Nestle CEO Mark Schneider resigns; company veteran Laurent Freixe to take over as chief

Nestle SA chief executive officer (CEO) Mark Schneider has stepped down after almost eight years to be replaced by the fast-moving consumer goods (FMCG) company's veteran Laurent Freixe at the top spot. The management rejig comes as the world’s biggest food group struggles to grow sales and attract customers to its branded products amid persistent inflation.

Freixe, 62, currently serves as the company's executive vice president and CEO for the Latin American region. Nestle said in a statement on Thursday, August 22, that Frexie, a long-time veteran of the Swiss company, will take over as CEO on September 1.

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Schneider's tenure as Nestle CEO

After years of leading the world's biggest packaged food company, Schneider has decided to step down as CEO and board member. The 58-year-old German moved the firm away from its decades-old category-led structure after 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. Nestle, whose brands range from Nespresso coffee capsules to Purina dog food and Haagen-Dazs ice cream, lowered its sales growth outlook for 2024 last month as it slowed its price increases in the first half of the year. Cash-strapped customers became more price-conscious.

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"Leading Nestle for the past eight years has been an honor for me. I am grateful for what we have achieved, having transformed Nestle into a future-proofed, innovative and sustainable business," said Schneider in a statement.

Shares at the maker of KitKat chocolate bars and Nescafe instant coffee have fallen eight per cent in 2024, underperforming rivals like Unilever which has gained 29 per cent in the same period.

While Unilever, Danone, and other food makers have been able to lower some product prices in recent quarters 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.

Schneider, the former boss of German healthcare company Fresenius, was Nestle's first external hire for its top job in nearly a century when he took charge in 2016. Nestle stock has climbed 22 per cent since Schneider took over at the start of 2017, about half the gain of rival Unilever Plc during the same span.

Nestle said Thursday that Schneider "has actively shaped the company's portfolio, in line with Nestle's strategy and with a focus on high-growth categories like coffee, pet care and nutritional health products".

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Freixe to lead Nestle as CEO

Freixe joined the company in France in 1986 and is a 40-year company veteran, having spent 16 years on the executive board. 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 since 2022. Chairman Paul Bulcke praised his “strategic acumen, extensive in-market experience and expertise, and a deep understanding of markets and consumers.” 

"Having Laurent, there was no need to look outside," said Chairman Bulcke. The switch to Freixe is a return to Nestle's normal practice of promoting chief executives from within the company. "I am privileged to have been allowed to continue building and strengthening Nestlé," said Freixe.

With inputs from Bloomberg, Reuters