Swiss-headquartered giant Nestlé – the world’s largest food company – is to up its extant stake in US icecream manufacturer Dreyer from 23% to a controlling 67%, merging the two operations to create a global colossus on a sales and volume par with Unilever.
The deal will lift Nestlé’s share of the worldwide icecream market to SwFr7.25 billion ($4.65bn; €4.91bn; £3.14bn). Since the turn of this year, the Swiss group has acquired five per cent of the global icecream market: the Schöeller brand in Germany and, from Pillsbury, Häagen-Dazs in North America.
In the US, Nestlé now has the edge over Unilever with 20% market share, alongside the Anglo-Dutch group’s 16%. The situation places Unilever squarely on the horns of a dilemma, as its best-selling Ben & Jerry’s range is distributed coast-to-coast by Dreyer.
If Unilever leaves the brands in situ, it risks seeing B&J treated as second class citizens when it comes to pushing B&J brands against Dreyer/Nestlé products. Conversely, if it switches distributors, market share could suffer as no-one else comes near to Dreyer in size and reach.
Data sourced from: The Times (London); additional content by WARC staff