Nestlé’s $70 billion infant nutrition business faces twin pressures on sugar and safety

Nestle India

• Nestlé faces scrutiny over sugar and recall issues in baby food.
• India not hit by recall, but sugar controversy hurt reputation.
• Nestlé removed added sugar from Cerelac in India by late 2025.

Did our AI summary help?

Nestlé SA, the world’s largest food company, is facing fresh scrutiny in its infant nutrition business, a segment valued at roughly $70 billion globally.

While India has not been directly impacted by the recent global product recall, experts say the sensitivity surrounding infant food means reputational concerns could still influence the company’s market positioning in one of its most important growth markets.

Two developments — a controversy over added sugar in emerging markets and a global product recall linked to contamination — have put the company’s most sensitive category under pressure and shifted management focus toward rebuilding consumer trust.

India sits at the centre of this challenge. The country is among Nestlé’s key Cerelac markets and a major long-term driver for infant nutrition demand. Analysts tracking the sector say that even when operational impact is limited, trust-related issues in baby food categories can affect brand perception, doctor recommendations, and ultimately market share over time.

What is the issue?

The first issue relates to product formulation. A 2024 investigation by NGO Public Eye and International Baby Food Action Network (IBFAN)  found that Nestlé sold infant products such as Cerelac and Nido with added sugar in countries, including India, Nigeria and the Philippines, while similar products sold in parts of Europe contained no added sugar. IBFAN is a global network of over 270 public interest groups in 168 countries,  working around the world to reduce infant and young child morbidity and mortality.

Nestlé initially maintained that it complied with local regulations in each market, but criticism from health experts and consumer groups persisted. By late 2025, the company had removed added sugar from 14 Cerelac variants in India and said it was working on similar reformulations in other markets.

Although the company made reformulations or changed recipes to reduce sugar  in some countries , a new investigation from International Baby Food Action Network say that Nestle's  baby food on the African continent contains alarmingly high levels of added sugar.

The second challenge emerged in 2026, when Nestlé announced a large global recall of infant formula products after detecting cereulide, a toxin associated with Bacillus cereus, in certain batches. The issue was traced to ARA oil supplied by a third-party vendor. Nestlé terminated the supplier contract, strengthened testing protocols and recorded a financial impact of about 185 million Swiss Franc from write-offs and returns.

India not affected

India was largely insulated from the recall because Nestlé manufactures infant nutrition products locally. Nestlé India reiterated in January that none of its locally sold infant formula products were affected and that domestic manufacturing complies with FSSAI safety requirements. However, the earlier sugar controversy did affect the company’s reputation in the country and briefly weighed on its share price. Indian regulators have since begun reviewing infant food standards, while Nestlé has started rolling out “No Added Sugar” labels in response to consumer concerns.

People familiar with the company’s operations told Moneycontrol that Nestlé maintains multiple layers of quality checks across its global supply chain and treats product safety as a central priority. Nestlé India’s broader food portfolio, including Maggi noodles — which sells roughly 1 crore packets daily — continues to have a stable quality record in the market.

Globally, Nestlé remains the market leader in infant nutrition with more than 20 percent share. The segment sits within the company’s Nutrition and Health Science division, which contributed about 17 percent of group revenue in 2025.

The issues are not unique to Nestlé. Food companies often adapt formulations to local regulations and consumer preferences, and rivals, such as Danone and Reckitt, follow similar practices across markets. However, the recall has intensified scrutiny across the industry. Dutch consumer group Foodwatch has filed complaints in France against several companies, including Nestlé, Danone and Lactalis, raising concerns about traceability and supply chain oversight.

Regulators are also paying closer attention. In the United States, the FDA introduced a long-term national strategy in 2025 to strengthen infant formula safety after shortages triggered by the Abbott recall in 2022. The plan includes tighter pathogen monitoring requirements and faster disclosure of safety data by manufacturers.