Summary of Unilever TMICC ice cream spin-off
- TMICC initially underperforms due to seasonal demand and operational disruptions
- Unilever benefits from streamlined focus and stronger margins across core categories
- Ice cream’s complex cold chain limits efficiency and increases structural vulnerability
- TMICC gains autonomy enabling faster innovation and more targeted investment
- Both companies hold potential advantages though long term success remains uncertain
As of 8 December 2025, Unilever’s ice cream has no longer been part of the company. Instead, world-famous brands like Magnum, Wall’s and Ben & Jerry’s now make up The Magnum Ice Cream Company (TMICC). Seemingly overnight, the world’s biggest ice cream company was born.
The demerger was not a decision taken lightly by Unilever. The UK multinational spun off ice cream due to its different operating model, and a desire to pare down and streamline its portfolio.
In the short-term, Unilever has seen strong performance for its remaining food brands, while TMICC has underperformed. But what’s the long-term story? Who will be the winner of the demerger?
Why TMICC underperformed
At the beginning of its life as an independent company, TMICC is already struggling.
Its Q4 results saw a 0.7% decline in organic sales growth and a 3% decline in organic volume growth year-over-year, missing analyst expectations. The result even saw a dip in the newborn ice cream giant’s share price.
These declines are in stark contrast to Unilever’s 0.8% volume growth in foods, which saw an underlying operating margin of 22.6%.
However, this result is misleading as an indicator of the company’s long-term prospects, suggests Svetlana Menshchikova, associate equity analyst at financial services company Morningstar. The Q4 period is the “least meaningful” for ice cream, as it covers winter in the northern hemisphere, where the category has significantly lower demand than in the summer months.
Furthermore, the company chose this quarter to run maintenance and upgrades on a large part of its freezer fleet –predominantly in Asia.
The government shutdown in the US and Brazil’s later summer season further affected performance, she suggests.
“We don’t think TMICC’s brands are struggling as market share figures have been encouraging since the separation decision“.
So, short-term underperformance may not be a reflection of TMICC’s broader business. But what about the long-term?
The case for spinning off ice cream
While TMICC’s results do not necessarily reflect poorly on the ice cream giant, the separation may still be good for its former owner.
Spinning off ice cream was not an easy decision for Unilever, explains Clive Black, director of investment banking group Shore Capital. Yet in the end, it made sense for the multinational.
“Unilever battled, internally, with what to do with ice cream for many years. It was a bit of a running sore of a narrative and so from several perspectives it made sense to demerge: focus, distraction, capital allocation, and ultimately performance potential.”
Ice cream has a vastly different supply and distribution model compared with the rest of Unilever’s portfolio, points out Morningstar’s Menshchikova, tying it to a complex end-to-end cold chain. Furthermore, ice cream is both seasonal and has lower margins than many of Unilever’s other businesses.
The separation will allow it to move more decisively towards the areas which it is focused on – beauty, wellbeing and personal care.
Ice cream had created “unwanted cyclicality for Unilever”, due to the fact that the category being weather dependent concentrates a lot of revenue in the summer months.
Meanwhile, Unilever’s remaining food businesses are “simpler to operate, less capital intensive, and supportive of solid margins and cash generation”.
The future for TMICC
On the other side, things may be looking bright for TMICC. It may even be better off outside Unilever, suggests Menshchikova. “For TMICC, the separation creates a more focused operating model, with dedicated management and a sales force fully aligned to ice cream.
“It should also enable targeted investment without competing for capital inside a conglomerate that clearly prioritised other segments as growth engines.”
Standing alone, she suggests, TMICC can move faster and modernise, without being held back by a larger parent company.
One challenge remains: margins. Operating margins have so far lagged TMICC’s largest competitor, the part-Nestlé-owned Froneri. Menshchikova predicts that the company may catch up once “separation-related noise” dies down.
As for what the future holds for TMICC, only time will tell, stresses Shore Capital’s Black. The ice cream major did not respond for comment, but it’s well known the market remains a tough one.
“The mass market ice cream market is not a walk in the park, it is highly competitive, is clearly weather impacted, whilst major national and international brands have a collective of artisanal product clipping at its heels.”
Black suggests that Unilever shareholders will be “the happier of the two camps”, compared to TMICC, at least at first.
So who is the winner? TMICC is operating in a challenging, season-dependent market, with a costly supply chain. Unilever, meanwhile, is pivoting towards an area, wellness and beauty, with higher margins and less volatile raw material costs.
Nevertheless, the split has the potential to be beneficial for both companies: easing restrictions on TMICC’s operations and allowing Unilever to focus more squarely on a narrower group of companies.
