Nestle replaces CEO Schneider with company veteran Freixe

Nestle replaces CEO Schneider with company veteran Freixe/Reuters

Reuters | August 22, 2024 | 11:01 PM IST | Breaking News | Follow on Google News

Nestle replaces CEO Schneider with company veteran Freixe

Nestle replaces CEO Schneider with company veteran Freixe

ZURICH/LONDON, Aug 22 (Reuters) – Nestle (NESN.S), opens new tab is replacing CEO Mark Schneider with company veteran Laurent Freixe, the Swiss food group said on Thursday, marking a change of leadership as it faces a challenge to grow sales.

Schneider has decided to step down as CEO and a member of the board of directors after eight years leading the world’s biggest packaged food company. The 58-year-old German moved the firm away from its decades-old category-led structure in the wake of the COVID-19 pandemic, creating five geographic businesses to steer it through a cost-of-living crisis.

However, after a strong post-pandemic performance, it has struggled recently, last month cutting its full-year sales outlook and saying it had to slow its price hikes as cash-strapped customers became more price conscious.

Shares at the maker of KitKat chocolate bars and Nescafe instant coffee have fallen 8% in 2024, underperforming rivals like Unilever (ULVR.L), opens new tab which has gained 29%.

Where Unilever, Danone (DANO.PA), opens new tab and other food makers have in recent quarters been able to lower some product prices and drive sales volumes, Nestle has struggled to regain shopper loyalty that it lost in price hikes it had to make after the pandemic and Russia’s invasion of Ukraine.

When asked how his strategy would differ from Schneider’s, Freixe told journalists that a nuance will be his focus on core brands.

“I will put a lot of focus on the core. I won’t exclude, of course, M&A,” Freixe said. “But…the big message is focus on the core.”

Freixe, whose new role will be effective on Sept. 1, joined the company in France in 1986.

Since then, he has assumed various positions including managing Nestle’s European business during the 2008 financial crisis. He then headed Nestle’s Americas unit and, eventually led the Latin America business from 2022.

“A veteran, knowing Nestlé in and out, as well as the markets, is taking over,” said Bank Vontobel analyst Jean-Philippe Bertschy in response to the change.

The switch to Freixe is a return to the Nestle’s normal practice of promoting chief executives from within the company.

“I am privileged to have been given the opportunity to continue building and strengthening Nestlé,” Freixe said.

Schneider, the former boss of German healthcare company Fresenius (FREG.DE), opens new tab, was Nestle’s first external hire for its top job in nearly a century when he took charge in 2016.

“Having Laurent, there was no need to look outside,” Chairman Paul Bulcke said.

Reuters