Finance
Nestle announces vitamins business review after sluggish sales growth
Published by Global Banking and Finance Review
Posted on July 24, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 24, 2025
3 min readLast updated: January 22, 2026
Nestle reviews its vitamins business due to slow sales growth, considering divestment of some brands. Shares fell as economic pressures mount.
By Alexander Marrow
LONDON (Reuters) -Nestle has launched a review of its underperforming vitamins business that could lead to the divestment of some brands, it said on Thursday, after reporting its first-half sales volumes grew more slowly than analysts expected.
Shares in Nestle, the world's biggest food producer, fell to a six-month low in early market trade and were 4.7% lower by 0950 GMT.
As the economic downturn globally has squeezed customers and driven them to cheaper alternatives, the Swiss-based maker of KitKat chocolate bars, Nespresso coffee and Maggi seasoning has found it harder to sell its branded projects.
Thursday's results add to investor pressure on CEO Laurent Freixe to revive the company's share price and sales. Since his appointment in August last year, Nestle's share price has lagged rivals, including Unilever and Danone.
The Swiss company on Thursday maintained its 2025 outlook, saying it expects organic sales growth to improve. It estimated an underlying trading operating profit margin at or above 16%, including the negative impact from tariffs and current FX rates.
Nestle's Vitamins, Minerals and Supplements business generates around 1 billion Swiss francs ($1.26 billion) in annual sales, Nestle said.
VMS is part of Nestle's wider Nutrition and Health Science division, which accounted for a little more than 16% of group sales in the first half and recorded a decline in real internal growth - or sales volumes - of 0.8%.
"We have launched a strategic review of our underperforming mainstream and value brands, including Nature's Bounty, Osteo Bi-Flex, Puritan's Pride, and U.S. private label, which may result in the divestment of these brands," Nestle said.
Freixe said Nestle would focus on its global premium VMS brands and that a potential divestment of the others could happen in 2026.
"To us, the highest potential is at the premium end," Freixe told reporters.
GROWTH DISAPPOINTS
Nestle said that first-half organic sales growth, which excludes the impact of currency movements and acquisitions, rose 2.9% in the six months through June, just above the average of analysts' forecasts of 2.8%.
But real internal growth, or RIG, was 0.2%, below the consensus forecast of 0.4%, reflecting softer demand as customers baulk at price increases.
Total reported sales decreased by 1.8% to 44.2 billion Swiss francs, compared to analyst expectations of 44.6 billion francs, a drop Nestle attributed in part to the negative impact of 4.7% from foreign exchange as the Swiss franc has strengthened this year.
Nestle's 2.7% price increases were above the average analyst estimate of 2.5%.
"The headline will be the negative RIG of -0.3% in Q2 when most investors were positioned for a positive number," Barclays analysts said in a note. "This will be seen as a bit disappointing."
Despite the "negative surprise" in Nestle's Health Science unit, Vontobel analysts said the overall results would likely reassure investors that Nestle is on the long road to recovery.
($1 = 0.7923 Swiss francs)
(Reporting by Alexander Marrow and Oliver Hirt; editing by Barbara Lewis)
Nestle launched a review of its underperforming vitamins business after reporting sluggish sales growth, which included a decline in real internal growth.
The review may lead to the divestment of some mainstream and value brands, while focusing on global premium VMS brands.
Nestle's total reported sales decreased by 1.8% to 44.2 billion Swiss francs, which was below analyst expectations of 44.6 billion francs.
Nestle reported a 2.9% organic sales growth, which was just above the average of analysts' forecasts, but real internal growth was only 0.2%, indicating softer demand.
The economic downturn has squeezed customers, driving them to cheaper alternatives, making it difficult for Nestle to maintain its sales growth.
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