Nestlé, the world’s largest food company, has appointed Laurent Freixe as its new CEO following the sudden departure of Mark Schneider, a move that reflects the company’s recent struggles with underperformance. Nestlé announced Schneider’s exit late Thursday after a board meeting, ending his nearly eight-year tenure as the first outsider to lead the company in nearly a century. The decision to replace Schneider, who had previously expressed intentions to stay for the long term, caught many by surprise.

Laurent Freixe, a company veteran with almost 40 years at Nestlé, steps into the role with a clear vision: to refocus the company on organic growth rather than acquisitions. Freixe, a 62-year-old Frenchman, is regarded as a food industry insider with a vast network of connections within and beyond Nestlé. His extensive experience includes leading Nestlé’s European business during the global financial crisis and more recently, overseeing strong growth in Latin America.

Investors responded cautiously to the news, with Nestlé shares falling 1.8% on Friday, reflecting concerns over whether the company can meet its 2024 and 2025 targets under the new leadership. Some analysts worry that Freixe’s focus on sales growth could lead to a reduction in profit guidance, further unsettling investors.

Industry observers, however, see potential in Freixe’s traditional Nestlé background and his expertise in sales and marketing. Jean-Philippe Bertschy, an analyst at Bank Vontobel, noted that successful food companies like Lindt and Danone have thrived under leadership with strong marketing and sales acumen, suggesting that Freixe’s approach could help Nestlé regain its footing.

Freixe inherits a company facing significant challenges. Nestlé’s stock has underperformed compared to rivals like Danone and Unilever, losing 10.3% of its value so far in 2024. Analysts have criticized the company for relying too heavily on price increases, which have driven cash-strapped consumers to cheaper alternatives, leading to a decline in sales volumes.

As Freixe takes the helm, his immediate priority will be to rebuild market share and boost sales volumes in a tough market for consumer goods companies. “We have unparalleled strengths,” Freixe said on Friday, expressing confidence in Nestlé’s ability to strategically position itself for success. His leadership marks a return to Nestlé’s roots, with a renewed emphasis on understanding customer needs and behaviors, a strategy that could help the company navigate the challenges ahead and regain its competitive edge.

(Adapted from USNews.com)