By Alexander Marrow
GLOUCESTER, England (Reuters) -Unilever's ice cream business is gearing up for its multi-billion-dollar spin-off next month, ready to tackle challenges from logistics to the rising popularity of weight loss drugs when it goes solo, its supply chain head said.
The Magnum Ice Cream Company's December 8 listing in Amsterdam will test investor appetite for a sugar-heavy product at a time when GLP-1 weight loss drugs have shaken up 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 betting on the allure of "indulgent" snacks 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 ice cream only," Sandeep Desai, Magnum's chief supply chain officer, told Reuters ahead of the company unveiling of a 50 million pound ($66 million) investment at its factory in Gloucester, West England.
"Everyone wakes up thinking, how can I make more ice cream? How can I sell more ice cream? And that gives a very different level of focus."
MAGNUM TACKLING WEIGHT-LOSS DRUG CHALLENGE
Magnum acknowledges that GLP-1 drugs may affect its business, but is optimistic about long-term demand for its products.
"Whilst GLP-1 is not a factor we can ignore, (ice cream) is still always an indulgent snack," Desai said.
Magnum is, however, adding products more focused on hydration and protein, Desai said. Jamie Farrell, the company's head of UK & Ireland, pointed to lower-sugar options and smaller portions Magnum has already developed.
"We see it as a challenge," Farrell said when asked about the growing prevalence of weight-loss drugs. "Can we create... more new products that move with the times?"
MAGNUM SHRUGS OFF TARIFF IMPACT
The Gloucester plant investment, part of a 350-380 million euro ($403-438 million) programme to revamp the company's supply chain as it splits from Unilever - will increase capacity in 2027 by 50% from 2023 levels. The factory currently produces 600 million ice creams a year.
The ice cream-only focus increases Magnum's exposure to cacao bean and sugar price fluctuations but allows it to tailor commodities hedging and risk management strategies to the business, Desai said.
Magnum has flagged that new trade restrictions could disrupt its supply chain and raise its costs, but Desai said producing ice creams locally in the United States had largely shielded the company from the impact of U.S. tariffs on imports.
"There was a slight impact... When people were talking hundreds and hundreds of millions... our impact was more in the tens of millions," Desai said.
($1 = 0.8678 euros)
($1 = 0.7630 pounds)
(Reporting by Alexander Marrow; Editing by Emelia Sithole-Matarise)
