SAO PAULO (Reuters) - Nestle SA's NESN.S chairman gave a vote of confidence to Chief Executive Mark Schneider 14 months into his tenure at the helm of the world's biggest packaged food company as it struggles to recover from a sixth straight year of slowing growth.
“He has moved a lot of things, and the board is happy with that,” Chairman Paul Bulcke told Reuters, in an interview on the sidelines of the World Economic Forum in Sao Paulo late on Wednesday. He said the choice of Schneider, a German who moved to Switzerland to become Nestle’s first external leader in nearly a century, was the right one.
“His first year was very good, he’s a man of action, he sees the need of change,” Bulcke said, adding that Schneider is also acting in a “balanced way.”
Since Schneider took the job, he has sold Nestle’s confectionery business in the United States, closed high-cost factories in Europe and focused on expansion into consumer health and high growth businesses, with the acquisition of vitamin maker Atrium Innovations.
Schneider reckons the Swiss group, which like other multinational food companies is grappling with slowing growth and greater competition, could buy and sell brands accounting for as much as 10 percent of its sales.
Bulcke said the board expects Schneider to stay as CEO for the long term, saying the company did not want “a CEO to stay for two or three years.”
Bulcke declined to comment on meetings with billionaire hedge fund manager Daniel Loeb, saying that Nestle “respects investors’ opinions.” Loeb’s hedge fund, Third Point, made a $3.5 billion investment in Nestle last June.
“He has strong opinions, but many of his suggestions are already in our program anyway,” Bulcke said. Third Point has demanded that Nestle move faster to overhaul its strategy and sell assets such as its stake in beauty business L’Oreal.
Nestlé is starting to see a recovery in Brazilian consumption after its harshest recession in decades, Bulcke said.
Brazil, where the food processing giant has more than 30 factories, is Nestle’s fourth largest market, after the United States, China and France. Bulcke said Nestle plans to continue investing in expansion in the country.
Reporting by Tatiana Bautzer; Editing by Christian Plumb and Leslie Adler
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