In a turbulent agri-food marketNestlé is looking for new impetus. And to do so, he’s counting on Laurent Freixe, the third Frenchman to head the Swiss behemoth, the world’s number one food company, after Maurice Paternot and Pierre Liotard-Vogt in the 1950s and 1960s.

Arrived on September 1st at the owner’s helm of KitKat, Purina, Nespresso, Nescafé, Maggi, Nesquik, Perrier and Vittel, the new strongman unveiled on Tuesday his recipes for reviving a group that has been in turmoil in recent months. This culminated in the ousting at the end of the summer of its Managing Director of 8 years, Mark Schneider.

Until 2022, the 100-billion-euro group was one of the champions of growth and profitability in a fast-changing consumer goods market. Since then, however, sales growth has slowed markedly, against a backdrop of sluggish consumer spending in Europe and much softer inflation (which penalizes companies that no longer raise prices). In recent months, the Group has twice revised its forecasts downwards, now expecting 2% for 2024, compared with 4% at the start of the year. The same applies to its profitability targets: its recurring operating margin (17.1% in 2023), announced as rising for fiscal 2024, is now expected to stagnate at 17%.

40% drop in market capitalization

To explain this slowdown, observers point to a lack of investment by the Group in its brands, in favor of a focus on margins. But also rather disappointing results in the specialized nutrition branch (Nestlé Health Science). A major growth driver identified by Mark Schneider, this activity posted the lowest margin of all Nestlé divisions (12%) in 2023. It was penalized by supply problems, as well as more or less successful acquisitions (vitamins, etc.). These cumulative under-performances worried investors, weighing on stock market performance. Since January 2022, the Group’s capitalization has fallen by 40%.

And with good reason. Alongside sluggish operating performance, consumer confidence in the giant of 2000 brands has been shaken by health issues. Admittedly, Nestlé has one of the lowest health incident rates in its history. But recent scandals have tarnished its image. The first of these was the salmonella contamination of Buitoni pizzas in 2022, which led to dozens of contaminations and the death of two children. The French subsidiary of the has been placed under investigation. This year, Nestlé, along with other bottlers, has also had to face up to challenges concerning the bottling conditions of its natural mineral waters (Perrier, Vittel…).

Finally, the group has come under attack over the nutritional profile of its product portfolio. Certainly since his arrival in 2017, the previous captain of Nestlé had already launched a vast project on the subject, renewing the equivalent of 20% of sales. But some are calling for this work to be taken a step further, by questioning the future of ice cream, frozen pizzas and ready-made meals within Nestlé.