Nestlé considers ice cream sale to Froneri as recall crisis weighs on profits

Nestlé is in advanced talks to sell its remaining ice cream business to joint venture partner Froneri as part of a wider strategic shake-up, after profits fell and the group was hit by the fallout from a major infant formula recall.

The KitKat and Nescafé maker said it was “sharpening the portfolio around four businesses” and confirmed it was in “advanced negotiations for the sale of our remaining ice cream business to Froneri,” as it focuses on coffee, petcare, nutrition and food & snacks.

CEO Philipp Navratil said the company is accelerating efforts to streamline operations and prioritise its core growth areas, suggesting ice cream is no longer central to its plans.

“Our remaining ice cream business is strong, but small, and is a distraction for us,” he said.

Profit decline and recall impact

Nestlé reported net profit of CHF9.0 billion (£8.66bn) for 2025, down 17 per cent year-on-year, while sales fell 2 per cent to CHF89.5bn. Organic growth was 3.5 per cent, supported by price increases, particularly in coffee and confectionery.

The results were overshadowed by a global recall of infant formula products launched in December after possible contamination with cereulide, a toxin that can cause nausea and vomiting. The recall spanned Europe, Asia and the Americas and triggered a public video apology from Navratil, while also affecting rival producers including Danone and Lactalis.

The company said the recall had already led to inventory write-offs and sales returns in 2025 and warned of further disruption this year. Chief financial officer Anna Manz said: “One-off Q1 impact of sales returns and stock shortages associated with infant formula recall will be roughly CHF200 million.”

Nestlé confirmed production has now resumed at affected factories and stocks are being replenished.

Strategic reset to focus on core brands

The potential disposal of ice cream is part of a broader restructuring designed to simplify the business and unlock growth. Nestlé already operates a global ice cream joint venture with Froneri, which produces brands including Häagen-Dazs and Rowntree's ice cream in many markets.

In October, Froneri secured investment from Goldman Sachs and Abu Dhabi Investment Authority, valuing it at €15bn (£13.1bn). The business competes with the newly listed Magnum Ice Cream Company, which became a standalone business after its long-awaited split last year from Unilever.

Nestlé is also reviewing other non-core assets and has begun engaging potential partners for parts of its waters and beverages division.

Despite the challenges, Navratil said Nestlé’s underlying performance improved during the year, pointing to stronger growth momentum in the second half and continued investment behind key brands.

“Real internal growth (RIG) was positive across all Zones and global businesses,” he said. “We are stepping up our efficiencies and strengthening our financial position.”The Switzerland-based food and drink maker may also consider selling some of its remaining fully-owned ice cream operations to the Froneri venture, the report added, citing people with knowledge of the matter.