How Seven CEOs will Change the Food Industry

Fourteen of the 15 largest food companies have changed CEOs in the past three years. Here’s a look at how seven of them will change the food industry.

By Diane Toops, News & Trends Editor

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“Two years ago, there were those who had lost faith in sparkling beverages and Trademark Coke,” he said. “We had — and continue to have — a different point of view: Sparkling beverages are the oxygen of our company and this entire industry. Through 2007, our three-cola strategy is generating the highest growth rate we've seen in our family of Trademark Coke brands since 1998.”

At a recent meeting with Muhtar Kent, Erin Ashley Smith, consumer staples analyst at New York-based Argus Research Co., found him very friendly and open, and thinks he will be an asset to the company.

“I was impressed with his enthusiasm and honesty about the challenges Coca-Cola is facing in the next 12 months -- the weak economic environment, higher commodity costs, and profits from convenience higher-margin channels coming down,” she said.

Kent spoke about reaching out to the bottlers, and his familiarity with the company will help him in that regard, she adds. “He is also focusing on relationships within the company, and plans to bring more women into management.” Smith points out that Neville Isdell was brought in to restore faith and create a manifesto for growth. “Going forward, Kent will implement that strategy, while being accessible to investors, emphasize Coca-Cola’s sponsorship of the Olympics, international growth opportunities and new product launches.”

 


Paul Bulcke, Nestlé S.A.

 

Since Henri Nestlé developed the first milk food for infants in 1867, and saved the life of a neighbor’s child, Nestlé has aimed to be the world's leading nutrition, health and wellness company.

For the past 11 years, that was the job of Peter Brabeck-Letmathe. Sales approach 90 billion Swiss francs (CHF) currently about $87 billion, making Nestle, based in Vevey, Switzerland, the world’s biggest food company. Twenty-seven brands enjoy sales of CHF 1 billion each, Nestlé has delivered 5.9 percent growth for the past 12 years, and the company has moved from a process and technology-driven agricultural company into a research-led nutrition and wellness company, helped by acquisitions of Novartis Medical Nutrition and Gerber.

Now that job befalls Paul Bulcke, a Belgian businessman and lifelong Nestle employee, who  took over as worldwide CEO in April. He graduated as a commercial engineer at the Katholieke Universiteit Leuven and is an alumnus of the Vlerick Leuven Gent Management School. He began working for Nestle the age of 25 in 1979. He’s worked in Switzerland, Spain, Belgium, Peru, Ecuador, Portugal and Germany. Before his appointment as CEO, he was the executive vice president of the Americas division.

With his appointment, the Nestle board concluded a process initiated in 2005, combining the roles of chairman and CEO in order to accelerate the strategic transformation process in the direction of nutrition, health and wellness.

"The board chose a strong and pragmatic business leader, ideally suited to lead the group in a period that will be marked by a phase of strategic and operational consolidation and a continued broadening of our nutrition, health and wellness business,” said Brabeck-Letmathe, now non-executive chairman of the board, who will focus on long-term strategy.

“At the same time, Nestlé will maintain its strong growth momentum in the developing and emerging world,” Brabeck-Letmathe continued. “Paul Bulcke has a proven performance record both in developing as well as in industrialized markets in Latin America and in Europe. As a member of Nestlé's executive board in charge of Zone Americas, he played a decisive role in transforming this region not only into the group's largest, but also into its most profitable one.”

Bulcke takes the helm when the Swiss giant, with some 280,000 employees, continues to outperform analysts' expectations and forecasts its annual sales will rise 7.5 percent in 2008. But Brabeck-Letmathe is a tough act to follow.

Nestlé is divided into Zone Europe, Zone Americas, Zone Asia, Oceania and Africa, Nestlé Waters, Nestle Nutrition (set up two years ago to target people with specific nutritional needs, from babies to athletes) and Other Food & Beverages (joint ventures and Nespresso). In the first quarter of 2008, sales rose 6 percent to CHF 25,700 billion ($24.8 billion), up 6 percent over the same period last year. Sales were driven by very strong organic growth and acquisitions of Gerber and Novartis Medical Nutrition in 2007.

"The strong start to the year reflects Nestlé's momentum as the world's leading nutrition, health and wellness company,” said Bulcke. “On the basis of this high-quality growth, with a good balance between real internal growth and pricing, I am confident that we will achieve our 2008 targets: organic growth approaching the 2007 level together with improved EBIT margins in constant currencies."

Bulcke’s philosophy that success is "10 percent inspiration and 90 percent perspiration," is a play on Thomas Edison’s belief that perspiration levels come in at 99 percent. Apparently he puts a little more credence in inspiration. His strategy is to grow in emerging markets, nutrition, premium products and foodservice.

"The vision of Nestlé is to be the leading nutrition, health and wellness company in the world," Bulcke told Telegraph.co., a UK newspaper. "When you have a good vision you don't change it dramatically each year. If you spoke about nutrition 100 years ago, it was about feeding people. If you speak about nutrition today, it is to feed the people with fewer calories. The vision has to evolve over time."

 

 

 

 

 

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