ice-cream war presentation

8/11/2019 Ice-cream War Presentation

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ICE CREAM WARNestl vs. Unilever

2007


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Presentation Outline

1. Case Abstract

2. Key points

3. Discussion Questions

4. Recommendation


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Case abstract


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Case abstract

USD57 billion industry

Nestle & Unilever account for 1/3 of the market, the

rest are highly fragmented

Growing and profitable industry with increasing sales

in different markets

2 giants started their head-to-head war since the

1990s


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Key points


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Acquisition Campaigns

Nestle Unilever

obtained the rights to sell

Hagen-Dazs in the U.S.

and Canada; bought

Mvenpick

17.5% share of the world

market

gobbled up Ben & Jerry's;

acquired Breyers Ice

Cream

16% share of the world

market


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Similarities

Super premium products

Health consciousness

Asia Pacific region: the biggest growth prospect


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Discussion questions


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1)Why is the ice cream business so

attractive for Nestle and Unilever?

The ice cream sale in the world is $59 billion, Western Europe: $21.5 billion, North

Americans: $16.3 billion worth

Ice cream business is in a growing and profitable business

Global ice cream sales are rising 2.5% annually and will hit $65 billion in 2010.

In China and Brazil, the annual sales are soaring 8.5% and 8%, respectively.

Nestl took over Hagen-Dazs, Dreyer's, and Swiss brand Mvenpick. Unilever

bought Breyers Ice Cream and Ben & Jerry's. Today, Nestl reached a 17.5% share

of the world market, while Unilever is close behind with 16%.


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Profit in first-half 2007

Nestle Unilever

nearly 20% of its $42billion revenues come from

milk products and ice

cream division

$900 million in profits

ice cream and beveragesdivision supplied just over

20% of its $26.7 billion\

ice cream alone accountedfor 10% of Unilever's $3

billion


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2)What are the pros and cons of focusing on

the super premium ice cream category?


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Benefits

Highly fragmented market

=> boost differentiation of products

Dreyers Grand Ice (Nestl); Ben & Jerrys

(Unilever) are famous for lower-fat and lower-

calories

=> fit for Health Consciousness trend Better reputation

Take advantage of existed customers


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Problems

Highly fragmented market, there are too many competitors

=> customer loyalty is not high, can not satisfy every nations

demand, esp. Chinese market

Hidden competitors occupy nearly 65% of the market

=> high risk of losing customers

Huge profit and revenue come from super premium ice-cream

=> high financial risk


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3)What attraction does Asia have for Nestle

and Unilever?

Asian market penetration remains low

The increasing globalization

Tropical climate countries

High young population


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Recommendation


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For supper premium ice-cream segment

- New types

- Focus differentiation

- New supplier & technology to reduce cost

For expanding in Asian market

- New flavour- Acquire local business


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Q & A


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Thank you

ice-cream war presentation

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