Dreyer’s Grand Ice Cream to invest US$355m in factory upgrades as sales heatup
USA – Dreyer’s Grand Ice Cream is investing US$355 million in factory upgrades across the US to meet the rising demand for ice cream products.
According to a report by Food Dive, much of the funds will go to the addition of 24 product lines and the accompanying infrastructure needed for storage at its manufacturing facilities.
Following its spun-off and subsequent sale from Nestle in 2019, Dreyers has been busy investing to reposition the company as the premier ice cream maker of choice in the United States.
Between 2019 and 2021, Dreyer’s is estimated to have invested about US$145 million in technology and infrastructure, marketing and quality improvements.
The investment seems to be paying off as the company has seen sales climb to more than US$2 billion last year compared to US$1.8 billion in 2018, according to company data.
The maker of iconic ice cream and frozen novelty brands such as Edy’s, Häagen-Dazs, Outshine, and Drumstick also posted a 4.7% jump in dollar sales for the 52 weeks ending Jan. 23, its fastest rate of growth in several years.
This compared to a 1.7% drop for the category as a whole, according to IRI data cited by the ice cream company.
Dreyer’s was the only major ice cream manufacturer to record positive growth during that period, the data showed.
Dreyer’s Grand Ice Cream also has a dominant position in the frozen novelty snack category.
Drumstick posted US$620 million in U.S. sales for the 52 weeks ending Jan. 30, 2022, according to IRI data shared by Dreyer’s, placing it second only to private label.
To sustain its relatively impressive performance, Dreyer’s has increased its spending to promote brands such as Drumstick and Outshine, giving a marketing boost to a pair of frozen treats that have traditionally lacked publicity.
The manufacturer is positioning Outshine, which has fruit as its first ingredient, as a healthier option.
It relaunched Häagen-Dazs to draw attention to the brand’s use of a few, simple ingredients to make it more relevant to younger consumers.
The future is still bright for Dreyers as ice cream, although volatile, is poised to rebound for the category as a whole.
ResearchAndMarkets estimated the U.S. ice cream market will expand at a compound annual growth rate of 2.49% to 2027.
Nestlé divesture seems to have been a blessing in disguise for Dreyers which, alongside the rest of Nestle’s US ice cream business, was sold to Froneri, a joint venture the Swiss company created six years ago with PAI Partners.
The Swiss food giant is however not very far from the business. It may no longer oversee the business but it still remains a majority shareholder and has three people on Froneri’s eight-person board.
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