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The big scoop: lemon tea chain Ningji to revamp Haagen-Dazs’ struggling China business

General Mills offloads ice cream brand’s China stores, as foreign businesses revamp models amid heated domestic competition

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Haagen-Dazs currently operates nearly 200 stores in mainland China. Photo: Handout
Zhu Wenqianin Beijing
General Mills is following in the footsteps of Starbucks and Burger King by offloading its mainland China Haagen-Dazs stores to an investor group led by local chain Ningji Lemon Tea, in a move analysts see as a proactive revamp of foreign business models amid China’s fast-evolving competitive landscape. The deal is expected to boost profitability.
“Fuelled by the rise of home-grown brands, China’s consumer market features fiercer competition and faster industry shifts than the global average,” said Wang Shuo, analyst at Shanghai-based LeadLeo Research Institute. “Legacy multinational management structures can no longer keep pace with local market dynamics.”

Minneapolis-based General Mills said on Monday that it had signed a definitive agreement with an investor consortium including Ningji, a start-up lemon tea chain in China with more than 3,000 signed stores nationwide.

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The buyer would receive an exclusive licence to use the Haagen-Dazs brand in ice cream stores and gifting lines, while General Mills would retain and operate the Haagen-Dazs retail and food service operations on the mainland, according to the statement.

The deal was expected to close by year-end, subject to regulatory approvals and other customary conditions, with financial details undisclosed, the statement said.

Haagen-Dazs ranked third among ice cream brands operating on the mainland by food service transaction value last year. Photo: Handout
Haagen-Dazs ranked third among ice cream brands operating on the mainland by food service transaction value last year. Photo: Handout

“Having long operated in China and harvested early market gains, Haagen-Dazs now struggles with its mid-quality, high-price formula amid weaker consumer confidence, spending power and appetite driven by macroeconomic uncertainties,” said Zhu Danpeng, an independent food and beverage analyst in Guangzhou, southern Guangdong province.

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