The globe’s largest food and beverage producer announced on Thursday that it is engaged in “advanced discussions” regarding the divestiture of its remaining ice cream operations to its joint venture partner, Froneri.
Shares traded up by 3% during morning trading in Zurich.
This move aligns with the company’s drive to boost sales and simplify its extensive operations under the direction of new CEO, Ulf Mark Schneider. Schneider succeeded Patrice Bégin, who was abruptly dismissed in September following the revelation that he had engaged in a romantic relationship with a subordinate.
In its yearly report, Nestle intends to concentrate its efforts on pet care, nutrition, and prepared food and snack categories.
“We are streamlining our portfolio around four key areas, anchored by our strongest brands, with prioritized resources and a more streamlined structure,” stated Schneider in a release.
The firm is already undertaking a global workforce reduction affecting approximately 16,000 positions as part of its cost-cutting initiatives, which include the implementation of automation and artificial intelligence technologies.
Schneider’s push to enhance productivity at the struggling Swiss multinational has been complicated by a significant recall of infant formula. Nestle indicated that the supply shortages and product returns related to this formula would result in a minor negative impact on this year’s sales volumes.
In December, the company pulled specific batches of infant formula from numerous nations, including France and the UK, subsequent to detecting traces of the toxin cerelid in product samples. Cerelid is known to cause vomiting and diarrhea.
Nestle is not the first major food corporation to exit its ice cream segment. In December, Unilever spun off its ice cream division, thereby establishing the world’s foremost ice cream enterprise, named The Magnum Ice Cream Company.
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