"The financial and economic crisis has presented Europe with existential questions"

The executive vice president, Zone Director for Europe at Nestlé on leading across different countries and mentalities


You joined Nestlé in 1986. What is it about this particular company that has kept your interest for this amount of time?

Nestlé offers the unique opportunity to work for a truly global company with very strong roots in most countries and with a respect for different cultures. Nestlé is a company focussed on the long-term, a company where people are more important than processes, a leader in nutrition, health and wellness, offering the possibility of multiple functional and geographical experiences, a company with very strong values to which I fully identify and I can easily embrace.

Above: Laurent Freixe in the Main Session on Translating Ethical Values into Economic Value at the European Communication Summit 2013.

Proficient in several languages, you have worked for Nestlé in several different locations in Europe: France, Hungary and Spain. What do you enjoy most about this kind of international career?

The unique chance to discover very different geographies, cultures and the diversity of our European heritage, whilst developing the presence of our company for the benefit of our local people, consumers and suppliers. One should not underestimate the efforts and investments done by Nestlé to promote a strong business ethic and train and develop our employees in the long term. Working in all these countries has been a new adventure every time.

In your current position, you have pan-European responsibility. What kind of challenges do you face in your work when faced with the many different cultures and mentalities present in such a diverse region?

The strength of Nestlé in Europe is our alignment behind a common agenda, with priorities defined centrally every year. At the same time it is critical to stay locally relevant, and to embrace every country’s own reality. The local markets are in charge of the adaptation to the local environment and they are in charge of the local execution. A strong central vision helps our markets make the right choices and leverage our strength and footprint as a global player while being intimately connected to the local environment.

Today’s European context is not an easy one. How should Europe face the current financial and economic crisis?

It is true that the financial and economic crisis has presented Europe with existential questions. Also, our ageing society, growing unemployment and the increasingly limited availability of natural resources challenge existing paradigms. But every crisis is an invitation to fundamentally rethink our ways of working. As a priority, we need to agree on the concrete long term targets, objectives and the reforms necessary to encourage economic and social development. In that sense, I strongly defend the Commission’s EU 2020 vision of smart, sustainable and inclusive growth as a starting point. This is a vision which I am convinced the rest of the world will embrace sooner or later. I am also convinced that the answer to the crisis should not come from policy makers alone. We need an approach that involves all of society, including business, and the competitiveness of our industries should be at the forefront, as there is no sustainable development without competitiveness.

How can large companies find a way of growing in this climate?

First and foremost you must have the conviction that you can generate growth in Europe. At Nestlé, we have not written off Europe. The best sign of it is our historically high level of investments in production capacities, but also research and development and in building the capabilities of our people. Last but not least, by investing behind our brands, which we roll out first in Europe then across the globe. One of the best recent examples of this is Nescafé Dolce Gusto, first launched in Europe, now present in every single European market and going global.

And what messages should they be communicating at this difficult time from your point of view?

I will tell you what I believe is right for Nestlé. Our goal is to generate growth, in a sustainable and profitable way. Sustainable growth implies a long term vision including responsible sourcing and specific actions to further reduce our environmental impact and it promotes nutrition, health and wellness through adequate product propositions. As a result of our investments, we further generate direct employment in Europe, increasing our workforce by two to three per cent per year in recent years. Growth has to be inclusive and socially responsible. I think in particular of the dramatic development of youth unemployment in Europe. We have a role to play in addressing the issue and we are putting plans in place across Europe to contribute helping young people be better prepared to enter the professional world.

What would you say have been the major changes that have took place in the company during your time there?

Nestlé has undergone a tremendous strategic transformation from a food and beverage company to be the leader in nutrition, health and wellness. This is the foundation of our promise Good Food, Good Life, which puts nutrition at the centre of everything we do. It is this strategy that differentiates us from our competitors, that differentiates our brands. Talking about Europe, clearly the environment in which we operate has become more challenging and more complex, in different aspects. Let me give you three examples. The impact of the economic crisis in Europe is very severe and as a result, business and consumer confidence are weak and the rise of long term unemployment is worsening poverty and inequality. I also believe the competitive intensity is stronger today, being it against direct competitors or with retailer brands, as all stakeholders fight for a share of a pie which is not extendable. Finally, linked to the development of internet and social media, our relationship with our consumers and other stakeholders has shifted. This drives companies like ours to manage a direct relationship with our consumers, 24/7. Our strength is to be able to operate successfully in this new reality.

