UPDATED: Nestle and R&R serve up new joint venture

Food giant Nestle and R&R Ice Cream have completed a deal to create Froneri, an ice cream and frozen food joint venture, which could help both firms to increase their market shares during a period of rapidly changing consumer tastes.

Ibrahim Najafi, the former CEO of R&R Ice Cream

The 50/50 joint venture, which had been announced in April, will combine Nestle and R&R ice cream businesses across Europe, the Middle East, Argentina, Australia, Brazil, the Philippines and South Africa.

“With sales of around 2.6 billion euros (£2.27 billion), Froneri will operate in 22 countries across the world, employing around 15,000 people,” Froneri said.

Sign up to our Business newsletter

Sign up to our Business newsletter

It will also include Nestle’s European frozen food business, excluding pizza and retail frozen food in Italy, as well as its chilled dairy business in the Philippines.

The terms of the transaction were not disclosed.

In a statement, Froneri said: “Froneri will build on the success of Nestlé’s strong brands and experience in ‘out of home distribution’ and R&R’s competitive manufacturing performance and significant presence in retail.

“Froneri’s leadership team combines industry expertise, and business acumen, from across Nestlé and R&R.”

The company’s board of directors is chaired by Luis Cantarell, Nestlé’s executive vice president, for Europe, Middle East and North Africa and its chief executive is Ibrahim Najafi, who was the CEO of Yorkshire-based R&R.

The agreement followed months of formal talks between Nestle and R&R’s owner, PAI Partners.

Speaking in April, Mr Najafi, said: “This is great news for us. It’s something that we’ve been working on ever since our first deal with Nestle back in 2001, when we had an agreement with them in the UK.

“We’ve been partners with Nestle, we know Nestle very well so we’ve been working really hard on this one for a while.

“I feel thrilled about it, Nestle’s a great company and a great partner.”

The venture followed a portfolio review aimed at improving Nestle’s performance, which has been weakened by slowing emerging markets, a change in consumer tastes toward fresher foods, and heightened competition.

Mr Najafi said that the skills of the people at both businesses complemented one another and that the brands fitted “like a glove to a hand”.

R&R employs 800 people at its headquarters in Leeming Bar, North Yorkshire. The joint venture will not lead to any job losses, Mr Najafi said.

“Leeming Bar has always been key to our business,’’ Mr Najafi said earlier this year.

R&R can trace its roots back to 1932 when a young Italian, Regina Roncadin, opened her first ice cream parlour in Germany, In 1970, her nephew established Roncadin’s ice cream parlours across the country.

In Yorkshire, farmer Jonathan Ropner and businessman James Lambert formed Richmond Ice Cream in 1985. Richmond Foods merged with Roncadin in 2006, and R&R was born.

Mr Lambert stepped down from his role as non-executive chairman of R&R Ice Cream in 2014. Under Mr Lambert’s leadership, R&R became the second largest take-home ice cream manufacturer in Europe and the largest private label ice cream manufacturer in the region.

Mr Lambert has received a number of accolades during his 30-year career, including the individual award at The Yorkshire Post’s 2012 Excellence in Business Awards. He was also named Ernst & Young’s Overall North Entrepreneur Of The Year in 2013.