SWITZERLAND – Nestlé has confirmed its commitment to retaining its Health Science unit despite recent speculation following the announcement of a change in leadership at the world’s largest food company.
In an interview with Swiss newspaper NZZ am Sonntag, Nestlé Chairman Paul Bulcke emphasized that the Health Science division remains a crucial part of the company’s future strategy, describing the field as “promising, with benefits for society.”
This announcement comes in the wake of the news that Mark Schneider will step down as CEO next month after nearly eight years at the helm.
Laurent Freixe, a 40-year Nestlé veteran and head of its Latin American business, will assume the role of CEO on September 1.
Freixe’s extensive experience within the company has prompted analysts to speculate about potential changes under his leadership, including a possible review of the Health Science unit.
However, Bulcke’s statements make it clear that Nestlé plans to keep the Health Science division, which was launched in 2011 and includes products in medical nutrition, pharmaceuticals, and active nutrition.
The division markets well-known brands such as Garden of Life vitamins and powders, as well as Nature’s Bounty supplements.
In Nestlé’s half-year 2024 financial results, the Health Science unit reported sales of Sfr3.2 billion (US$3.77 billion), reflecting a modest 0.1 percent year-on-year organic growth.
The company acknowledged challenges in this sector, citing negative growth in vitamins, minerals, and supplements due to supply constraints in the latter half of 2023.
Despite these setbacks, Nestlé indicated that its recovery plan is on track, with the business beginning to regain market share.
Laurent Freixe acknowledged the need for improvement within the Health Science division.
“Performance is okay, but I think it could be better. We need to raise our game there,” Freixe stated.
He emphasized the importance of gaining market share and improving execution, adding that engaging and mobilizing the entire organization will be key to achieving these goals.
The company recently adjusted its forecast for organic growth in 2024, lowering it from “around” 4 percent to “at least” 3 percent, despite a recovery in underlying volumes in the second quarter.
Additionally, Nestlé revised its earnings per share (EPS) guidance from a growth range of 6-10 percent year-on-year to a mid-single-digit range.
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