At this year’s European Communication Summit in Brussels, you will take part in a main session exploring how business can translate their ethical values into economic value. How would you describe the evolution of Nestlé’s approach to business ethics?

As a company, we are part of society. We therefore not only have to carry out our business but also assume our responsibilities towards society at large. Indeed, we believe that for a business to be successful in the long term it has to create value simultaneously for its shareholders and for society. This is what we call “creating shared value”. In this context, we are focusing our efforts on nutrition, water, rural development and, specifically in Europe, youth employment. There are challenges in the world such as sustainable development, the environment and public health. These problems are complex. And yes, sometimes our industry is singled out. But I am convinced that we are part of the solution. Nestlé is a committed company and takes its responsibilities very seriously.

You mention creating shared value: Nestlé was an early adopter of this concept and a whole section of your website is devoted to it. Could you give us some background to Nestlé’s involvement with this approach to business?

As I said before, we believe we can make an important contribution to society by going a step beyond corporate social responsibility to create value through our core business for both our shareholders and society. In a global context where close to one billion people suffer from malnutrition on the one hand, and on the other hand where 1.5 billion people are obese or overweight, it is clear that a good nutrition is key and Nestlé has a role to play. We can contribute through offering the tastiest and healthiest options to consumers at every stage of their life. We promote nutrition education at schools across 64 countries. We provide 150 billion portions of our products supplemented in micro-nutrients to help reduce prevailing deficiencies in developing countries (Iron, Zinc, Iodine, and Vitamin D). We invest heavily in research development in the areas of maternal and infant nutrition, clinical nutrition and health sciences. Our global efforts in the area of sustainability are increasingly being recognised by external stakeholders. For example, Nestlé continues to be the only infant food manufacturer to be included in the responsible investment index of the London Stock Exchange, FTSE4Good. Oxfam, whose critical view of the food industry as a whole we take very seriously, has just ranked Nestlé first in the industry for its social and environmental policies. Furthermore, a new index measuring people’s access to nutrition, ATNI, has ranked us among the first along with two European competitors.

Last year, you took part in the Women’s Forum For The Economy and Society, where you discussed the widening poverty gap in global society. What is your own interest in this problem, and to what extent is Nestlé involved in seeking solutions for this problem?

We have to be aware that challenges related to more equitable growth will increase in line with demographic growth and therefore we will have to redouble our efforts to address the gaps. The first thing we can do is to create quality jobs. We do this through consistent industrial investment, in stable but also in more challenging times. In addition, a company like Nestlé has a significant multiplying income generating effect up and down its supply chain. For instance, we work directly with 690,000 farmers worldwide and, as such, provide them with a regular income, give them training and technical assistance to increase their yields and create partnerships to improve their access to education, water and sanitation. Furthermore, we can help by providing consumers with high-quality, nutritious food products according to their needs. To give a practical example: 51 per cent of Pakistani children suffer from iron deficiency. Nido Bunyad, affordable powdered milk with added iron, provides 42 per cent of the daily requirement in one serving. In 2011, we reached 350 000 mothers with iron deficiency awareness messages and tips on how to treat it. 

You are very visible as a figurehead for Nestlé – with videos on YouTube, appearances at conferences, and presence on the web. Do you think it is important for someone in your position to be visible and vocal in today’s business landscape?

Consumers are increasingly interested in getting to know the companies that stand behind the products and brands they buy. Transparency should not be a lip service but means that we have to communicate openly and consistently with the public. And at Nestlé, we do that on various platforms.  You already mentioned some and there are many more like our various reports, websites, social media channels, blogs etc. I see it as a part of my role to inform the public about our activities and, indeed, we have a lot to share.

 

Laurent Freixe

Laurent Freixe has been chief executive officer of Nestlé Europe since November 2008.Born in Paris, France, Laurent Freixe joined Nestlé in France in 1986. From then until1999, he held different positions with increasing responsibilities in the field of sales and marketing. In 1999, he became the head of the nutrition division of Nestlé France; in 2003 he was appointed chief executive officer of Nestlé Hungary, and in 2007 he was appointed to the same postion at Nestlé Iberian Region. In November 2008, Laurent joined the Nestlé executive board as executive vice president with responsibility for Zone Europe, where he plays a role in leading the Nestlé Nutrition health and wellness mission, and making Nestlé Europe a profitable growth zone for the Group.