Shareholders Demand More Drastic Shifts at Nestlé
While Mr. Loeb’s stated interest is to increase returns to shareholders like himself — in a letter to Nestlé from his hedge fund, Third Point,
that Mr. Loeb made public on Sunday, he said that selling the L’Oréal stake would be a good first step to “dramatically improve both the growth profile and earnings of the company” — his actions were also likely inspired by these tectonic shifts in the way people eat and shop.
Ms. Weissman said the results of the cost-cutting that took place when the H. J. Heinz Company merged with the Kraft Foods
Group in 2015 have drawn interest to other big food companies, long regarded as dull by investors like Mr. Loeb.
The problem faced by Nestlé and other food giants is
that many of their traditional brands are under intense pressure not only because of changing popular tastes but also because of the way people discover and buy the foods they like.
Late on Sunday, the activist investor Daniel S. Loeb informed Nestlé
that he had amassed about $3.5 billion of its stock and would like to see the company make big changes.
This year, Kraft Heinz made a $143 billion run at Unilever, another large European food and consumer products company
And it is selling its United States confectionery business, which includes brands like Crunch
and Raisinets, as snack lovers continue to migrate away from sugary treats to things like flavored popcorn, coconut chips and other options perceived as healthier.
“Nestlé has fallen behind over the past decade in an environment where growth has slowed due to changes in people’s tastes
and shopping habits, as well as an influx of new competition from smaller, local brands,” Third Point wrote in its letter.
