Outlook Business Desk
Hindustan Unilever Limited (HUL) has granted in-principle approval for the demerger of its ice cream business into an independent listed entity. Kwality Wall's, Cornetto and Magnum are some of the popular ice cream brands owned by HUL.
The ice cream business is a high-growth sector that requires substantial investments to fully realize its potential. However, it operates with a unique model, including cold chain infrastructure and a distinct channel landscape, which limits synergies with other segments within HUL.
To continue thriving after Unilever PLC's decision to separate its ice cream business, HUL's ice cream division will need to develop local capabilities. The demerger will allow HUL to better concentrate on its core operations, while also strengthening its position in trending and high-growth segments.
The share exchange ratio for the demerger has not yet been disclosed. The primary goal of the demerger is to maximize value for shareholders.
Key players and competitors in the Indian ice cream market include Gujarat Co-operative Milk Marketing Federation Ltd (AMUL), Kamaths Ourtimes Ice Creams Pvt. Ltd (Naturals Ice Cream), LOTTE Wellfood Co. Ltd (Havmor), Mother Dairy Fruit & Vegetable Pvt. Ltd, Baskin Robbins India, Vadilal Industries (Vadilal Ice Cream), and Hatsun Agro Product (Arun Ice Cream).
The ice cream sector is expected to exceed $5 billion by FY25. Key factors driving this growth include increasing disposable incomes, the emergence of innovative new-age brands, premiumisation trends, and the rapid expansion of quick commerce (Q-commerce).
In FY23, HUL's ice cream business accounted for about 3% of the company's total revenue, which was ₹59,144 crore. The ice cream segment is part of HUL's Food & Refreshment category, which contributes 25% to the company's overall revenue.