Unilever (NYSE:UL) has completed the acquisition of Ingman Ice Cream in Europe. The acquisition further strengthens Unilever’s competitive position in the ice cream market. The company already enjoys a portfolio of strong brands like Wall’s, Algida, Ben & Gerry’s, Magnum, Cornetto and Carte d’Or. In 2010, the Ingman Ice Cream brands generated annual sales of €70 million. The ice-cream segment contributes to more than 5% of the consumer goods giant Unilever’s stock value.
Strong Market Share Position Compared to Competitors
Unilever’s ice-cream sales are 16% of the global ice cream market, next only to Nestle’s 17%. The rest of the industry is highly fragmented with the third largest player having less than half of Unilever’s annual sales. We expect its market share to further increase to 17% over the next few years through organic growth and acquisitions. Unilever owns several large ice-cream brands that generate over $7 billion in annual sales including popular brands like Wall’s (U.K. and Asia), Algida (Italy), Langnese (Germany), Kibon (Brazil), and Ola (Netherlands), Ben and Jerry’s and Breyers (North America), Cornetto, Magnum, Carte d’Or and Solero.
It also leads the market for health conscious consumers with its products like Carte d’Or Light and Solero Exotic. Popular ice-cream brands such as Cornetto and Magnum have also been launched in snack sizes to facilitate consumption of smaller portions helping consumers control diet.
Unilever has also increased its presence in premium ice cream segment through acquisitions (like Ben& Jerry’s) and addition of super premium ice-cream products like Chunkey Monkey. This has led to higher overall value for Unilever’s ice cream portfolio as well as kept its lower cost competitors at bay.
We value Unilever with a $32 Trefis price estimate of its stock.