Nestlé, the world’s largest food company, has announced significant changes to its leadership and organizational structure in response to slowing sales growth. The restructuring will reduce the size of its executive board and merge several regional units, including combining its Latin America and North America operations and merging its Greater China segment with its Asia, Oceania, and Africa zone.
Laurent Freixe, who became CEO in September, emphasized that the overhaul aims to simplify the company’s operations, speed up decision-making, and bolster global initiatives. “A leaner Executive Board structure and closer collaboration of the leadership team at headquarters will increase simplicity and strengthen momentum,” Freixe said.
This strategic shift comes as Nestlé cut its full-year growth forecast to 2%, down from a previous estimate of 3%, amid sluggish consumer demand. If realized, this would mark the company’s slowest growth since at least 2000.
The company’s North American segment, which accounts for over a quarter of its revenue, has been particularly hard hit. Organic growth in the region declined by 0.3% in the first nine months of the year, with Nestlé losing market share in frozen pizza and coffee creamers while facing stiff competition in frozen food. In response, Freixe stated that Nestlé will offer more discounts and reduce prices to attract cost-conscious shoppers.
Freixe’s swift action in overhauling the company’s structure underscores his commitment to addressing challenges head-on. Nestlé is also ramping up investment in its core portfolio, launching new products to align with consumer trends, and reviewing its portfolio, potentially signalling further divestitures of non-core businesses.
As Nestlé navigates a tough market environment, Freixe’s leadership will be critical in steering the company back to stronger growth amid rising competition and weakening demand.