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Accenture helped Unilever achieve high performance by successfully divesting its European frozen foods business.
With some 400 brands spanning 14 categories of home, personal care and foods products, Unilever is one of the world’s largest manufacturers of consumer goods. The company employs 163,000 employees in approximately 100 countries. In 2009, Unilever reported worldwide sales of nearly €40 billion (US$53.3 billion).
Unilever realized it needed to reduce its brand portfolio and with Accenture’s assistance managed to minimize transition costs, meet aggressive timelines and satisfy relevant contractual requirements.
Amid industry consolidation, rising material costs and growing competitive pressure, Unilever launched an ambitious five-year program to improve performance by simplifying its global organization and standardizing business processes across the enterprise. As part of this strategy, Unilever set out to reduce its portfolio of brands from 1,600 to 400. After analyzing options, the consumer goods manufacturer concluded its best course of action was to divest its two main European frozen food brands—Bird’s Eye and Iglo—and retain its ice cream business.
The program involved two phases of work. The first phase—named the Liberator project—focused on establishing the new, independent organization within the existing Unilever enterprise. Phase two of the divestiture program—known as the Exodus project—consisted of the physical separation and handover of frozen foods data and processes to the acquiring company.
During the Liberator project, time was of the essence. Unilever wanted to complete the legal separation and have the business “go live” with its own profit and loss within just six months in eight countries (Austria, Belgium, France, Germany, Ireland, Netherlands, Portugal and the United Kingdom).
After the legal separation of the frozen foods business was complete, Unilever sold the business to Permira, a leading Europe-based private equity firm, that named the company BEIG (Bird’s Eye Iglo Group). Accenture’s deep SAP-based solution experience was a key factor in the ability to move quickly and meet the short turnaround time Unilever required.
With its two-phased approach to divestiture, Unilever was able to separate the business and facilitate its sale to Permira. Accenture’s involvement in the Liberator and Exodus projects allowed Unilever to effectively control the complexity of the divestiture, minimize transition costs, meet aggressive timelines and satisfy all contractual requirements related to the sale of its frozen food business.
In fact, the success of the program was so impressive that Unilever awarded Liberator the Unilever Europe IT award in 2006. According to Unilever’s Europe IT director: “This really has been a major achievement, made with the minimum of fuss and is a great advertisement of what Unilever and Accenture can deliver working together.”
Divesting the Bird’s Eye and Iglo businesses not only supported Unilever’s five-year strategy to reduce its brand portfolio from 1,600 to 400, but also strengthened Unilever’s ability to manage similar projects in the future. Importantly, profits from the sale have been reinvested to support core business priorities that will continue to position Unilever for high performance.
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