Foreign firms take another scoop of American ice cream

By Bruce Horovitz
USA Today

Nothing could be more American than a summer slurp from a double-dip ice-cream cone, right?

Wrong. U.S. ownership of big ice cream brands is melting fast. Yesterday, yet another scoop of the $25 billion global ice cream market fell into foreign hands:

Dreyer's. In a complex deal, Swiss giant Nestle exchanged $2.4 billion in stock for 63 percent of Dreyer's Grand Ice Cream. It could take it all in 2006 or 2007.

"Ice cream still remains an American phenomenon," says T. Gary Rogers, CEO of Dreyer's. "It is part of our heritage and culture."

It's part of our diet, too. Americans eat more ice cream per capita than anyone, he says. And not just in summer, when U.S. sales rise less than 20 percent. Alaskans eat more ice cream per capita than any other state.

Haagen-Dazs. Under the deal, Nestle will merge its Haagen-Dazs unit with Dreyer's. Other ice cream brands now under the combined Dreyer's/Nestle banner: Edy's, Starbucks and Godiva.

Breyers. Unilever, the Anglo-Dutch consumer products firm and world's largest ice cream company, bought the Breyers brand in 1993 from Kraft Foods.

Ben & Jerry's. Unilever purchased then-struggling Ben & Jerry's for $236 million in 2000. Since then, Ben & Jerry's has seen a major uptick in sales as premium brands enjoyed a surge.

Why the foreign ownership? "There is not an international conspiracy to capture the American sweet tooth," says Bob Hilarides, partner at Cannondale Associates. He says the ice-cream market is growing, and multinationals have noticed. It's a far cry from less than a decade ago, when, for the most part, ice creams were regional brands, notes Howard Waxman, editor of Ice Cream Reporter.