Nestlé and PAI Partners form joint venture for frozen pizza brands in Europe
24 Apr 2023 --- Nestlé and private equity firm PAI Partners are uniting in a joint venture for Nestlé’s frozen pizza businesses in Europe. The company will be headquartered in Germany and operate two facilities, one in Nonnweiler, Germany, and the other in Benevento, Italy. The transaction is expected to close in the second half of 2023, still pending regulatory approval. Financial details of the union have not yet been disclosed.
The venture will only cover Nestlé’s presence in Europe, with its North American efforts existing independently of today's proposed partnership.
“We took a thorough look at our European pizza business and concluded that partnering with PAI provides the best platform to develop its full potential,” says Marco Settembri, executive vice president and CEO of Zone Europe at Nestlé.
“Nestlé will remain invested in this business and participate in future growth and value creation as the joint venture continues to provide the best pizza for consumers and retail partners.”
Nestlé’s current pizza business in Europe is distributed under the Wagner, Buitoni and Garden Gourmet brands across most of Europe, including in Germany, Italy, France, Spain, Switzerland, Portugal, Austria, Belgium and the Netherlands.
This will be the second joint venture between Nestlé and PAI Partners, following the creation of ice cream manufacturer Froneri in 2016.
“This transaction is testimony to our relationship with Nestlé and brings together its brands with PAI’s depth of expertise,” adds Frédéric Stévenin, a managing partner at PAI Partners.
Nestlé adjusts its sales
This news follows Nestlé investors have been recently calling on the company to rebalance its sales toward healthier products. Coordinated by responsible investment NGO ShareAction, the group of investors expressed their support for Nestlé’s recent nutrition-focused disclosure but said it doesn’t go far enough.
However, in response to a growing demand for immunity-boosting food and plant-based alternatives, Nestlé recently unveiled a plethora of NPD linked to wellness, health and nutrition.
These included responses to consumer demand for healthier, low-carb options such as California Pizza Kitchen’s gluten-free BBQ chicken frozen pizza with a cauliflower crust, launching this month.
Similarly, Life Cuisine’s Carb Wise single-serve pizza line added Keto-Friendly Veggie Pizza as an option for keto-friendly and low-carb diets. DiGiorno will also showcase its gluten-free crust pizza.
These alternative versions of classic pizzas come as rising prices amid inflation drive a continuing tomato shortage, forcing chefs to get inventive with tomato-free bases.
Inflation has squeezed more than just tomatoes. Whereas Nestlé has posted its highest sales growth in 14 years, historically high commodity prices have punished the company’s volume growth, which has remained flat from one year ago.
The company managed to increase its sales by 8.4% in 2022 to CHF 94.4 billion (US$102.42 billion), driven by price increases of 8.2% and the recovery of out-of-home channels.
However, according to CEO Mark Schneider, the Swiss food and beverage giant profit margin decreased by 2.6% – a “massive” amount, he stresses.
By James Davies
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