Nestlé’s Leadership Shake-Up with CEO Mark Schneider Departing as Laurent Freixe Takes the Helm

Nestlé shares took a hit following the unexpected departure of CEO Mark Schneider, who was replaced by longtime company veteran Laurent Freixe. Schneider’s sudden exit, announced late Thursday after a board meeting, marked the end of his nearly eight-year tenure as the first external leader of Nestlé in almost a century.

The news unsettled investors, who had already been losing confidence in Schneider over the past 15 months. As trading began, shares of the world’s largest food company, known for brands like KitKat and Nescafé, fell by nearly 4%.

Freixe, a 62-year-old French executive with deep ties to Nestlé, has already stepped into his new role. He faces the challenging task of regaining market share and boosting sales in a competitive environment. Nestlé has lagged behind rivals such as Danone and Unilever in recent quarters, prompting Freixe to emphasize a return to organic growth over acquisitions.

Freixe outlined his strategy, stating that the company’s focus would be on bolstering its existing portfolio and prioritizing organic growth. While portfolio adjustments may occur, he stressed that expanding market share through investment in Nestlé’s brands and growth platforms would be the top priority.

Critics have argued that Nestlé’s heavy reliance on price hikes has hurt sales volumes as financially strained consumers opt for more affordable alternatives. Freixe, well-regarded at Nestlé’s headquarters in Vevey, Switzerland, brings experience from leading the company’s European business post-global financial crisis and, most recently, driving strong growth in Nestlé’s Latin America zone.

Jean-Philippe Bertschy, an analyst at Bank Vontobel, commented that with Freixe in charge, Nestlé would likely return to its core strengths. He described Freixe as a “sales and marketing guy” with a genuine passion for the products, noting that recent success stories in the food industry, such as Lindt and Danone, have been led by CEOs with similar backgrounds. Bertschy emphasized that restoring sales growth will be crucial for regaining investor trust.

Nestlé’s shares, which reached a record high in January 2022 amid a pandemic-driven boom, have been in decline since May 2023 following a series of setbacks, including earnings disappointments and downgraded guidance.

Schneider had initially earned praise for his efforts to revitalize Nestlé, including the sale of the U.S. confectionery unit to Ferrero for $2.8 billion in 2018 and the divestiture of several North American water brands for $4.3 billion three years later. However, his tenure was also marked by missteps, such as the $2 billion acquisition of a peanut allergy treatment company, which was later sold at a significant loss.

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