Sector News

Nestle switches delivery model for some U.S. frozen foods, cuts 4,000 jobs

May 8, 2019
Consumer Packaged Goods

Nestle, the world’s largest packaged food company, said it plans to abandon direct-store delivery of frozen pizza and ice cream in the United States, a move that will cut 4,000 jobs.

Instead of delivering frozen pizzas and ice cream directly to stores, Nestle said, it will switch to the network of warehouses it already uses for frozen meals and snacks.

Nestle said the new model would make operations more efficient and profitable, but it would have to shut eight company-owned frozen distribution centers and its frozen inventory transfer points.

Nestle said its plans would mean a one-time cost of about $500 million, and a one-time negative sales impact of about $450 million.

The move will result in the closure of eight company-owned frozen distribution centers and frozen inventory transfer points, the maker of DiGiorno pizza and Edy’s ice cream said on Tuesday during an investor presentation.

“This is massive … in terms of the value it can translate into,” Chief Executive Mark Schneider said.

Investors have long pressed Nestle to improve the performance of its frozen food business. Demand for frozen food in the United States – where Nestle leads the market by share – has exploded in recent years among millennials looking for convenient, healthy ready meals.

By Martinne Geller, Richa Naidu and Silke Koltrowitz

Source: Reuters

comments closed

Related News

March 24, 2024

Aldi’s new flat and stackable wine bottles “make light work of heavy shopping baskets”

Consumer Packaged Goods

Collaborating with Packamama, Aldi has rolled out the “UK’s first” supermarket own-brand flat wine bottles within its Chapter & Verse label. The recyclable ergonomic packaging concept is made from 100% recycled PET (rPET) and available for shiraz and chardonnay options.

March 24, 2024

Health, sustainability, and a taste for adventure drive snacking behaviors: Mondelēz State of Snacking report

Consumer Packaged Goods

For the fifth year in a row, global consumers expressed a preference for snacking over traditional meals, with six in 10 consumers saying they’d rather eat several small meals throughout the day than a few large ones, according to the fifth annual State of Snacking report from Mondelēz International. Nearly nine in 10 (88%) consumers snack daily.

March 24, 2024

Shareholders challenge Nestlé to increase sales of healthy foods

Consumer Packaged Goods

The shareholders are urging Nestlé to set a target to boost the proportion of its sales from healthier products amid concerns regarding regulatory, reputational and legal risks faced by the company, as well as the public health implications “associated with an over-reliance on less healthy foods”.

How can we help you?

We're easy to reach