Nestle in joint venture with UK ice cream firm

The agreement announced on Wednesday caps months of talks between Nestle and R&R’s owner, PAI Partners. The venture follows a portfolio review aimed at improving Nestle’s performance, which has been weakened by slowing emerging markets, a change in consumer tastes toward fresher foods, and heightened competition.

The 50/50 joint venture, to be called Froneri, will combine the Nestle and R&R ice cream businesses in Europe, the Middle East, Argentina, Australia, Brazil, the Philippines and South Africa. 

Even though Nestle has a stated goal of becoming a more health-focussed company, it will keep its stronger ice cream businesses in Asia and most of the Americas, and its position as the world’s second-largest ice cream company, behind Unilever. 

The JV ‘marries’ Nestle’s strong brands and presence in convenience stores and ice cream stands with R&R’s manufacturing agility and footprint at traditional retailers. 

Aside from the ice cream businesses of Nestle and R&R, which makes Cadbury Flake Cones and other frozen treats, Froneri will include Nestle’s European frozen food business, excluding pizza in Italy, and its chilled dairy business in the Philippines. Nestle has other joint ventures, with US cereal maker General Mills and one with French dairy firm Lactalis.