Ben & Jerry's Unilever

Now that Nelson Peltz is a Unilever Board member what will he choose as his favourite Ben & Jerry’s flavour?

Founded in 1978 in Vermont, Ben & Jerry’s ice cream was sold to FMCG giant Unilever in 2000.

Under Unilever’s stewardship the business has grown, and dig deep into the 2021 annual report, has sales over Euros 1 billion (US$1.13bn). 

Export has been a large growth contributor. The brand is sold in over 35 countries, powered by Unilever’s global footprint.

Photo: Cristi Ursea

Relatively speaking Ben & Jerry’s has performed much better than the rest of Unilever’s mainstream ice cream portfolio. Think Cornetto, Magnum and Viennetta.

Whilst Ben & Jerry’s founders, Ben Cowen and Jerry Greenfield, no longer have operational control of the business, they speak out on social issues, a stance which is as much of the company’s DNA as the wacky flavours it markets.

Last year Ben & Jerry’s announced, “we will end sales of our ice cream in the occupied Palestinian territory.” It was a decision that resulted in a lawsuit plus a rebuke from Israel’s PM.

Now, a new actor has entered Unilever’s playhouse, impromptu. Nelson Peltz, is an activist investor whose fund, Trian, holds a 1.5% stake. In the space of a few weeks, Trian has jumped to become Unilever’s 4th largest investor.

This week Peltz was offered a seat on Unilever’s board.

Compared to its peers, Unilever’s stock price has underperformed. As a stable business with a global reach, it’s held by many funds. However, its stock price woes have worried many large institutional investors.

Whilst Unilever’s management has taken note, questions linger.

Indeed, some slower growth and lower margin businesses like Tea have been sold off. However, earlier this year Unilever fumbled over GSK’s CHC business, Halceon. Unilever indicated it was willing to divest its ice cream portfolio to fund that acquisition, raising investors’ eyebrows.

There is very little in common between Peltz and Ben & Jerry’s founders, apart from the fact they’re all US citizens and aged over 70. It’s difficult to imagine a set of characters in the same boat, who’re more diametrically opposed; two hippies and a thorny, suited, capitalist.

Nelson Peltz is no new comer to consumer products. His fund has previously held stakes in Procter & Gamble, Heinz and Mondelez. 

Peltz’s white paper on Procter referred to the company’s “suffocating bureaucracy and excessive costs,” comments that did not go down well. Later, Procter undertook a wholesale restructuring which saw the giant shed thousands of roles plus a major rejig of its brand portfolio.

There are many in the consumer products industry who believe Unilever, like P&G, is bloated. 

According to news reports, when Peltz first met Unilever’s CEO, Alan Jope, Peltz opined that Ben & Jerry’s should not be making political statements about Palestine. 

Although Unilever publicly welcomed Peltz, ”Nelson’s experience in the global consumer goods industry will be of value to Unilever as we continue to drive the performance of our business,” his dramatic arrival is a distraction. For months Unilever denied they were even talking to Peltz.

It’s unclear what lies on Peltz’s agenda. Will it be Unilever’s food and refreshment business? Much of this is mainstream and exposed to the current commodity headwinds. 

Ben & Jerry’s by contrast is much more premium and resilient; Ben & Jerry’s is to Unilever what Nespresso is to rival Nestlé. 

Or will it be in the support functions? Looking through Unilever’s annual report I struggled to understand why they’d have 37 data centres. If I were Peltz that’s an example of where I’d be focusing first.

Photo: Hybrid Storytellers

Will Ben & Jerry launch a new flavour in Mr Peltz’s honour? Peltz Crumble, Half Baked Investor or Trian Phish Food perhaps?

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