28 Jun 2016 Nestlé outsider appointed as new CEO of world’s largest food company

Nestlé has named a successor to CEO Paul Bulcke – in a surprise move that hands the reins of the world’s biggest food company to an outsider for the first time in nearly a century.

Ulf Mark Schneider Schneider, 50, (above) will join from health-care provider Fresenius, where he has been CEO since 2003. He will join on Sept 1 and start as CEO on Jan 1 after “an introductory period”, the maker of KitKat chocolate bars and Nespresso coffee said.

The decision to hand the reins to Schneider, whose background is in the medical industry, supports Nestlé’s goal to move beyond its roots and redefine itself as a scientifically-driven nutrition and health company.

Over the past five years, as packaged-food makers have been pilloried for contributing to a growing obesity crisis, Nestlé has invested heavily in its health-science subsidiary, which seeks to commercialise discoveries made by its research arm in areas like metabolic health and Alzheimer’s disease.

“This sends a huge message for the strategic direction of Nestlé over the next 10-plus years,” James Targett, an analyst at Berenberg, said. Nestlé also said it would integrate the health-science unit and a separate skin-health business so that both report directly to the CEO starting next year.

In tapping Schneider, Nestlé spurned three internal candidates: Chris Johnson, who runs the company’s cost-efficiency program; Laurent Freixe, who heads the Americas business; and Wan Ling Martello, the former finance chief who took over Nestlé’s struggling Asia, Oceania and Africa region last year.

Nestlé last chose an outsider as CEO in 1922 and has since preferred to spend years grooming management for the top job.

Bulcke has been under pressure to find new areas of growth as he enters the home stretch of a tenure that started in 2008. The 61-year-old CEO, who’s been with Nestlé since he started as a management trainee in 1979, has been seeking to reduce the company’s reliance on the growth-challenged food industry.

Schneider’s appointment could signal a push for acquisitions to expand Nestlé’s health-science and skin health units, Targett said, as the executive is “known as a bit of an M&A junkie”.

Fresenius made more than a dozen acquisitions under Schneider, and it’s the leading bidder to acquire Pfizer’s pumps and devices business, people with knowledge of the matter said earlier this month.

Bulcke will succeed Peter Brabeck-Letmathe as chairman at Nestlé’s next annual general meeting in April 2017, the company also said. Source: Bloomberg