Nestle's New CEO Freixe Takes Over to Fix the $100 Billion Food Giant's Struggles and 19% Stock Drop

Freixe's plan prioritizes steady growth to restore Nestle's profitability and investor confidence.

By Thea Felicity

Nov 14 2024, 12:03 PM EST

FRANCE-FOOD-INDUSTRY-HEALTH — This photograph taken on September 15, 2022, shows a view of the entrance of the factory of the Buitoni group, with the logos of Nestle and Buitoni, in Caudry, northern France. - The food industry group Nestle will make an announcement on the future of the site on September 15, 2022. DENIS CHARLET/AFP via Getty Images

This year, Nestle saw shopper rejections, stock decline, and a massive financial drop as former CEO Schneider stepped down. Looking ahead, new CEO Laurent Freixe will be taking the lead to recover the giant food company.

Freixe, at this time, is facing the $100 billion food giant at a critical as the company struggles to meet financial targets and meet internal dissatisfaction with its previous leadership.

The new CEO is already setting a new course and the first move was to cut Nestle's 2024 sales forecast and shift toward a slow but steady approach to growth, Bloomberg reported. This earned him strong support from not just Nestle's management, but also investors.

Nestle's Challenges

Currently, Nestle faces an uncertain economic backdrop as well as shifting customer behavior. Alongside inflation and rising commodity costs, especially cocoa, it hit where it hurts the most: profitability.

However, a huge part of Nestle's problem is the growth of weight loss medications like Ozempic, which reduces food consumption and consumer demand in the food industry. Only less than half of Nestle's regular portfolio is considered healthy and while the company has introduced products to target these consumer needs, it has yet to hit the market surge due to its prices.

But Freixe has knowledge of Nestle's operations that gives him an edge having worked at the company for several years. This insider status is beneficial while he looks to implement his plans. Rather than reducing the company's footprint, Freixe's strategy is to reshape its core business, which is unlike what previous CEO Shneider did which turned investors against him.

So far, Freixe's leadership is showing signs of progress by regaining investor confidence, especially after the company shares dropped 19% this year. He acknowledges that Nestle may never be the fastest-growing company, but his goal is to make it more predictable and stable in the long run, like his recent Formula 1 deal, according to Reuters.

Ultimately, Freixe aims to bring Nestle back on track by capitalizing on its strengths and addressing its weaknesses. Investors and industry observers will be watching closely as Freixe peels off his vision in the coming months.