Dive Brief:
- Nestlé said Laurent Freixe will become CEO on Sept. 1, replacing Mark Schneider who is leaving the company after nearly eight years in the top role. Freixe, who joined Nestlé in 1986, is currently executive vice president and CEO of Nestlé’s Zone Latin America.
- During Schneider’s time with Nestlé, he reshaped the company’s portfolio by divesting slower-growing businesses and doubling down on high-growth categories like coffee, pet care and nutritional health products.
- The change in the top post at the food and beverage giant comes as it struggles to lure cash-strapped consumers to purchase its well-known brands, such as Lean Cuisine, DiGiorno, SweetEarth and HotPockets due to inflation.
Dive Insight:
Nestlé, the world’s largest food maker, has seen its business change significantly under Schneider’s leadership. Now, with his surprising decision to step aside, the Switzerland-based company is making a major change to its executive ranks.
In picking Freixe, Nestlé is returning to its roots in selecting a CEO from within the company. Schneider was hired by Nestlé from the healthcare company Fresenius Group where he also was CEO — first external hire in almost a century, according to Reuters.
Freixe, however, is no stranger to Nestlé when it comes to its strategy and efforts to position its portfolio to better respond to what people eat and drink and where they consume it. His experience and insight should allow him to easily transition to the top role at a time when Nestlé and other food companies can ill-afford to miss a beat due to inflation, global turmoil and changing consumer habits.
The company noted that during Freixe’s tenure, he has strengthened “the strategic direction of the company and its portfolio.” Freixe also has worked to improve productivity, increase operational efficiency, simplify processes and drive innovation.
Paul Bulcke, Nestlé’s chairman, said Freixe has “demonstrated his ability to deliver results in challenging market conditions.”
He’s “a talented leader with strategic acumen, extensive in-market experience and expertise as well as a deep understanding of markets and consumers,” Bulcke added. “Laurent is the perfect fit for Nestlé at this time.”
The Essentia and Nescafé parent said last month that pricing for its products had fallen faster than initially predicted due in part to increased promotional activity to encourage consumers to buy more. Nestlé lowered its organic sales growth forecast in 2024 to “at least” 3% compared to a prior estimate of around 4%.
Freixe said that while there will “always be challenges,” Nestlé has “iconic brands and products, an unmatched global presence, leading innovation and execution capabilities and above all, exceptional people and teams. We can strategically position Nestlé to lead and win everywhere we operate.”
Schneider’s tenure at Nestlé was highlighted early on by pressure from activist Third Point, which prompted the CPG giant to accelerate its push into faster-growing areas while jettisoning more mature operations.
It divested its iconic confections segment, including brands like Crunch, Baby Ruth and Butterfinger, its ice cream businesses and the majority of its North American bottled water operation.
In its place, it inked a $7.15 billion deal with Starbucks to sell the chain’s packaged coffee in grocery stores and other outlets around the world. It also purchased a majority stake in the popular coffee shop chain Blue Bottle and premium water Essentia.
Nestlé doubled down on health and wellness through a slew of deals by taking majority stakes in Vital Proteins and Orgain, a maker of protein powders, shakes and bars, and purchasing hydration brand Nuun and nutritional supplement provider The Bountiful Co.
While Freixe will inherit a more modernized portfolio, he will have plenty to keep him busy.
Many of Nestlé’s offerings, including pet and coffee, surged during the pandemic as people spent more time at home. Growth recently has slowed in these segments and there will be pressure to improve the businesses, especially with consumer spending down.
Similar to other executives at the helm in the food industry, Freixe will face challenges in innovating, growing market share and keeping Nestlé’s brands relevant. And with sales slowing, more attention will likely be placed on boosting productivity and managing costs internally.
