growing brands, investing in premium product offerings, and enhancing its digital marketing and e-commerce strategies to better connect with consumers.