Investor Plans To Shake Things Up At Nestle

Third Point, a U.S. based hedge fund, has recently purchased a 1.3 percent stake in food conglomerate, Nestlé. Known for convenience foods such as Stouffer’s and Toll House, the manufacturer has been struggling to produce market growth. This comes as consumers have shifted their focus to locally sourced, healthier food choices.

Nestlé CEO, Mark Schneider, recently came to the corporation in January of this year. His background has been in health care management, which may explain the new found focus of the enterprise to offer healthier options to customers. Nestlé has been shedding unnecessary additives from their ingredient’s list and looking to make over their image, nutrition being at the forefront.

Part of this restructuring is the sale of the confectionary side of Nestlé. Long known for their treats, such as Butterfingers, Nerds, and Raisinets, they are revamping their image and their food offerings. Having recently purchased a minority interest in the direct to consumer distributor, Freshly, they are working hard to become a leader in healthy and sustainable food options.

Michelle Obama talks healthy food, nestle pays attention
Former first lady Michelle Obama, left, appears onstage at the Healthier American 2017 Summit in Washington. [Image by Pablo Martinez Monsivais/AP Images]

Daniel Loeb, the founder of Third Point, wants to see Nestlé further cut their losses and let go of any industries that keep them from their main focus of producing quality food. This has led to the recommendation that the 23 percent of shares the enterprise owns in L’Oréal should be sold. This comes after the Swiss company sold eight percent of their shares back to the cosmetic association in 2014.

Third Point founder discussion at DealBook Conference
Daniel Loeb participates in a discussion at the 2013 DealBook Conference. [Image by Larry Busacca/Getty Images]

The American investor has praised Dr. Schneider for his innovation and changes already implemented. However, they have been vocal that there needs to be a more aggressive plan in play to boost shares and strengthen the floundering company.

Already, Nestlé stock is on the rise with a four percent increase since the hedge fund announced it’s purchase of $3.5 billion in shares. This is the largest investment Third Point has made in it’s 20 years of business. It is expected that it will be a lucrative move.

With a focus on nutrition and higher quality products, the manufacturer is stepping up their game and changing industry standards. More changes are expected in the future, but they are presumed to be consistent with the healthy demands of an informed consumer.

[Featured Image by Erik S. Lesser/Getty Images]