Nestlé, the world’s largest food and beverage company, has been rocked by the sudden departure of its CEO, Laurent Freixe.
What started as a small, anonymous tip to an employee hotline has grown into a story that ultimately ended Freixe’s tenure after just a year in charge.
The Tip That Set Things in Motion
According to reports, the trouble began in the spring when someone used Nestlé’s internal “Speak Up” hotline to allege that Freixe, 63, was involved in a romantic relationship with a subordinate in the marketing department.
The hotline exists for employees to report “non-compliance concerns,” and Nestlé’s code of conduct requires staff to disclose any personal relationships that might create conflicts of interest.
Early Investigations and Denials
Shortly after the initial report, Nestlé Chairman Paul Bulcke received a letter detailing the alleged affair, though the author and exact contents remain unknown.
Company executives then reviewed Freixe’s communications with the marketing employee, who was also based at the Vevey headquarters in Switzerland.
An internal probe reportedly found no evidence of wrongdoing.
Both Freixe and the marketing executive denied being in a relationship to multiple Nestlé colleagues. By summer, it seemed the matter was fading from view.
Media Attention Revives the Story
The situation took a turn when the media began asking questions.
In late July, Zurich-based finance blog Inside Paradeplatz reported on the alleged relationship, highlighting the marketing executive’s career trajectory.
She joined Nestlé as a management trainee in the early 2000s, met Freixe in 2022, and was promoted to Vice President of Marketing for the Americas about 18 months later, a move Freixe likely approved.
He continued to deny any undisclosed relationship.
Escalation and External Investigation
Another report through the Speak Up hotline prompted Nestlé’s board to bring in outside investigators from law firm Bär & Karer.
They examined Freixe’s personal data, including texts and photos.
By the time the probe concluded, evidence of an intimate relationship had emerged.
Freixe attempted to maintain a sense of normalcy, joining his CFO on an investor roadshow across London, Frankfurt, and Zurich, and even requesting a spot at Barclays’ consumer-staples conference in Boston.
But colleagues noticed a change in his demeanor, hinting that the investigation might be more serious than publicly acknowledged.
The Decision to Terminate
On Monday, Nestlé announced Freixe’s termination.
Chairman Bulcke described the decision as necessary, emphasizing that Nestlé’s values and governance form the foundation of the company while thanking Freixe for his service.
Freixe’s Brief and Tumultuous Tenure
Freixe took over after Mark Schneider was ousted following criticism for continuing sales in Russia during the Ukraine invasion.
He sought to refocus Nestlé on core brands like Nescafé, KitKat, and Fancy Feast, while cutting costs to invest in promising products such as cold coffee.
Despite these efforts, global sales dropped 1.8% during his tenure, and Nestlé shares fell 17%, continuing a five-year decline amid rising production costs and price-sensitive consumers.
New Leadership in a Challenging Era
Freixe’s successor, Philipp Navratil, 49, faces a complex landscape.
Having joined Nestlé in 2001 as an internal auditor and most recently serving as CEO of Nespresso, he is seen as a “good Swiss compromise” between his predecessors, blending internal experience with a fresh perspective.
Navratil’s immediate priorities include slimming down the company, cutting costs, and boosting organic growth.
Analysts warn that while his appointment brings stability, the strategy reset could create a period of uncertainty.
Nestlé’s Recent Scandals Add Pressure
The leadership transition comes as Nestlé navigates a series of scandals.
Former CEO Bulcke faced harassment accusations, and whistleblower Yasmine Motarjemi claimed she was targeted after raising safety concerns about baby food, resulting in a $2.5 million settlement.
Motarjemi criticized Freixe’s ousting on LinkedIn, highlighting what she called the company’s hypocrisy.
Looking Ahead
As Nestlé enters this new chapter under Navratil, investors and employees alike are watching closely.
The company’s ability to refocus on its core brands, streamline operations, and restore investor confidence will be critical to shaping the next phase of its global dominance.