Hindustan Unilever (HUL) has disclosed that it is currently exploring various possibilities for the future course of its ice cream business in India. This revelation follows the recent strategic announcement by its parent company, Unilever, regarding the global separation of the ice cream vertical. Unilever’s decision, aimed at simplifying its operations and enhancing performance, is expected to entail a reduction of 7,500 jobs worldwide.
In response to inquiries about the potential ramifications of Unilever’s move on its Indian operations, HUL stated that it is actively assessing different options. A spokesperson for HUL emphasized, “As far as the Indian ice cream business is concerned, we are evaluating the various options in light of this announcement. We will discuss this with the HUL Board and Unilever management in the coming months. Once the approach is finalized, we will communicate further.”
Ice cream sales contributed approximately 3%, or Rs. 59,144 crore, to HUL’s revenue in the fiscal year 2023. The company highlighted its robust cost-saving initiative, Symphony, as a key driver of growth, providing the necessary resources to invest competitively in brands and future capabilities.
The ice cream business, characterized by a distinct business model including cold-chain distribution, seasonality, and unique innovation rhythms, occupies a significant position within HUL’s Food & Refreshment segment, representing 25% of its revenue.
HUL’s ice cream portfolio in India comprises three brands: Magnum, Kwality Walls, and Cornetto. In its latest annual report, Unilever lauded the stellar performance of its ice cream business, attributing its success to innovations and effective execution.
Despite the challenges posed by seasonality, HUL has been actively expanding consumption occasions through innovative campaigns and product launches, particularly around Indian festivals. Notably, initiatives like Kwality Wall’s mobile vending program, ‘I am Wall’s,’ have provided entrepreneurial opportunities to thousands of individuals across India, including differently-abled persons.
As HUL scrutinizes the ice cream market in India, it aims to leverage global initiatives by Unilever under the productivity program and integrate best practices into its Symphony initiative for sustained growth and efficiency.