Nestlé takes global ice cream lead
market after getting full ownership of US firm Dreyer's and
successfully tapping into health and convenience trends.
Nestlé announced Thursday that it had achieved full ownership of Dreyer's Grand ice Cream Holdings, giving it a 23 per cent share of the US ice cream market, according to figures from AC Nielsen
The move consolidates Nestlé's position in America, where it has recorded strong sales growth since merging its ice cream division with Dreyer's in 2003. Nestlé took a 67 per cent share of the merger company.
Nestlé also claimed that ownership of Dreyer's, together with its proposed takeover of Delta Ice Cream in Greece, would fetch it a 17.5 per cent share of the global ice cream market.
That would see the firm, already the world's biggest food producer, taking the number one spot in ice cream off Unilever for the first time.
Much of Nestlé's success in ice cream has been built on innovation as well as acquisitions. The group successfully tapped consumer health trends in the US by working with Dreyer's to create Dreyer's Slow Churned Light - containing half the fat and a third less calories than normal ice creams.
It also developed Dreyer's Dibs, bite-sized pieces of ice cream targeted at consumer snacking and convenience trends.
Nestlé, however, still faces a challenge to keep its global ice cream business moving forward.
Sales dipped slightly in the group's fiscal 2005 as a slow-down in Europe offset strong growth in the US. This followed a mere 0.5 per cent rise in organic, global ice cream sales in 2004 - again hampered by a drop in Europe.
A greater presence in emerging markets could be one way to address this, and Nestlé announced early last year that it intended to launch a further 29 ice cream products in China.
The group is also pinning a lot of hope for its whole food division on research and development spending.
"I believe that virtually all our product lines can offer additional nutritional benefits that can make them more attractive to consumers," said chief executive Peter Brabeck-Letmathe in the firm's recent full-year results announcement. He added this would protect the group better against private label copying.
Nestlé recently earmarked €500m to fund the development of more nutritional food processing techniques. The money will go towards a special venture capital fund, set to begin this year under the leadership of current chief financial officer Wolfgang Reichenberger.
