Swiss giant Nestlé bucks history with new top dog

Analysts on Tuesday praised Nestlé's choice for its new chief executive, healthcare manager Ulf Mark Schneider, as the food giant took a further step in its bid to become a leader in nutrition.

Swiss giant Nestlé bucks history with new top dog
Schneider, 50, is a German-US national. Photo: Daniel Roland/AFP

Schneider, 50, will take over on January 1st, replacing outgoing chief Paul Bulcke who has been nominated to become the company's chairman.
In tapping Schneider for the post, Nestlé — based in Vevey — bucked its near century-long track-record of picking in-house candidates for its top job.
The last time the company selected an outsider as chief executive was in 1922, when banker Louis Dappels was brought in to reverse financial losses.
Nestlé said Schneider's selection points towards a shift in the company's strategy.
With concerns about rising obesity on all continents, the company that has long been associated with fattening packaged foods wants to get in front of a global pivot towards nutrition and health.
In announcing Schneider's hiring, the company's board “reconfirmed the long-term orientation for Nestlé as a Nutrition, Health and Wellness company,” a statement said.
Markets welcomed the move, as Nestlé's stock closed Tuesday up 3.31 percent at 73.45 Swiss francs ($74.80, 67.74 euros) on the Swiss exchange.

'New era'

Choosing Schneider, a German-US national who thrived as the head of the healthcare company Fresenius, was consistent with that strategy, the board said.
“Schneider will trigger a new era at Nestlé,” Bank Vontobel analyst Jean-Philippe Bertschy wrote.
The new chief's plans may include a “radical” streamlining of the company's product portfolio, especially in traditional areas like chocolate and US frozen foods, while pursuing new opportunities in the health sector, according to Bertschy.
“Nestlé is in need of fresh legs,” Jefferies analyst Martin Deboo said, according to the Bloomberg news agency. “Schneider's track record is exceptional.”
Schneider, who will begin at Nestlé for a transition period in September, said he was honoured to join “an iconic global company”.
“With consumers around the world taking a deeper interest in their personal health and wellbeing, Nestle's industry-leading global food and beverage business positions it well for advancing the vision of Nutrition, Health and Wellness,” he said in a statement.
In a study released this month, the UN-linked Global Nutrition Report said nearly two billion of the world's estimated seven billion people are either obese or overweight.
The World Health Organization has said that affordable, healthy snack options generated by private sector companies are crucial to long-term health on the planet.
Jon Cox, an analyst at Kepler Cheuvreux, said the hiring was a “positive and a clear signal” that Nestlé will “leverage nutrition and health into its food portfolio to drive growth.”
The later years of Bulcke's tenure saw turmoil, especially a damaging recall in India of Nestlé's massively popular Maggi noodles, which the government banned over lead levels.
An Indian court called that decision arbitrary and the noodles are back on the shelves, but the crisis has hurt Nestlé's position in a key Asian market.

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‘Unlimited resources’: Switzerland’s Nestle goes vegan

Swiss food giant Nestle, which has made billions with dairy products, said Monday it will host start-ups that want to develop vegetarian alternatives.

'Unlimited resources': Switzerland's Nestle goes vegan

Nestle could thus find itself at the forefront of a sector that has strong growth potential, an analyst commented.

It plans to open its research and development (R&D) centre in Konolfingen, Switzerland to “start-ups, students and scientists” a statement said.

In addition to testing sustainable dairy products, the group plans to encourage work on plant-based dairy alternatives, it added.

Chief executive Mark Schneider was quoted as saying that “innovation in milk products and plant-based dairy alternatives is core to Nestle's portfolio strategy.”

The group unveiled a vegetable-based milk that had already been developed with the process, and technical director Stefan Palzer told AFP it planned to focus on 100-200 such projects a year.

Jon Cox, an analyst at Kepler Cheuvreux, noted that while Nestle had missed some consumer trends in the past, it has now “taken something of a lead in the plant-based alternative market for food”.

And “given its pretty much unlimited resources, Nestle is going to come out one of the winners in the space,” Cox forecast in an e-mail.

Nestle said that “internal, external and mixed teams” would work at the R&D centre over six-month periods.

Nestle would provide “expertise and key equipment such as small to medium-scale production equipment to facilitate the rapid upscaling of products for a test launch in a retail environment,” it added.

The Swiss food giant has long been known for its dairy products, but faced a boycott in the 1970s for allegedly discouraging mothers in developing countries from breastfeeding even though it was cheaper and more nutritious than powdered formula.

On Monday, the group's statement also underscored that the research initiative was part of its commitment to help fight global warming.

“As a company, we have set ambitious climate goals. This is part of our promise to develop products that are good for you and good for the planet,” it said.