Nestle announced on Thursday that CEO Mark Schneider will be stepping down after eight years at the helm, to be replaced by company veteran Laurent Freixe. This leadership change comes as the Swiss food giant navigates challenges to boost its sales growth.
Schneider, 58, joined Nestle in 2016 as the company’s first external CEO in nearly a century, having previously led German healthcare company Fresenius.
During his tenure, Schneider spearheaded a significant transformation of Nestle’s organisational structure, moving away from its traditional category-led model. His leadership coincided with a surge in demand during the COVID-19 pandemic, as consumers stocked up on Nestlé’s food and beverages for home consumption, Reuters reports.
However, recent struggles have prompted this leadership shift. Last month, Nestle cut its full-year sales outlook, citing the need to slow price increases in response to growing consumer price sensitivity.
Despite Schneider’s efforts, Nestle’s stock has faced difficulties, reaching a peak in January 2022 before declining since May 2023. Analysts believe that Schneider’s inability to maintain investor confidence contributed to his decision to step down.
Nestle, the maker of iconic products like KitKat chocolate bars and Nescafé instant coffee, has underperformed compared to rivals such as Unilever and Danone. These competitors have successfully lowered some product prices while boosting sales volumes, whereas Nestle has struggled to regain the consumer loyalty it lost due to necessary post-pandemic price hikes.
Laurent Freixe, 62, will take over as CEO effective September 1. Freixe, a well-regarded figure at Nestle’s headquarters in Vevey, Switzerland, has spent nearly four decades with the company, joining in France in 1986. Over his career, he has held various leadership roles, including overseeing Nestlé’s European business during the 2008 financial crisis and leading the Americas unit. Most recently, Freixe headed Nestlé’s Latin America operations, where he achieved robust growth.
When asked about his strategic vision, Freixe emphasised a commitment to focusing on Nestlé’s core businesses. “I will put a lot of focus on the core,” Freixe said. “I won’t exclude, of course, M&A, but the big message is focus on the core.” Analysts believe Freixe’s deep knowledge of Nestlé’s operations and his expertise in sales and marketing will be crucial as the company works to rebuild market share and boost sales in a challenging environment.
Freixe’s promotion marks a return to Nestlé’s tradition of elevating internal candidates to the CEO role. Chairman Paul Bulcke confirmed that Nestlé had not considered any external candidates, stating, “Having Laurent, there was no need to look outside.” Freixe’s immediate priorities are expected to include turning around underperforming units, such as the health science division and the frozen food business in North America, which includes brands like Lean Cuisine and DiGiorno.
Analysts view Freixe as a “safe pair of hands” for Nestlé, with his insider knowledge and extensive network within the company. “He’s a sales and marketing guy with a real passion for the products,” noted Jean-Philippe Bertschy of Bank Vontobel. Industry observers suggest that his background aligns with the recent trend of successful food companies appointing CEOs with strong sales and marketing experience, as seen with firms like Lindt and Danone.
As Nestlé embarks on this new chapter under Freixe’s leadership, the company remains optimistic about its future. “There will always be challenges, but we have unparalleled strengths,” Freixe stated. “We can strategically position Nestlé to lead and win everywhere we operate.”
