Hindustan Unilever (HUL), the country’s largest consumer goods company, on Friday said that it was constituting a committee of independent directors to evaluate the way forward for its ice cream business. This comes six months after parent Unilever announced in March that it was spinning off its $8.6-billion ice cream unit by the end of 2025.
“After due consideration, the board has decided to constitute a committee of independent directors of the company to evaluate in detail the prospects of the company’s ice cream business and to make recommendations to the board on the best way forward. The final decision will be made by the audit committee and the board, based on the independent committee’s advice, factoring in the interest of all stakeholders,” HUL said.
Analysts say that the company may consider hiving off the ice cream business, much like its parent Unilever, given that the unit in India contributes just around 3% to topline. In FY24, HUL’s overall turnover was
Analysts say that the company may consider hiving off the ice cream business, much like its parent Unilever, given that the unit in India contributes just around 3% to topline. In FY24, HUL’s overall turnover was 59,575 crore. Ice cream is part of HUL’s food and refreshment segment, which contributed nearly 26% to FY24 topline at Rs 15,292 crore.
In March, Unilever had said that the ice cream business was inherently different from other packaged food categories, including a cold-chain, go-to-market operating model, seasonality and innovation rhythm, which demand attention of its own. The strategic intent to separate the ice cream business from the rest of Unilever’s business was intended to transform the company into a simpler, more focused and higher-performing company.
The ice cream business in India includes brands such as Kwality Wall’s, Cornetto and Magnum. Wall’s and Magnum are among the top-ten selling ice cream brands in the world along with Ben & Jerry’s, which is also a Unilever ice cream brand.
In India, HUL’s competitors include Amul and Mother Dairy apart from a host of other regional, national and international brands such as Havmor, Vadilal, Baskin Robbins, Haagen-Dazs, Naturals, Arun and Creambell, among others. The overall ice cream market is valued at `16,000 crore in India; of which, the organised segment is around 70% of the market thanks to the many co-operatives and dairy players operating in the country, experts said.
“We are evaluating the various options in light of the global announcement by Unilever,” HUL had said in March in response to queries from FE.