Unilever’s ice cream business is preparing for its multibillion-dollar spin-off next month, ready to face challenges ranging from logistics to the growing popularity of weight-loss drugs when it goes solo, its supply chain chief said.
The Magnum Ice Cream Company’s Dec. 8 listing in Amsterdam will test investors’ appetite for a high-sugar product at a time when GLP-1 weight-loss drugs have shaken consumer trends and U.S. President Donald Trump is pushing a “Make America Healthy Again” campaign.
It is positioning itself as an ice cream-focused business and banking on the appeal of “indulgent” snacks that consumers still crave, including its Magnum ice creams, as well as brands like Solero, Viennetta and Ben & Jerry’s.
“We are focused on ice cream and only ice cream,” Sandeep Desai, Magnum’s supply chain director, told Reuters before the company revealed a 50 million pound ($66 million) investment in its factory in Gloucester, western England.
“Everyone wakes up thinking, ‘How can I make more ice cream? How can I sell more ice cream?’ And that brings a very different level of focus.”
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Magnum takes on weight-loss drug challenge
Magnum acknowledges that GLP-1 drugs may impact its business, but is optimistic about long-term demand for its products.
“Although GLP-1 is not a factor we can ignore, ice cream is still always an indulgent snack,” Desai said.
However, Magnum is adding products more focused on hydration and protein, Desai said. Jamie Farrell, the company’s head of UK and Ireland, pointed to the lower sugar options and smaller portions that Magnum has already developed.
“We see it as a challenge,” Farrell said when asked about the increasing prevalence of weight-loss medications. “Can we create… more new products that move with the times?”
Magnum downplays impact of tariffs
The investment in the Gloucester plant, part of a €350-380 million ($403-$438 million) program to revamp the company’s supply chain as it separates from Unilever, will increase capacity in 2027 by 50% from 2023 levels. The factory currently produces 600 million ice creams a year.
Focusing exclusively on ice cream increases Magnum’s exposure to fluctuations in cocoa and sugar prices, but allows it to tailor commodity hedging and risk management strategies to the business, Desai said.
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Magnum has warned that new trade restrictions could disrupt its supply chain and increase its costs, but Desai said producing ice cream locally in the United States had largely shielded the company from the impact of US tariffs on imports.
“There was a slight impact… When people were talking about hundreds and hundreds of millions… our impact was more like tens of millions,” Desai said.
With information from Reuters.
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