Ben & Jerry’s may soon have a new owner after the company criticized its parent company over its Israeli activities.
Unilever’s new chief executive says he wants to spin off the company’s ice cream division, along with brands such as Ben & Jerry’s, Magnum and Popsicles, likely to go public as a separate company, but he also has no plans to invest in another company. He said a complete sale is also possible.
The move, which will also cut around 7,500 jobs, is part of a restructuring plan aimed at by Hein Schumacher, who took over as CEO from Alan Jope last year.
Founded by childhood friends Ben Cohen and Jerry Greenfield, Ben & Jerry’s was acquired by Unilever in 2000 for $326 million.
As part of the agreement, Ben & Jerry’s board of directors was granted autonomy to represent the brand’s position on high-profile political issues.
Earlier this year, Ben & Jerry’s Board of Directors announced that it would “promote peace and permanency” between Israel and the Palestinian terrorist group Hamas, which launched a cross-border attack on October 7, killing about 1,200 soldiers and civilians. called for an immediate and effective ceasefire.
Unilever board member Nelson Peltz resigns from his position at the Simon Wiesenthal Center, a Jewish group that had called for a boycott of the ice cream brand, following Ben & Jerry’s chairman Anuradha Mittal’s call for a ceasefire. did.
The brand board’s vocal agitation on behalf of the Palestinian people has caused a stir not only within Unilever but also among the company’s shareholders.
In January, North Carolina withdrew its severance pay from Unilever in protest of Ben & Jerry’s announcement that it wanted to boycott Israeli settlements.
In 2021, the maker of popular flavors such as Chunky Monkey and Cherry Garcia clashed with Unilever after the company announced it would stop selling its products in Jewish settlements in the West Bank.
The move drew fierce backlash from a company that maintains autonomy over issues such as branding and marketing.
In response, Unilever sold the Israeli branch of Ben & Jerry’s to local licensee Avi Zinger, who continues to sell ice cream under the company’s brand name.
Ben & Jerry’s responded to the move by filing a lawsuit against Unilever.
The lawsuit was settled in 2022.
Investors supported the plan, sending shares in Unilever, one of the world’s largest consumer goods companies, up nearly 6% at one point.
Unilever’s ice cream division had sales of $8.6 billion last year, but its profit margins were less than half that of the company’s personal care division, according to Bloomberg News.
Ice cream profit margins are also limited by the fact that it is a seasonal product that requires significant capital investment due to cold chain logistics.
Unilever said the spin-off will begin immediately and is expected to be completed by the end of 2025.
The ice cream business is “in the process of moving to another headquarters in Amsterdam,” but Schumacher said on a call with reporters that he was “open to options” about where to list.
Unilever focuses on beauty and wellness, personal care, home care and nutrition businesses.
U.S. ice cream consumption is on the decline due to health concerns and environmental impacts of too much sugar, according to federal data.
According to the U.S. Department of Agriculture, in 1986, the average American ate 18 pounds of regular ice cream.
In 2021, the average has fallen to just 12 pounds per person.
