Nestlé rejigs geographic structure

ZURICH: Nestlé SA, the world’s largest food company, is overhauling its geographic structure, creating new zones for North America and for Greater China.

The maker of Nescafe instant coffee and KitKat chocolate bars is also changing its executive board to align with the new structure, which takes effect from January.

Company veteran Chris Johnson, now head of Nestlé’s Asia, Oceania and sub-Saharan Africa zone (AOA), will retire from the executive board and be replaced by Remy Ejel, current head of Nestle’s Middle East and North Africa business.

Steve Presley, chairman and CEO of Nestlé USA, will join the executive board as CEO Zone North America, Nestlé’s biggest market with annual sales of 24.7 billion Swiss francs ($26.59 billion).

David Zhang, CEO of Nestlé’s food seasoning business Totole and business executive officer for food in Greater China, will join the board as the head of the Greater China business.

“With the new zone structure, we will significantly sharpen our geographic focus to drive sustained profitable growth everywhere we operate,” Nestlé’s CEO Mark Schneider said in a statement.

“This move will bring us closer to consumers and customers, unlock new business opportunities and enable us to be even more agile in a fast-moving consumer environment.”

The new five geographic zone structure does not include Nestlé Health Science and its capsule coffee operation Nespresso, which are managed globally.

Long-standing area executives Laurent Friexe will lead the newly-formed Latin America business, while Marco Settembri will lead Zone Europe.

Nestlé will report sales numbers of the new zone structure for the first time on April 21.

Jon Cox, an analyst at Kepler Cheuvreux, said the changes were sensible because of the enormous size of Nestle’s business, which had been previously divided into three zones globally.

“It makes sense to break out North America with the US as its biggest market, and China, which is a strategically important region.”