The world’s biggest food company wants to throw out its cone. As part of a bigger turnaround, Nestlé said yesterday that it was in “advanced negotiations” to sell off its ice cream brands so it can focus on its strongest businesses: coffee, petcare, food, and snacks.
The freezer treats won’t go too far. Nestlé’s intended buyer is Froneri, a joint venture set up by Nestlé in 2016 to take in its ice cream companies. In 2019, Nestlé sold its US ice cream business—including Edy’s, Drumstick, and Häagen-Dazs—to Froneri for $4 billion.
What remains of the company’s ice cream workings is valued at $1.3 billion. The division is “strong, but small and a distraction,” said Nestlé’s new CEO, Philipp Navratil. He took the reins in September, tasked with resuscitating the company from underwhelming earnings and leadership turmoil. Since then:
- He announced plans to cut 16,000 jobs and tighten up Nestlé’s brand portfolio.
- Nestlé grappled with an infant-formula recall that it expects to slightly drag on sales growth this year.
Nestlé isn’t the only ice cream dumper. Unilever shed its frozen dairy biz in December, spinning off brands worth a combined ~$9.3 billion, including Ben & Jerry’s and Magnum. The new company reported dreary earnings this month, which it blamed, in part, on the demerger.—ML
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