Healthier Ice Cream: A Unilever Scoop?

By Jeremy Caplan

How does Unilever, the world's leading ice cream manufacturer, intend to take an even bigger bite out of the $32.4 billion global market? By making some of its 2,000 ice cream brands--ranging from Ben & Jerry's to Magnum--a little healthier. This summer the company is launching lower-fat versions of its richest flavors, hoping slimmed-down ice cream will excite consumers increasingly concerned about their waistlines.

Unilever, with about a 17% share of the global ice cream market, is facing increasing competition from Nestle, whose share has risen from 10% to 11% since 2002. Nestle's Dreyers brand, acquired the next year, beat Unilever to the market with a light version made using a "slow churned" technique; Dreyers' U.S. sales of light ice cream have doubled since the switchover to the new process early in 2004. "We can't make it fast enough," says Nestle spokesman Robin Tickle. Unilever is playing up its own "double churned" technology, which, like Nestle's, blends ingredients slowly at low temperatures. "Unilever is scrambling," says Dreyers CEO T. Gary Rogers of his rival's recent efforts to develop tasty low-fat products.

Accounting for 10% of Unilever's global sales, ice cream plays a part in the company's strategy to improve on its performance in 2004, a rough year in which European ice cream sales fell nearly 10% and Unilever's overall pretax profits fell 36%. Unilever has since streamlined its corporate structure, jettisoning its dual-chairman arrangement for a single chairman and chief executive. Since Patrick Cescau took charge in February, he has focused on reviving sales growth with new products. One innovative Unilever idea: "Superfruit" flavors featuring fruits high in vitamins and minerals, like the acerola, which looks like a cherry and tastes like an apple--but with much more vitamin C. "It's not about health-driven products," says Unilever spokesman Trevor Gorin. "It's about helping people feel good." --By Jeremy Caplan