Nestlé, the world’s largest publicly held food and beverage company, has announced it is in advanced negotiations to sell its remaining ice cream business to Froneri; the dedicated ice cream joint venture that Nestlé itself co-founded with private equity firm PAI Partners back in 2016.
In 2019, Nestlé sold its US ice cream business, home to Häagen-Dazs and Dreyer’s, to Froneri for $4 billion. Nestlé is not alone. In late 2025, Unilever spun off its own ice cream empire encompassing Ben & Jerry’s, Magnum, Cornetto, Wall’s, into a standalone entity, The Magnum Ice Cream Company.
Two of the world’s largest consumer goods companies have reshaped their involvement in the ice cream category within months of each other - not by coincidence, but as part of a deliberate strategic reset.
Why are the giants walking away?
The answer, in short, is a stricter focus. Nestlé’s new CEO, Philipp Navratil, who replaced Laurent Freixe in September 2025 following Freixe’s abrupt departure, has been blunt about his intentions. He has described the company’s remaining ice cream brands as "strong but small" and, more pointedly, a "distraction“.
Under Navratil, Nestlé is reorganising around four core sectors: coffee, pet care, nutrition, and food and snacks. Everything else is on the table for review.
The company has also concluded a strategic review of its underperforming vitamin and supplement brands and is engaging potential buyers. Its water business, which houses Perrier and San Pellegrino, is expected to be deconsolidated from 2027. And roughly 16,000 jobs, about 7% of the global workforce, are being cut by the end of 2027 as part of a “Fuel for Growth” programme.
Unilever’s rationale was remarkably similar. CEO Fernando Fernandez called ice cream "an outlier" in the portfolio and told investors that Unilever needed "to leave that business behind“. The company wanted to concentrate its Foods division on condiments, cooking aids and other packaged products with more consistent demand profiles.
These are not companies fleeing a failing category. They are businesses recognising that, however profitable, this sector does not fit the streamlined, high-growth model they now want to pursue. Ice cream comes with operational headaches that sit uneasily with high seasonality, a distinct frozen supply chain, and capital-intensive branding and marketing demands.
For an FMCG giant trying to simplify, those factors are a drag. As Navratil put it himself: "We held on to those six businesses because we thought we could drive growth. Looking at it now, they don’t have any global scale and we cannot drive this the same way as Froneri can."
What this means for the ice cream sector
It would be a mistake to read these exits as a verdict on the health of the ice cream industry, nor would it be appropriate to over-analyse Navratil’s low global scale comment. The global ice cream market was valued at approximately $43.9 billion in 2025 and is projected to grow to $46.29 billion in 2026, reflecting a compound annual growth rate of around 5.5%.
Longer-term forecasts are equally positive, with the market expected to reach roughly $59 billion by 2030. Asia-Pacific has emerged as the largest and fastest-growing regional market, led by surging demand in China and India. Even Nestlé’s own CEO has acknowledged that the ice cream category delivers “mid-single digit growth consistently” and is not being significantly impacted by the GLP-1 drug (such as Mounjaro) trend that has shaken other parts of the snacking world.
Of course, the sector is not without its challenges. Seasonality remains a perennial issue, and consumer tastes are shifting. There is growing demand for premium and artisanal products, plant-based and dairy-free options, clean-label ingredients, and innovative flavour profiles. Health-conscious consumers are increasingly looking for lower-sugar, higher-protein, and gut-friendly alternatives. The wider regulatory environment is tightening too, with advertising restrictions on foods high in fat gaining ground and nutritional labelling systems such as the EU’s Nutri-Score becoming more prominent.
But these are not existential threats, they are innovation opportunities. The ice cream companies that adapt, diversifying their product ranges and getting ahead of the wellness curve, will prosper. The sector’s inherent appeal as an affordable indulgence remains powerful, and formats like mini bites, sticks and portion-controlled treats show that even weight-conscious consumers still want to enjoy a scoop.
The argument for dedicated ice cream businesses is that they are simply better placed to respond to these dynamics. A company like Froneri, whose FY24 profits rose eightfold and whose revenue grew 5.5% with volumes up 3%, can pivot faster and invest better in a way that a diversified giant simply cannot.
What this means for the FMCG giants
This story is ultimately less about ice cream and more about the future shape of the FMCG sector. The era of the fully vertically integrated conglomerate - running every category in-house from frozen desserts to bottled water to baby food - appears to be evolving. What we are witnessing is a shift in mentality where FMCG giants are acknowledging that being the biggest is no longer the same as being the best owner of every business in their portfolio.
The pattern is not unique to Nestlé and Unilever. Belgian dairy co-operative Milcobel sold YSCO, one of Europe’s largest private-label ice cream manufacturers, to investment firms in a bid to refocus on cheese and milk powder. Across the sector, we are seeing a similar these as companies divest what no longer fits. Nestlé’s Fuel for Growth programme, slashing its brand portfolio from over 400 media-supported brands in early 2024 to 150 by 2026, encapsulates this mindset.
This is not, however, a story of panic or retreat. Nestlé’s shares rose over 4% on the day of the announcement. Investors are rewarding discipline, not punishing disposal. The company is not abandoning ice cream entirely, it retains a 50% stake in Froneri, which paid it a dividend of around CHF 2 billion in each of the last two financial years. It is choosing to participate as a shareholder rather than an operator.
For businesses watching from the sidelines, the implications are significant. As FMCG giants continue to review and divest non-core divisions, opportunities will emerge for private equity, specialist operators and for ambitious mid-market players looking to scale. Nestlé has already signalled that its vitamins and supplements business is next, and water will follow.
The question is no longer whether more spin-outs are coming, but which sectors and which brands are next in line. For dedicated sector businesses, this is a moment of real opportunity as some conglomerates reassess direct operational ownership, and specialists are increasingly taking the lead in manufacturing and category execution.
About the author
Iwan Thomas is an associate at law firm Charles Russell Speechlys. He advises on corporate transactions and advisory matters, with a particular interest in the food and beverage and sport sectors.
