Nestlé’s acquisition of Dreyer‘s will give it the number one spot in the US ice cream market – a position it seeks in every market and category it operates in across the globe. Although this will not please Unilever, the deal really highlights the gap between super-league players and the rest.

Nestlé is merging with the Dreyer’s ice cream group to forge the Dreyer’s Grand Ice Cream Company, in which Nestlé will hold a 67% stake. The US Federal Trade Commission challenged the deal in March, but has now approved the merger with only minor changes to the concessions that Nestle had been offering.

Nestlé and Dreyer’s will divest some of Dreyer’s ‘super-premium’ ice cream brands and Nestlé will have to sell most of its ice cream distribution assets in the US to CoolBrands. However, Nestlé will gain the benefits of Dreyer’s direct store delivery system, which is unrivalled in the US ice cream market and is used to distribute Dreyer’s products, as well as those of other partners.

Nestlé has now secured the number one position in the US ice cream market, a move that will leave Unilever a little less comfortable about hanging onto its number one spot in the world. Nestle has been busy shopping for ice cream companies for a while now to take on its main ice cream rival. After Unilever bought Ben & Jerry’s, Nestlé went and bagged Haagen Dazs as well as the Scholler and Movenpick brands.

Nestlé’s aim in pursuing the ice cream market is to focus on high-margin areas. Nestlé has, like Unilever, aligned its strategy to focus on core strengths and the promotion of its value-added brands. Nestlé’s mission is to be number one or two in every category and country that it operates in, thereby aiming to equal retailers in the power stakes of the consumer goods business.

As companies such as Nestlé continue to focus their vast resources on the creation of value-added areas, it will become increasingly difficult for second tier competitors to successfully compete for shelf space. Although Unilever may be feeling the heat of Nestlé’s latest deal, it is still one of the super-league players that are leaving second tier competitors in their wake.

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