Nestlé is moving to sell its remaining ice cream operations to streamline its global business model. The company announced it is in advanced talks to transfer these assets to Froneri, its long-standing joint venture. This major shift involves brands like Häagen-Dazs and Drumstick across markets in Canada, Asia, and Latin America. By offloading this division, the Swiss food giant aims to shed a profitable but “distracting” segment to focus on higher-growth core categories.
The move marks a significant step in a broader corporate restructuring under new CEO Philipp Navratil. The company wants to prioritize four main pillars: coffee, pet care, nutrition, and food and snacks. Industry experts see this as a way to simplify a sprawling portfolio that has faced recent challenges. While ice cream remains a popular category, its complex supply chain and seasonal demand often require specialized management that differs from shelf-stable goods.
A Strategic Pivot Toward Core Growth
The decision to exit ice cream aligns with a growing trend among consumer goods giants. Just last year, rival Unilever completed a high-profile spin-off of its ice cream unit to create the Magnum Ice Cream Company. Nestlé is following a similar path to unlock value for its shareholders. The company’s stock rose by nearly 3% following the announcement, showing that investors support this lean approach.
Nestlé has already spent a decade moving toward this exit. It created the Froneri joint venture with PAI Partners in 2016 to handle its European ice cream brands. In 2019, it sold its U.S. ice cream business to the same venture for $4 billion. This latest deal would effectively place the rest of its global ice cream footprint under Froneri’s control. Froneri is currently valued at approximately 15 billion euros and has strong backing from investors like the Abu Dhabi Investment Authority.
Navigating Restructuring and Market Pressure
The timing of this sale is critical for the company’s financial health. Nestlé is currently working through a massive cost-cutting program that includes reducing 16,000 jobs worldwide. These efforts are meant to fund investments in automation and artificial intelligence. The company reported strong fourth-quarter sales growth of 4%, but it still faces headwinds from a recent infant formula recall.
Management believes that the ice cream division lacks the global scale needed to compete within the internal Nestlé structure. CEO Philipp Navratil stated that Froneri is better equipped to drive growth in this specific category. By removing “distractions,” the executive team can focus on billionaire brands like Nespresso, Purina, and Maggi. This strategy is expected to help the company reach its organic growth target of 3% to 4% for the 2026 fiscal year.
Future Outlook for the Brand Portfolio
The ice cream exit is not the only change on the horizon. Nestlé has also concluded a review of its vitamin and supplement brands and is looking for potential buyers. Additionally, the group plans to separate its water and premium beverage business by 2027. These steps show a firm commitment to a “performance-driven” organization that rewards growth and eliminates underperforming units.For the B2B sector, this divestment signals a shift in how food conglomerates manage logistics. Ice cream requires “cold chain” infrastructure which is expensive to maintain alongside dry goods. By transferring these assets to a specialist like Froneri, Nestlé reduces its operational complexity. The company remains a 50% owner of the joint venture, so it will still benefit from the future success of the brands without the daily burden of managing them.
