This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- Nestlé is selling its remaining ice cream assets as the world’s largest food company undertakes a major review of its business in an aggressive drive to revive sales.
- CPG’s non-U.S. ice cream business will be sold to Proneri “in stages,” Nestlé CEO Philipp Navratil said during an earnings call Thursday. Froneri, a joint venture formed 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 hindrance to us” as the company chases bigger growth opportunities.
Dive Insights:
Nestlé’s new CEO has promised to be “ruthless” in his efforts to downsize the food giant and focus more on its biggest brands. In addition to ice cream, Nestlé is exiting its vitamins business and looking for a partner to offload its water portfolio, which includes Sanpellegrino and Perrier.
The company isn’t the only one pulling out ice cream. Unilever is spinning off its ice cream business, creating new innovation opportunities and freeing the CPG giant to focus on other areas.
Nestle regularly reviews its portfolio and completed 10 smaller transactions last year, including the sale of its Frankfurt food line, Herta Foods.
“Every time we divest one of these operating units, it’s a disruption to the company. We need the company to be fully focused and free of distractions to focus on what drives the most shareholder value,” Navartil said.
As Nestlé shrinks its portfolio, it is also reducing its level of support for brands with the greatest growth opportunities. The company plans to move from more than 400 brands receiving media support in early 2024 to 150 by 2026.
Nestlé sales growth declined by 2% in 2025 compared to a 1.8% decline in 2024. However, organic growth increased by 3.5% compared to 2.2% in 2024.
Navratil took over last fall and quickly implemented major changes. Just one month after taking office, he announced that the company would cut 6% of its workforce, resulting in $3.8 billion in cost savings.
As Nestlé looks to exit certain businesses, it remains committed to maintaining frozen foods, although it is not currently a “growth category,” Navratil said. However, the frozen foods segment, including frozen pizza, continues to strengthen Nestlé’s overall presence in the United States.
“We are transforming and strengthening our business to make it more valuable, no matter what the future holds,” Navratil said.
