Nestlé is in advanced discussions to sell its remaining in-house ice cream operations as chief executive Philipp Navratil accelerates a strategic overhaul aimed at simplifying the Swiss food group and sharpening its focus on higher-growth categories.
The company is negotiating the disposal of ice cream assets generating around SFr1bn in annual sales across Canada, Chile, Peru, Malaysia and Thailand, including products such as KitKat ice cream and Coffee Crisp, to Froneri, its long-standing joint venture with PAI Partners.
Nestlé had already transferred control of its European and US ice cream units to Froneri following the creation of the joint venture in 2016. The proposed transaction would further reduce its direct exposure to a category that, while profitable, represents a relatively small share of group revenue in a business that generated more than SFr90bn in total sales last year. According to Reuters, consumer goods companies across Europe are increasingly shedding non-core assets to prioritise scale in categories with stronger pricing power and more predictable demand, particularly as input costs and currency volatility continue to pressure margins.
The move mirrors broader restructuring across the sector. Unilever completed the spin-off of its Magnum ice cream arm last year, signalling a renewed emphasis on operational focus and capital discipline among multinational food groups. Nestlé has confirmed it intends to retain its 50% stake in Froneri, which was valued at approximately €15bn including debt in October, underlining that the transaction is designed to consolidate ownership structures rather than exit the ice cream market entirely.
Navratil, who took the helm in September, has framed the review as part of a wider effort to concentrate on core divisions such as coffee, pet care, nutrition and mainstream food and snacks. These categories collectively account for the bulk of operating profit and have historically delivered more resilient volume growth. Nestlé’s coffee portfolio, anchored by Nescafé and Nespresso, competes in a global market estimated by industry researchers to exceed $100bn annually, while pet care remains one of the fastest-growing segments in packaged goods, driven by premiumisation and demographic shifts.
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The restructuring comes amid cost pressures linked to US import tariffs, foreign exchange movements and constrained consumer spending in several developed markets. In October, Navratil outlined plans to cut 16,000 jobs as part of a programme to restore margin momentum. Investors have pressed large food manufacturers to lift volume growth after a prolonged period in which price increases, rather than higher sales volumes, drove revenue expansion.
Nestlé reported organic sales growth of 4% in the fourth quarter, ahead of market expectations of 3.4%. The increase was supported by price rises of 2.8% and real internal growth of 1.3%, indicating a recovery in volumes after last year’s 0.8% figure. For 2026, the group projects organic growth of between 3% and 4%, with underlying trading operating profit margin expected to improve from 16.1% in 2025.
Balance sheet metrics also strengthened. Net debt declined to SFr51.4bn at the end of December from SFr60bn six months earlier, supported by cash generation. The board has proposed increasing the dividend by 5 centimes to SFr3.10 per share. Shares rose 2.8% in early afternoon trading following the announcement, reflecting investor approval of the portfolio reshaping and improved cash flow position.
The strategic reset, however, unfolds against the backdrop of the largest infant formula recall in the company’s recent history. Management has indicated that remedial measures were implemented swiftly to address regulatory concerns and protect consumer confidence, and it does not anticipate long-term reputational damage.
Nestlé has also concluded a review of underperforming vitamin and supplement brands and is engaging potential buyers, while preparing to deconsolidate its waters business from 2027. Analysts have speculated about the future of US frozen foods within the portfolio, though the company maintains that division remains profitable and cash generative.
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