Dive Brief:
- Nestlé is offloading the remainder of its ice cream assets as the world’s largest food company takes a larger review of its businesses in an aggressive push to turn around sales.
- The CPG’s ice cream business outside the U.S. will be sold to Froneri “in a phased way,” Nestlé CEO Philipp Navratil said during an earnings call Thursday. Froneri, a joint venture created by the Swiss company and PAI Partners, acquired Nestlé’s U.S. ice cream business for $4 billion in 2019.
- Navratil said its remaining ice cream holdings are “strong but small,” adding that the segment is “a distraction for us” as the company chases larger growth opportunities.
Dive Insight:
Nestlé’s new CEO promised to be “ruthless” in his efforts to slim down the food giant and become more focused on its biggest brands. In addition to ice cream, Nestlé is also looking to exit the vitamin business and find a partner to offload its water portfolio, which includes Sanpellegrino and Perrier.
The company isn’t the only one exiting ice cream. Unilever spun out its ice cream business to unlock new innovation opportunities and allow the CPG giant to focus on other areas.
Nestlé regularly reviews its portfolio, and it completed 10 smaller transactions last year, including the disposal of frankfurter line Herta Foods.
“Every time we dispose of those operating units, it’s a distraction for the company, and we really need the company fully focused and undistracted from…what drives most shareholder value,” Navartil said.
As Nestlé slashes its portfolio, it’s also cutting the level of support for brands with opportunities for the most growth. The company is moving from more than 400 brands with media support in early 2024 to 150 in 2026.
Nestlé sales growth declined 2% in 2025, compared to a 1.8% drop in 2024. Organic growth, however, was up 3.5% compared to 2.2% in 2024.
Navratil took over last fall and has been quick to implement major changes. Just a month into his tenure, he announced the company would slash 6% of its workforce to drive $3.8 billion in savings.
As Nestlé looks to exit certain businesses, it’s still committed to retaining frozen foods even though it is not a current “growth category,” Navratil said. However, the frozen foods segment — which includes frozen pizza — continues to strengthen Nestlé’s overall position in the U.S.
“We are innovating and strengthening our business, making it more valuable whatever the future may hold,” Navratil said.
