Nestle's Strategic Overhaul Amid Economic Pressures

Nestle is restructuring its senior leadership and operations as it lowers its sales forecast after weaker-than-expected growth. Amid rising costs and competitive pricing, new CEO Laurent Freixe plans to streamline operations, revamp marketing, and rebuild investor confidence in its core brands such as Nescafe and Kit-Kat.

Nestle is undergoing a significant restructuring of its senior leadership and operations, as announced on Thursday. The global food giant has lowered its full-year sales forecast following disappointing nine-month sales growth. The packaged food industry continues to grapple with increased costs, from oil to energy, exacerbated by the pandemic and geopolitical tensions.

Despite easing inflation, Nestle's rivals have slowed price hikes to attract cost-conscious consumers. Nestle, however, maintained higher prices longer, impacting its sales volumes and leading to the ousting of CEO Mark Schneider in August. New CEO Laurent Freixe aims to restore growth by consolidating geographical units and optimizing management structures.

Nestle faces the challenge of re-energizing innovation and marketing efforts. The company reported a modest 2% organic sales growth for 2024, below the projected 2.5% by analysts. With consumer demand weakening, especially in economically strained regions, Freixe's strategic changes aim to revive Nestle's market position amidst competitive dynamics.

(With inputs from agencies.)