Paul Bulcke has taken the helm at Nestlé during a turbulent time for the food industry. However, the world’s largest food company has, so far, weathered the storm unscathed. In fact, Katy Humphries writes, one of Bulcke’s biggest challenges will be to decide exactly what to do with the billion-dollar payout from the sale of Nestlé’s stake in US eye care company Alcon.
Taking the top job at the world’s largest food company may seem a daunting challenge, especially with the food industry facing the current difficulties of escalating costs and global recession.
Yet, even as many of Nestlé’s peers report declining profits in a constricting market place, the Swiss food giant has posted increased sales and profitability.
By sharpening its focus on health, wellbeing and nutrition and selling-off non-core operations Nestlé has successfully bucked the trend that has seen some of its rivals floundering.
Indeed, last month Nestlé predicted fiscal 2008’s organic growth would be similar to the previous year’s level of 7.4%. Nestle posted a 2007 net profit of CHF10.65bn (US$10.67bn) on sales of CHF107.55bn.
When Paul Bulcke became Nestlé’s chief executive officer yesterday (10 April) he was accurate in his assessment that Nestlé is in “superb shape”.
“I shall be taking the helm of a company that is in superb shape, a company that knows where it is going, and how to get there. Nestlé has enjoyed extraordinary growth under the leadership of Peter Brabeck,” he told an audience of shareholders at the company’s AGM in Lausanne.
“Even better, you are about to entrust me with a company where everything is in place, ready to continue and expand on what has been achieved thus far,” Bulcke continued.
As Bulcke expounded upon the virtues of following the path laid out by his predecessor and increasing the company’s emphasis on health and wellness it became clear that his motto can be summed up as “evolution not revolution”.
“I know, of course, that any new leader is seen as a person of change. Rest assured I have no intention of changing the group’s strategy,” he said. “We are heading in the right direction, one that will open the door to huge potential for development – for many years into the future. I have no plans to alter our chosen course.”
However, Bulcke did emphasise that there is “room for improvement” at the food conglomerate.
Defining his mission as CEO, Bulcke said that there was the potential to increase efficiency across the group’s operations, accelerate the implementation of decisions, make systems both more disciplined and more flexible and “keep our eyes open and firmly fixed on a changing world”.
The Belgian Bulcke can certainly be described as a “company man”. He joined Nestle as a marketing trainee in 1979 and spent 16 years in various jobs at Nestlé’s operations in Peru, Ecuador and Chile before returning to posts in Europe. He then moved on to the Americas, where he became chief of Nestlé’s Americas unit.
Before joining Nestlé, Bulcke studied commercial engineering, received a postgraduate degree in management and then worked as a financial analyst.
Becoming CEO Bulcke certainly has big shoes to fill following, as he does, in the footsteps of Brabeck – the man responsible for masterminding Nestlé’s health and nutrition plan.
Bulcke is now charged with executing this strategy. And, with Nestlé having sold part its stake in US eye care firm Alcon for US$11bn earlier this week, it is likely that another mega-acquisition similar to last year’s Gerber deal could well be on the cards.
“We intend to seize all opportunities to push in the direction of health and wellness internally and externally – and that means acquisitions,” Nestlé confirmed to just-food today.
While the company emphasised that it didn’t have anything in particular on its radar yet, Nestlé did not rule out the possibility of some extremely large acquisitions in the future.
“We have earmarked CHF2bn for acquisitions this year. This is the normal rhythm and we don’t have anything large on the horizon at the moment,” Nestlé commented.