With a long and consistent history of success, it may not have been apparent that Nestle SA was stumbling last year. But the fact that a new CEO was ushered in abruptly last August indicates the board of directors wanted something fixed fast.
Laurent Freixe replaced Mark Schneider as CEO last summer and became Nestle’s lead speaker at Friday’s Consumer Analyst Group of New York meeting. There has been some concern lately about performance of the North American business, so Steve Pressley, CEO of Zone Americas, also spoke.
Freixe touted the 2024 performance as “solid,” although sales dipped 1.8% to CHF 91,354 million and net profit slipped 2.9% to CHF 10,884 million. He called it “a year of transition for us.”
Then he explained some of the philosophical changes. “15 years ago, when I was heading Europe [he’s a 39-year veteran of the company] … everyone’s investment focus, including Nestle’s, was emerging markets. Arguing for Nestle to put more incremental resources into Europe was a lost battle.”
Without being explicit, it seems he’s going to change that. Freixe said the company needs to:
- Expand winners (he specified Kit Kat and Maggi brands)
- Scale big bets
- Build new growth platforms
- Address underperformers
Coffee and pet care are two global platforms he wants to strengthen. He wants to increase exposure to e-commerce, convenience stores and value retailers. Underperformers he mentioned were Wyeth in China, soluble (instant) coffee in Europe and frozen pizza and coffee creamers in the U.S.
Pressley chimed in with North American winners: Purina Pro Plan specialty/therapeutic dog foods and e-commerce in general. His big bet is the recent launch of espresso concentrate. And underperformers are frozen in general.
Frozen pizza brands, which lost some market share, were priced too high for the market, Pressley admitted, so their prices have been rolled back. A consolidation effort reduced the number of Stouffers frozen dinners and entrees, but that only resulted in lower sales. Now Stouffers is being encouraged to innovate and launch new products.
