In a decisive move, Nestlé’s chief executive Laurent Freixe has initiated a thorough restructuring of the company’s operations and executive leadership to create a more “leaner” organisation. This strategic overhaul comes as the multinational giant adjusts its growth projections following weaker-than-anticipated sales results.
Nestlé, a prominent player in the Fast-Moving Consumer Goods (FMCG) sector, experienced a modest 2% increase in underlying sales over the first nine months of the year. Consequently, the company lowered its full-year growth expectations to 2%, revising its prior forecast of at least 3%—a reduction from an earlier estimate of 4%. This adjustment follows a series of price hikes implemented by the company.
As part of his inaugural strategic initiative, Freixe, who assumed the role of CEO last month, has announced significant organisational changes. These include the merger of Zone Latin America with Zone North America and the integration of the Greater China Region into Zone Asia, Oceania and Africa. Additionally, there have been substantial modifications within the senior leadership framework.
Freixe has articulated that these organisational shifts are designed to streamline the executive board, thereby increasing simplicity and enhancing the speed of decision-making processes. He asserted, “All the leaders of key units driving our performance and our transformation will now report directly to me.”
Significantly, Freixe emphasised a renewed prioritisation on consumer and customer engagement, alongside intensifying efforts in brand investment and innovation. This approach aims to boost market share and expedite performance metrics. Furthermore, Freixe underscored the importance of Nestlé’s ongoing digital transformation, aiming to evolve into a “real-time, end-to-end connected, data- and AI-powered organisation.”
Addressing the Financial Times, Freixe maintained, “Nestlé is not broken, Nestlé is up and running. And we will make sure that all this potential is realised going forward.” His appointment follows the departure of former CEO Mark Schneider, who helmed the company for eight years. In July, Nestlé had already adjusted its full-year 2024 forecast due to faster-than-anticipated price reductions.
Laurent Freixe’s decisive actions signal a clear intent to refine and optimise Nestlé’s operational strategies, ensuring the company is well-equipped for future growth. The focus on unifying global zones and leveraging digital transformation reflects a forward-thinking approach aimed at navigating the evolving market dynamics.
