Ben & Jerry’s could soon have a new owner after giving its corporate parent fits over its Israel activism.
Unilever’s new chief executive said he wants to spin off the company’s ice cream division with brands such as Ben & Jerry’s, Magnum and Popsicle mostly likely listed as a separate company, although an outright sale to another firm is also possible.
The move, which would also shed around 7,500 jobs, is part of a restructuring sought by Hein Schumacher, the CEO who took over last year from Alan Jope.
Ben & Jerry’s, which was founded by childhood friends Ben Cohen and Jerry Greenfield, was acquired by Unilever in 2000 for $326 million.
As part of the deal, Ben & Jerry’s board was allowed to remain autonomous in representing the brand’s position on hot-button political issues.
Earlier this year, Ben & Jerry’s board called for “peace and a permanent and immediate ceasefire” between Israel and Hamas, the Palestinian terrorist group which launched a cross-border assault on Oct. 7 that killed nearly 1,200 soldiers and civilians.
The call for a ceasefire by Ben & Jerry’s chairman Anuradha Mittal prompted Nelson Peltz, a Unilever board member, to resign his position at the Simon Wiesenthal Center, a Jewish organization that had been urging a boycott of the ice cream brand.
The vocal agitating by the brand’s board on behalf of the Palestinians has ruffled feathers both within Unilever and among the company’s stockholders.
In January, North Carolina pulled its retirement funds from Unilever in protest of Ben & Jerry’s stated desire to boycott Israeli settlements.
In 2021, the maker of popular flavors such as “Chunky Monkey” and “Cherry Garcia” clashed with Unilever after the brand said it would cease selling its products in Jewish settlements on the West Bank.
The move by the company, which maintains autonomy on issues such as branding and marketing, drew intense backlash.
In response, Unilever sold the Israeli chapter of Ben & Jerry’s to a local licensee, Avi Zinger, who has continued marketing the ice cream under the company’s brand name.
Ben & Jerry’s responded to the move by filing a lawsuit against Unilever.
That lawsuit was settled in 2022.
Investors cheered the plan, sending shares in Unilever, one of the world’s biggest consumer goods companies, up nearly 6% at one point.
Last year, Unilever’s ice cream unit recorded $8.6 billion in sales, but its profit margin is less than half of the company’s personal care unit, according to Bloomberg News.
Ice cream’s profit margins are also limited by the fact that it is a seasonal item that requires significant capital investment due to its cold-chain logistics.
The spinoff will begin immediately and is expected to complete by the end of 2025, Unilever said.
The ice cream business is “in the process of moving to a separate head office in Amsterdam” but Schumacher said on a call with journalists that he was “open to options” regarding where it could list.
Unilever will focus on its beauty and wellness, personal care, home care and nutrition businesses.
Ice cream consumption in the United States has been falling due to health concerns about excessive sugar consumption as well as its impact on the environment, according to federal data.
In 1986, the average American ate 18 pounds of regular ice cream, according to the US Department of Agriculture.
In 2021, the average fell to just 12 pounds per person.
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