Ice Cream Industry Faces Tough Times: Companies Explore New Strategies for Profitability

Ice cream companies are facing increasing challenges in the industry, prompting them to explore new strategies for profitability. While Nestlé made changes years ago, Unilever is just beginning to reorganize its ice cream business. According to the president of Glacesuisse, Swiss ice cream manufacturers, sales decreased significantly in June compared to previous years, with more than half of the annual volume sold during the summer months.

The industry has seen some growth up to mid-May, but the overall outlook for the year depends heavily on sales in the summer months. In recent years, ice cream sales in Switzerland have increased by 3 to 5 percent. Factors such as weather dependence, expensive logistics, and increased consumption of store-brand ice cream have influenced the industry. Major consumer goods manufacturers like Unilever and Nestlé are reorganizing their ice cream divisions to adapt to changing market dynamics.

Unilever announced plans to spin off its ice cream business in March while Nestlé has already restructured its ice cream division through a joint venture with Froneri. This move has allowed Nestlé to streamline its operations and maximize production efficiency. Froneri has gained market share by offering a variety of well-known brands and private labels for retailers, positioning itself as a key player in the industry.

Despite challenges like competition from private labels, complex logistics, and health concerns, companies like Ferrero are investing in the ice cream sector to expand their brand portfolios. The rise of weight loss trends and health-conscious consumers have impacted ice cream sales, particularly in the US market. However, Nestlé’s partnership with Froneri has enabled it to mitigate some of these challenges and maintain a strong position in the market.

Looking ahead, potential scenarios include a sale of Froneri to financial investors or an IPO as well as further restructuring within the ice cream industry. While challenges persist, companies are adapting to changing consumer preferences and market dynamics to remain competitive in the ice cream business.