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Iwan Thomas, associate at Charles Russell Speechlys, examines the wave of divestments sweeping through the food and beverage sector. From Unilever's ice cream spin-off to Nestlé's portfolio reset and Coca-Cola's stalled attempt to sell Costa Coffee, major FMCG players are cutting assets and rebalancing around perceived high-growth categories. He considers what this tells us about valuation trends, the categories in question and how FMCG portfolio strategy is evolving for 2026 and beyond.
A story of separation
Across the industry's largest conglomerates, the strategy of owning everything from ice cream to infant formula is giving way to a sharper, more disciplined approach. Brands are now identifying what is core, divesting what is not and redeploying capital where returns are highest.
The most high-profile example arrived in December 2025, when Unilever completed the demerger of its ice cream division into The Magnum Ice Cream Company (TMICC), listed in Amsterdam, London and New York with a market capitalisation of approximately €7.93 billion. The rationale appeared to be clear: ice cream, with its distinct cold-chain logistics and seasonal demand profile, sat uneasily within the broader group.
Unilever's divestments extend beyond ice cream. It has sold the snack brand Graze and reports suggest it may also exit legacy brands such as Marmite, Colman's and Bovril.
Nestlé reached a strikingly similar conclusion, announcing plans to sell its remaining in-house ice cream operations to Froneri, its 50:50 joint venture with PAI Partners. However, ice cream is only one piece of a broader restructuring. Nestlé has launched a sale process for its Water division, is exploring a divestiture of Blue Bottle Coffee and its "Fuel for Growth" programme intends to cut its brands from over 400 to approximately 150.
Elsewhere, Kraft Heinz also announced plans to split into two standalone companies, though the separation was paused by incoming CEO Steve Cahillane in February 2026.
A note on the categories
The assets being shed share clear structural traits. Ice cream, for example, is capital-intensive, highly seasonal and requires specialised cold-chain infrastructure that shares little overlap with a parent company's other operations. Coffee retail, particularly bricks-and-mortar café chains, is labour- intensive, real-estate-heavy and operationally demanding. That being said, the relationship between physical coffee retail and packaged goods is not a one-way street. Established café chains have shown they can credibly extend into the FMCG space and many of these operators have also demonstrated a capacity to extend beyond the café, successfully building retail and packaged goods offerings such as capsules and ready-to-drink lines that leverage the brand credibility earned on the high street, in a way that FMCG conglomerates moving in the opposite direction have struggled to replicate.
The Costa Coffee saga made headlines recently. Coca-Cola acquired the chain for £3.9 billion in 2018, envisaging synergies across ready-to-drink coffee, vending and retail. Those synergies never materialised. CEO James Quincey acknowledged the investment was "not where we wanted it to be". An auction process was launched in 2025, but private equity bidders failed to meet Coca-Cola's expectations, and the sale was shelved in December 2025. Industry expert, Nandini Roy Choudhury, commented that Coca-Cola had tried "to graft a service-heavy retail chain onto an asset-light, brand- driven model, and the cultures never blended".
The coffee retail sector nonetheless continues to evolve rapidly. Brands have been innovating on format, technology and operational efficiency, though that model involves trade-offs, notably a leaner staffing approach that can come at the cost of the craft and product quality associated with traditional speciality coffee chains. However, the broader speciality coffee market, built on trained baristas and in store experience, shows no signs of slowing, and it is in that segment where many established operators continue to deepen their competitive advantage. The challenge for FMCG incumbents is not that coffee is unattractive as a category, Nestlé's Nescafé and Nespresso operations remain pillars of its strategy. Rather, running physical cafés is a fundamentally different business from manufacturing and distributing packaged goods at scale.
External pressures also play their part. Rising input costs, economic uncertainty and the growing influence of GLP-1 weight-loss drugs on consumer snacking behaviour are all reshaping how boards think about category exposure. The businesses being divested tend to share common traits, being complex or distinct supply chains, having seasonal cash flows and limited cross-portfolio synergies.
What the valuations tell us
How the market is pricing these transactions offers useful insight. TMICC is listed at a reference price of €12.80 per share, with Morningstar estimating a valuation of roughly eight times expected 2025 adjusted EBITDA, a figure some commentators described as a "cool valuation". In other words, rewarding focus, but not nostalgia. Froneri, by contrast, was valued at approximately €15 billion (including debt) in October 2025, when PAI Partners restructured its stake and brought in the Abu Dhabi Investment Authority as a minority investor. That higher multiple arguably reflects a premium for Froneri's track record.
More broadly, EBITDA multiples in food and beverage have moved towards the 10–11x range, with buyers willing to pay for quality but exercising greater discipline than previously. The real premium valuations, however, are in functional beverages. PepsiCo's $1.95 billion acquisition of prebiotic soda brand Poppi and Celsius's $1.8 billion purchase of Alani Nu signal that capital is flowing decisively towards better-for-you, functional and wellness-oriented platforms.
Where the capital is going
If divestments define one side of the equation, acquisitions define the other. The brands attracting capital share several characteristics, functional health benefits, global scalability, premium positioning and alignment with evolving consumer preferences.
Mars's acquisition of Kellanova and Ferrero's purchase of WK Kellogg demonstrate that snacking at a global scale remains highly attractive. Hershey's acquisition of LesserEvil reflects a bet on premium, better-for-you snacking. These deals point to a wider conviction that the intersection of health, convenience and indulgence is where long-term growth resides.
What comes next
The direction of travel seems clearer in 2026. The market should expect more divestments. Nestlé's water sale process is underway, with deconsolidation expected from 2027. The Kraft Heinz split may yet be revived under new leadership. Nestlé is also reportedly weighing a reduction of its stake in Froneri itself.
The era of the fully integrated FMCG conglomerate, running every product category from soup to soap, appears to be evolving. Scale alone no longer guarantees relevance. The emerging consensus is that dedicated, focused operators are better placed to drive performance in operationally distinct categories, whether that is ice cream, coffee retail or water. For a company to succeed in this environment, it must build a portfolio that navigates shifts in consumer behaviour, manages rising costs and positions itself around categories where it can credibly claim to be the best owner, not merely the biggest.
