Senior City advisers expect Unilever to sell off its Ben & Jerry’s brand

Senior City advisers expect Unilever to sell off its Ben & Jerry’s brand in a dramatic shake-up of the consumer goods giant. The sale is likely to be made alongside the rest of the ice-cream division, which includes Magnum and Carte D’Or. 

Sources said this would slim down the group, letting it focus on faster-growing health and beauty brands. 

There has been a flurry of speculation that parts of Unilever, whose brands also include Dove and Marmite, will be sold since one of the world’s most powerful activist investors, Nelson Peltz, was appointed to the board last month. 

The billionaire founder and head of Trian Fund Management has built a 1.5 per cent stake in Unilever and is known for pressuring boards to agree to major change and business break-ups. The American’s £6 billion investment firm has mounted activist campaigns at Unilever’s rivals Procter & Gamble, Heinz and Mondelez. He joined the board of each company. 

The ice-cream unit generates €7billion (£6billion) in annual sales. Profit margins in the sector are about 10 per cent, one source said, which could value the business at €9billion. In a trading update for the first quarter of this year, Unilever said sales at its ice-cream brands were boosted by the easing of Covid restrictions in Europe and strong sales in China. 

Underlying sales in its foods and refreshment division grew 9.1 per cent to €5.1billion in the quarter. Private equity firms could acquire the ice-cream unit, add smaller brands, and cut costs, a banker said. When Nestlé merged its European ice-cream brands with Britain’s R&R Ice Cream in a joint venture with a French private equity firm in 2016, the deal was hailed a success. 

Unilever has been exploring options for the ice-cream unit for a while, one of the sources said, adding that management – impressed by Nestle’s deal – could follow a similar strategy.

Last week, Kellogg’s said it would split into three firms: its core global snacking business, a North American cereal firm and a plant-based food company. 

Unilever is unlikely to begin any sale until next year as inflation limits consumer spending, bankers said. 

One said concerns about the impact of rising ingredient and labour costs could also affect the timing of any sell-off.

It is understood that advisers have not yet been appointed. Unilever declined to comment. 

When questioned on future disposals in February, boss Alan Jope said Unilever would look to sell underperforming brands and other smaller parts of the company. He described ice-cream as a very substantial ‘big business’ and one that brings ‘tremendous scale.’

The group has raised £9.5billion by selling off brands since 2017, including the £6billion disposal of its Flora spreads to private equity firm KKR. Unilever may also sell its Hellmann’s mayonnaise and Knorr stock cubes brands, two sources said, but only after the ice-cream sale.