Unilever’s Ice Cream Sales Struggle in Heat Wave: Unilever, manufacturer of Magnum, Cornetto, and Ben & Jerry’s ice cream, is confronting an unexpected problem amid the European heat wave. The company’s CFO, Graeme Pitkethly, warned that excessive heat might hurt ice cream sales.
Pitkethly told media that ice cream eating had a “sweet spot” in weather. Initially, warmer weather increased out-of-home sales to restaurants and catering enterprises, but the heat wave has changed customer preferences to cold drinks.
Europe’s current heat wave has generated record-breaking temperatures in Spain and Italy and disastrous wildfires in Greece. Residents and visitors are advised to keep inside and hydrated during the harsh temperatures.
Unilever, which makes Carte d’Or and Breyers ice cream, reported low in-home sales in the first half of the year. Due to inflation, consumers have cut down on non-essential purchasing, including ice cream. Euromonitor reports that Unilever sells 20% of the world’s ice cream.
Price hikes drove Unilever’s 5.7% value gain in ice cream sales in the first half of the year compared to 2022. Despite a modest dip in ice cream sales, the firm increased revenues by 9.1% in the first half.
Unilever’s policy of increasing prices across its product line has helped raise sales under inflationary pressures. However, the business expects pricing rises to “moderate” as input cost inflation decreases.
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Unilever CEO Hein Schumacher, who took over from Royal FrieslandCampina in July, noted agricultural commodities market risks. Food costs may rise owing to the Ukraine war’s influence on wheat prices and drought in southern Europe, which might harm the company’s performance.
Despite these worries, Unilever remains optimistic. The company’s shares rose 5% after it raised its sales growth projection to above 5%. Hein Schumacher also said Unilever might capitalize on attractive market prospects. He’ll reveal his business strategy in October’s third-quarter earnings release.
Industry analysts will keenly watch Unilever’s reaction and adaptation to the heat wave and inflationary pressures. The company’s ability to strike the appropriate balance and alter its strategy will be key to sustaining its dominance in the intensely competitive ice cream business.