Hindustan Unilever Ltd. (HUL) is planning the separation and possible sale of its ice-cream business, and this aligns with the recent decision by HUL’s parent company, Unilever, to spin off its ice-cream unit, focusing instead on segments sharing similar operating models and supply chains.
The ice-cream sector necessitates distinctive approaches to manufacturing and distribution, making it a prime candidate for independent operation. In India, HUL’s ice-cream segment contributes approximately ₹2,000 crore to its total sales, constituting roughly 3% of its revenue stream. Notably, HUL faces stiff competition in the market from established players such as Magnum, Amul, and Kwality.
Given the scalability of ice cream across both mass and premium segments, industry insiders suggest that if HUL receives an attractive valuation, it may consider divesting the business. Alternatively, internal discussions revolve around the potential for rapid scaling as a separate entity over the next 12–15 months before making a definitive decision.
Unilever, a global giant in the ice-cream industry with renowned brands like Ben & Jerry’s and Magnum, derives 16% of its revenue from this segment, indicating its significance in the company’s portfolio. However, executives opine that it’s improbable for an existing player in India to acquire HUL’s ice cream business, suggesting potential buyers could include multinational corporations or private equity firms.
A spokesperson for HUL stated, “We are in the process of deliberating the implications of this announcement for our ice-cream business in India. Further steps will be determined in consultation with the HUL board and Unilever management.”
HUL’s ice-cream venture operates within a distinct framework characterized by cold-chain logistics, seasonal demand patterns, and a unique innovation cycle. The company has bolstered its position in this sector through strategic acquisitions, including Kwality in 1994 and Adityaa Milk in 2018.
The Indian ice-cream market, estimated to surpass $5 billion in sales by FY25, according to retail consulting firm Wazir Advisors, presents significant growth opportunities. However, any decision regarding the future of HUL’s ice-cream business will hinge on various factors, including valuation and alignment with Unilever’s broader corporate strategy.