As the latest development in its ongoing campaign to pare its noncore assets and potentially tap a new revenue stream to support its reinvention, The Kroger Co. said it is exploring options, including a potential divesture of its Turkey Hill ice cream and related refrigerated dairy and juice brands.
After completing the sale of its convenience-store business unit to the U.K.'s EG Group for $2.15 billion in April, the Cincinnati-based retailer has hired Goldman Sachs & Co. to conduct a strategic review of "options for the Turkey Hill brand, including a sale."
Turkey Hill's manufacturing and distribution facility in the Lancaster, Pa., suburb of Conestoga employs nearly 800 associates who produce milk, ice cream, frozen dairy treats, iced teas and fruit drinks.
Describing Turkey Hill as "a unique, strong, nationally-known brand" in both the CPG space and within Kroger manufacturing's portfolio, Erin Sharp, group VP of manufacturing for Kroger, said in a statement that the "successful and recognizable ice cream and beverage products have the potential for greater growth outside of our company. We want to ensure Turkey Hill has every opportunity to meet its full potential," adding that Kroger believes it is in the best interest of "associates, the Turkey Hill business and our shareholders to explore this course of action."
Possible suitors for the Turkey Hill brand, according to an industry source who requested anonymity, include "the obvious leading ice cream makers, Nestle and Unilever," the latter being the world's largest ice cream manufacturer, as well as Le Mars, Iowa-based Wells Enterprises, which produces Blue Bunny ice cream.
Kroger owns 38 food manufacturing plants, including 19 dairies, that produce its own-brand products for its family of stores.