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Nestle Sells It’s Leading Ice-Cream Business to Froneri

Nestle was one of the top leaders when it comes to sound quality ice-cream. The company has carved a niche for itself as a leading food maker and has many items in its kitty. However, currently, Nestle has made up its mind in selling off the ice-cream business in the USA to Froneri. Froneri is a joint venture, which got created in the year 2016 with PAI Partners, which is a private equity firm. Froneri will get three leading ice-cream brands, namely Dreyer’s, Haagen-Dazs, and Drumstick, and for that, they will pay Nestle $4 billion. Froneri, on the other hand, has combined its ice-cream business of Europe with R&R Ice-cream, which is owned by PAI. It is a win-win situation for both brands.

Mark Schneider, the Chief Executive of Nestle, has appreciated Froneri by saying that this step is an excellent success for Froneri. However, commoners and observers have sensed a different meaning to the whole process. According to them, this is a deliberate step by the Swiss company for hiving off the slower developing and growing business. Selling off businesses is not uncommon for Nestle as the company sold off its life-insurance business for an amount of $1.5billion. Also, earlier in the year, the company sold off its skin-health operations for a sum of $10 billion.

In the US ice-cream market too, Nestle faced quite a hard time. The US ice-cream market is the largest in the world, and many new companies are making their impact. One company in this regard is Halo Top, and it serves highly healthy alternatives for ice-creams. Unilever, too, is a global leader, and it has launched many probiotic ice cream brands, which have got a good response from the buyers. These brands have exotic names like Cinnamon, Turmeric Chai, and the Culture Republic. The domestic ice-cream share of Nestle has dropped from 19% to 15% in this decade. With Nestle and Froneri shaking hands together, their rivals in the global ice-cream market will face stiff competition.

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