Diving certificate:

• Nestlé announced that Laurent Freixe will become CEO on September 1, replacing Mark Schneider, who is leaving the company after nearly eight years in the top position. Freixe, who joined Nestlé, Nestle in 1986, is currently Executive Vice President and CEO of Nestlé’s Latin America Zone.
• During Schneider’s time at Nestlé, he isThe company’s portfolio was shaped by divesting slower-growing businesses and focusing on high-growth categories such as coffee, pet care and nutritional supplements.
• The change at the top of the food and beverage giant comes at a time when the company is struggling to convince cash-strapped consumers to buy its well-known brands such as Lean Cuisine, DiGiorno, SweetEarth and HotPockets due to inflation.

Diving insight:

Nestlé, the world’s largest food manufacturer, has closed its business under Schneider’s leadership. With his surprising decision to step down, the Swiss company is now making a comprehensive change in its leadership team.

When choosing Freixe, By selecting a CEO from within its own ranks, Nestlé is returning to its roots. Schneider was hired by Nestlé from the healthcare group Fresenius Group, where he was also CEO — first external hire in nearly a century, according to Reuters.

However, Freixe is no stranger to Nestlé is on the right track in its strategy and efforts to position its portfolio to be more responsive to what people eat and drink and where they consume it. His experience and knowledge should allow him to make a smooth transition to the top position at a time when Nestlé and other food companies can ill afford to make a move due to inflation, global turmoil and changing consumer habits.

The company noted that during his tenure, Freixe strengthened “the strategic direction of the company and its portfolio.” Freixe also worked to improve productivity, increase operational efficiency, simplify processes and drive innovation.

Paul Bulcke, Nestlé’s CEO said Freixe had “proven his ability to deliver results in difficult market conditions.”

He is “a talented leader with strategic acumen, extensive market experience and expertise, and a deep understanding of markets and consumers,” Bulcke added: “Laurent is a perfect fit for Nestlé at this time.”

The parent company of Essentia and Nescafé said last month that prices for its products had fallen faster than initially predicted, partly due to increased advertising efforts to encourage consumers to spend more. Nestle lowered his organic sales growth forecast at “at least” 3% in 2024 compared to a previous estimate of around 4%.

Freixe said that while “there will always be challenges,” Nestle 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 wherever we operate.”

Schneider’s tenure at Nestlé faced early pressure from activist group Third Point, which prompted the consumer goods giant to accelerate its push into higher-growth areas and divest from more mature businesses.

It has divested its iconic candy division, which includes brands such as Crunch, Baby Ruth and Butterfinger, its ice cream business and the majority of its North American bottled water business.

Instead, the company signed a $7.15 billion deal with Starbucks to sell the chain’s packaged coffee in grocery stores and other outlets around the world, and it also acquired a majority stake in popular coffeehouse chain Blue Bottle and premium water Essentia.

Nestle has doubled down on its focus on health and wellness through a series of deals, acquiring majority stakes in Vital Proteins and Orgain, a maker of protein powders, shakes and bars, and buying hydration brand Nuun and nutritional supplements provider The Bountiful Co.

Although Freixe will take over a more modern portfolio, he will still have a lot to do.

Many of Nestlé’s Deals including pets and coffee surged during the pandemic as people spent more time at home. Growth in these segments has slowed recently, and there will be pressure to improve deals, especially given declining consumer spending.

Like other top executives in the food industry, Freixe will face the challenge of innovating, growing market share and maintaining the relevance of Nestlé’s brands. And with sales falling, he will likely place greater emphasis on improving productivity and controlling costs internally.