Nestle's leadership troubles overshadow a broader malaise

Swiss food giant Nestle, roiled by the sudden ouster of its CEO, faces a stern challenge, with investors and analysts urging it to slim down in a tough consumer market as rivals cut costs and even break up to improve their performance.

- JOHN REVILL OLIVER HIRT

The world’s largest consumer goods group installed Philipp Navratil as its new boss this week after firing Laurent Freixe for hiding a relationship with a subordinate, throwing the company into its biggest leadership crisis in decades.

The dramatic move following allegations of favouritism overshadows a wider malaise. Sales growth has stalled, the company’s shares have lost 40% since 2022 and costs have ballooned. Debt levels have climbed past those of rivals such as Unilever.

Now Nestle is hinting at a leaner future, as investors call for a slimmer product portfolio than the 2,000-strong one that ranges from Purina pet food to Nescafe coffee and KitKat chocolate bars, as well as a smaller payroll and cost discipline.

Nestle did not respond to a Reuters request for comment for this article.

The company’s Chief Financial Officer Anna Manz, speaking to investors on Wednesday, cited the 49-year-old Navratil’s ability to propel growth while “driving simplification across the organisation” in his previous job leading Nespresso.