General Mills, the Minneapolis-based food giant, has agreed to sell its Häagen-Dazs ice cream shops in mainland China to an investor group that includes Chinese tea brand Ningji. The deal, announced late Monday, allows the buyers to exclusively operate the Häagen-Dazs brand in ice cream shops and gifting businesses across the country, while General Mills will continue selling Häagen-Dazs ice cream to Chinese retail and food service operations.
Deal Details and Financial Terms
Financial terms of the transaction were not disclosed. The deal is expected to close by the end of this year. General Mills did not immediately respond on Tuesday when asked about the number of Häagen-Dazs stores it operates in China. In its latest annual report, the company stated it operated 332 ice cream parlors worldwide.
Ningji's Role and Market Position
Ningji, which operates around 3,000 retail tea outlets in China, opened its chain of stores in 2021 and has received funding from ByteDance, the Beijing-based creator of TikTok, and Shunwei Capital. This acquisition marks a significant expansion for the tea brand into the premium ice cream market.
Challenges for Häagen-Dazs in China
Yaling Jiang, an independent Chinese consumer analyst, noted that Häagen-Dazs has been charging premium prices in China “without delivering sufficient product value or cultural relevance.” She added that its traditional ice cream with higher fat content has “passed its peak” in China, as low-fat, airy gelato options become more popular among consumers.
Broader Trend of Foreign Businesses Shifting Ownership
The sale reflects a broader trend of foreign businesses transferring ownership of their Chinese operations to local investors, amid stagnating consumer confidence and slowing economic growth in the country. Starbucks announced in November that it would form a joint venture with Chinese private equity firm Boyu Capital, valued at about $4 billion, allowing Boyu to hold up to a 60% stake in its China operations. In February, Restaurant Brands International, the parent company of Burger King, formed a joint venture with Chinese investment firm CPE, which invested about $350 million for an approximately 83% stake in the Burger King chain in China.
