Nestle Nutrition Unit Gets Third New Chief in Three Years
Nestle SA (NESN) said the head of its nutrition unit resigned a year after taking the job, resulting in the third change of leadership for the business since 2009.
Kurt Schmidt will give up the position in December, leaving for personal reasons and to pursue other opportunities, the Vevey, Switzerland-based food company said today in a statement. Luis Cantarell, 60, the chief executive officer of Nestle Health Science, will also manage the nutrition division, which is in the process of completing the $11.9 billion acquisition of Pfizer Inc.’s infant-nutrition unit.
The change caps a decade during which Nestle has repeatedly organized and reformed a business central to its strategy of being the world’s “leading nutrition, health and wellness” company. Annual sales growth of the nutrition unit has never met a long-term goal of 10 percent set six years ago. Its Jenny Craig weight-loss service has been suffering from weaker U.S. consumption, while Nestle failed to expand the PowerBar brand of performance nutrition products beyond the market of athletes.
“They’ve had problems with Jenny Craig, performance nutrition isn’t doing all that well and they’ll have to integrate Pfizer pretty soon, so Schmidt may have been under pressure,” said Jean-Philippe Bertschy, an analyst at Bank Vontobel in Zurich. “They may have wanted to get a veteran Nestle manager at the head of the business.”
Cantarell, who ran the nutrition unit from 2001 to 2005 and has worked more than three decades at Nestle, has experience of integrating acquisitions such as its Gerber baby-food business and has helped reshape Nestle’s business portfolio, for example by halting ice-cream production in Germany, Bertschy said. Cantarell will probably remain head of the nutrition unit for the coming two to three years, he said.
Schmidt took charge of the division last year when his predecessor, Nandu Nandkishore, a temporary replacement for Richard Laube, became head of Nestle’s business in Asia, Oceania, Africa and the Middle East. Schmidt had previously headed Nestle’s infant nutrition business in North America.
“It certainly hasn’t been easy sailing at Nestle’s nutrition business, and there has been a bit of a revolving door in terms of executives,” said Jon Cox, head of Swiss research at Kepler Capital Markets in Zurich. Cantarell “is a very, very safe pair of hands. He was a bit under-utilized at the health science business.”
The nutrition unit had a 6.6 percent increase in nine-month adjusted revenue, with total sales of 5.8 billion Swiss francs ($6.2 billion), the Swiss food company said earlier this month.
Nestle is putting the health science business and nutrition under the same manager two years after it decided to split them up. The Swiss company formed health science to develop products to treat chronic diseases and conditions such as obesity.
“There is bound to be closer coordination in terms of R&D efforts,’ Cox said. ‘‘I never understood why health science was ripped out of the nutrition division in the first place -- ultimately what is discovered and developed has to be levered back into nutrition and the rest of the group.’’
Nestle shares were unchanged at 59.65 francs at 2:09 p.m. in Zurich trading. The stock has gained about 10 percent this year, making the Swiss foodmaker Europe’s second-largest company by market value.
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