Nestle has reached an agreement to sell the United States ice cream operations to Froneri. Froneri is an ice cream-focused joint venture created by the Swiss company in 2016 by joining hands with French private equity firm PAI Partners. It came into existence after Nestle decided to merge its European ice cream business with R&R, a unit of PAI Partners. Froneri is operational in regions including Asia and Latin America. With a turnover of around USD 2.19, it is one of the largest ice cream companies in the world. The deal is worth USD 4 billion and includes Häagen-Dazs, Drumstick cones, and Edy’s. While Nestle owns the rights to sell Häagen-Dazs in the US, Yoplait maker General Mills does it non-US markets. With this deal, Froneri will expand its reach to the United States and is hopeful of adding another USD 1.8 billion to annual sales.
Mark Schneider, Chief Executive Officer of Nestle, said they are confident that Froneri would extend its successful business model to the US market. Ever since taking over as CEO of Nestle in 2016, Schneider has embarked on a strategy of offloading underperforming businesses. The company is focusing more on selling premium products in high growth categories like coffee and baby food. Nestle has agreed for the deal almost 5 years after the food giant sold off its Mexican ice cream operations to Grupo Herdez. The deal signed in 2014 was worth about USD 68.7 million. Earlier in July, Nestle sold its Israeli ice cream business to the joint venture for an undisclosed amount.
Schneider said that the creation of Froneri has been a huge success in the ice cream business and the step will move closer to our goal of achieving global leadership. Ice cream is still popular in the United States and data by the International Dairy Foods Association shows that it remains the most popular form of frozen desserts. According to the IDFA, the ice cream industry in the US is worth USD 11 billion and generates 26,000 direct jobs and creates USD 1.6 billion in direct wages.