Nestle has dismissed chief executive Laurent Freixe after only a year due to an undisclosed workplace affair.
The move extends the management turmoil at the world’s biggest food company, which is known for its conservative corporate culture.
An investigation showed that Freixe had an undisclosed romantic relationship with a direct subordinate, according to a release late on Monday from the Swiss owner of Purina pet supplies and KitKat chocolate bars. It named Philipp Navratil, who heads the Nespresso coffee brand, as his replacement.
“This was a necessary decision,” chairman Paul Bulcke said in the statement. “Nestle’s values and governance are strong foundations of our company. I thank Laurent for his years of service.”
The abrupt change extends a period of turbulence in Nestle’s leadership. Freixe took over after the surprise ouster last year of Mark Schneider, who was let go due to sluggish performance during his almost eight-year tenure.
At the time, Freixe was seen as a safe pair of hands who would restore Nestle’s traditional strengths after Schneider – a rare outsider in the top job – had taken the company in new directions.
Vontobel analyst Jean-Philippe Bertschy said: “This comes at a sensitive juncture, as Nestle is already under the spotlight amid a negative news flow. Nestle should soon find calmer waters, as investors’ nerves have been tested for several months.”
Freixe is the latest of several consumer and retail company bosses to lose their jobs over workplace relationships in recent years.
McDonald’s dismissed then-CEO Steve Easterbrook in 2019 after he had a consensual relationship with an employee. This year, Kohl’s removed CEO Ashley Buchanan, who had directed millions of dollars of business to a romantic partner.
Freixe aimed to reignite growth and win over shoppers by boosting advertising spending and betting on fewer but bigger product initiatives. He also kicked off a strategic review of struggling vitamin brands and spun off Nestle’s waters business into a standalone unit.
However, he failed to regain investors’ trust, with Nestle shares declining 17 per cent under his tenure, compared with a roughly 5 per cent decline for rival Unilever.
Nestle’s sales volumes contracted 0.4 per cent in the second quarter.
New chief
Navratil, a company veteran of more than 20 years, joined the executive board at the start of this year. Before running Nespresso, he was senior vice-president and head of the Coffee Strategic Business Unit, where he was responsible for global strategy for the Nescafe brand and a licensing partnership with Starbucks.
“I fully embrace the company’s strategic direction, as well as the action plan in place to drive Nestle’s performance,” he said, according to Monday’s statement.
Now that business has stabilised, Navratil has the potential to accelerate long-term growth and look at portfolio restructurings such as an exit from lower-growth cereals and water, Bloomberg Intelligence’s Duncan Fox said in a note. His age of below 50 years signals that he could hold a 10-year-plus tenure, he said.
Another challenge for Nestle is the global trade friction prompted by US President Donald Trump’s tariffs. Freixe has often pointed to the fact that about 90 per cent of Nestle’s US-sold products are made domestically. One prominent exception is Nespresso capsules, which are exclusively produced in Switzerland and now face a 39 per cent tariff.
Nestle said its probe was overseen by Bulcke and the lead independent director, Pablo Isla, with the support of independent outside counsel.
