SCD: The scoop on cold chain – why Unilever’s spinoff offers supply chain upside

SUPPLY CHAIN DIVE reports:

When Geoff Coltman, SVP at consultancy Catena Solutions, first learned about Unilever’s decision to spin off its ice cream business, the only thing that surprised him about it was that it didn’t also announce a buyer.

The CPG giant on March 19 announced it would move its ice cream business into its own standalone entity as part of a larger restructuring plan to simplify and focus its operations to drive productivity.

“They know that they need to separate from it in order to focus on their strength,” Coltman said of Unilever and its frozen portfolio.

Unliever has one of the biggest ice cream portfolios in the business, with popular brands including Ben & Jerry’s and Magnum. But the company’s leadership has emphasized shelf-stable operations, which spans from lotions to mayonnaise.

From manufacturing to transit and point of sale, Unilever’s ice cream business differs from the company’s other operating arms, the company told Supply Chain Dive in an email. Differences include end-to-end temperature control, equipment, storage facilities and modes of transportation. All those costs add up.

“If you get rid of the ice cream business, you’ve got this portfolio that, basically, you can use any warehouse, you can ship it from any truck, you can use the same processes,” said Patrick Penfield, a supply chain professor at Syracuse University. “It makes life a lot easier from a control standpoint.”

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