The ice cream industry is facing challenges, leading food companies to seek new ways to operate their businesses profitably. Nestlé and Unilever are among the major consumer goods manufacturers that have reorganized their ice cream businesses to adapt to these changes. Reto Lüchinger, president of Glacesuisse, noted a significant decline in June ice cream sales compared to the previous year.
The association of Swiss ice cream manufacturers highlighted that June, July, and August are critical months for ice cream manufacturers, with more than half of the annual volume sold during this period. Despite the growth in ice cream sales by around 13 percent up to mid-May, companies like Unilever and Nestlé face challenges such as weather dependency, expensive logistics, and increasing consumption of own-brand ice cream.
In response to these challenges, Unilever announced the spin-off of its ice cream division while Nestlé has already restructured its ice cream business under Froneri. Froneri is a joint venture between Nestlé and private equity firm PAI that focuses on producing both branded and private-label ice cream products. The company aims to offer retailers and restaurants a wide selection of well-known brands to increase market share. Froneri has been successful in increasing margins and operational profitability since its spin-off from Nestlé despite high financing costs.
However, the future of Froneri remains uncertain with potential scenarios including a sale to financial investors or an IPO. While some companies like Ferrero are investing in the area, health concerns, competition from private labels, complex logistics continue to challenge the ice cream industry. Factors such as weight loss treatments rise in popularity and investor preferences for healthier food products also impact sales.
Despite these challenges, companies like Nestlé and Ferrero are adapting their strategies to remain competitive in the evolving ice cream market. It remains clear that companies must continue innovating if they want to keep up with changing consumer preferences and stay ahead of competitors in this fast-paced industry.
