Nestlé deal makes Froneri ‘global ice cream powerhouse’

By Rod Addy

- Last updated on GMT

Some of the US brands included in the Nestle / Froneri deal
Some of the US brands included in the Nestle / Froneri deal

Related tags frozen Finance

Nestlé's sale of its US ice cream business to UK-based Froneri, formerly R&R Ice Cream, for $4bn (£3bn) has boosted the latter’s global clout, giving it a presence on every continent.

A spokesman for Froneri told Food Manufacture​: “It means Froneri will now be present on every continent – it is a truly global business with operations in Europe, Asia, Africa and South America. The US market has not been consolidated, so presents opportunity and growth prospects. There will also be the opportunity for knowledge-sharing around new product development.

​This deal makes us the second-largest ice cream company in the world, present in over 20 countries and with more than 10,000 employees.”

​Integrating Nestlé’s US ice cream business with Froneri gives the joint venture an immediate leadership position in the largest ice cream market in the world and creates a global ice cream powerhouse.

In 2016, Nestlé and PAI Partners merged Nestlé’s European ice cream business in 20 countries and PAI-owned R&R to create Froneri, one of the world’s largest ice cream companies.

Well-known brands

With a portfolio of well-known brands, Froneri has been able to achieve rapid sales and profit growth, steadily gaining market share and reaching a turnover of CHF 2.9bn (£2.2bn) in 2018. 

Froneri, which already had operations in Europe, Latin America, Africa and Asia-Pacific will now have a strong presence in the US, the largest ice cream market in the world. Its recent acquisitions of TipTop in New Zealand and Nestlé’s ice cream business in Israel have also increased its growing global footprint. 

Nestlé USA’s successful ice cream business comes with a high-calibre management team, marketing, manufacturing and sales/distribution capabilities. In 2018, turnover was $1.8bn. With brands like Häagen-Dazs, Drumstick and Outshine, the business commands leadership in key ice cream categories, notably super premium.

Business model ‘can be extended to US’

​The creation of Froneri has been a phenomenal success,”​ said Mark Schneider, Nestlé chief executive officer (CEO). We are now making this business our global strategic partner in ice cream and are convinced that Froneri’s successful business model can be extended to the US market. With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream.” 

Froneri CEO Ibrahim Najafi said: ​The acquisition is testament to the strength and longevity of our relationship with Nestlé. This partnership and the continued support of PAI Partners will be essential to ensuring we continue to delight consumers with innovative, high-quality products in all markets.” 

Frédéric Stévenin, partner at PAI Partners, said: ​We are excited to bring Nestlé’s stellar US ice cream business to Froneri. This is a great opportunity for further growth, building on the expertise of the world’s leading pure-play ice cream company.”​ 

This latest deal with Froneri is expected to close in the first quarter of 2020, following the completion of customary regulatory approvals. Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia as part of its current market structure. 

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