Nestlé's Quick

GRAHAM TROTT FOR TIME
Brabeck voted the best-looking Swiss manager by Cash magazine readers at his headquarters in Vevey

The Matterhorn, Switzerland's best-known mountain, is also one of its hardest to climb, requiring peak fitness and experience using crampons and ropes at high altitudes. That didn't deter Peter Brabeck-Letmathe, 58, the chief executive of Nestlé, who has been mountaineering in the Alps since he was a child. He fulfilled a lifelong ambition last summer by reaching the 14,692-ft. summit. "It was just perfect," he says, his eyes sparkling at the memory.

The pleasure may have been greater because it was Brabeck's second try. Two years ago, he was within half an hour of the top when it began to snow heavily. To the surprise of his guide, Brabeck insisted on turning back. Even though he says his life wasn't in danger, "the risk was too high for the responsibility I have."

Ambitious, persistent but cautious: those characteristics are also Brabeck hallmarks as he attempts to lead Nestlé up its own steep mountain. He took over as chief executive in 1997 in the midst of a growth spurt that saw Nestlé double its sales, to $60 billion, in a decade and cement its position as the world's largest food company. With brands that include Stouffer's frozen dinners, Perrier and Pellegrino water, Nescafe coffee, Friskies cat food, Carnation milk, Buitoni pasta and After Eight chocolate mints, it's the leader in hundreds of product categories worldwide. But Brabeck isn't satisfied. "The most important role I have in this organization is fighting against complacency," he says. His overriding goal: to double Nestlé's sales once again, this time more cost efficiently.

Brabeck won't put a date on his goal, but he's moving quickly. He has ratcheted up internal growth targets and spent about $15 billion on acquisitions in the past two years, mainly in the U.S., which now accounts for about 25% of Nestlé's sales. He has gobbled up companies including Dreyer's ice cream, Chef America and, biggest of all, the pet-food company Ralston Purina. Some analysts have questioned whether Brabeck is paying too much for his conquests and taking on too much debt amid a global slump that is lingering longer than expected. But at the same time, Brabeck has moved to boost profitability by closing dozens of creaky factories, ditching low-margin operations such as cocoa-and tomato-processing plants and improving productivity. Under his leadership, the company has cut manufacturing costs by $2.8 billion, and more savings are promised.

Behind the scenes, Brabeck is working to reshape Nestlé's traditional decentralized management. He wants to replace the jumble of conflicting practices within the company's far-flung divisions in areas from accounting to purchasing with a unified system aimed at better leveraging Nestlé's worldwide scale.

It's typical of Brabeck that these moves, while significant, aren't billed as any kind of revolution. Brabeck has spent his entire professional life at Nestlé, working his way up from lowly ice-cream salesman, and he's respectful of the 136-year-old company's traditions. Just as in the mountains, he moves with care. "Peter Brabeck lives life to the full, but he's circumspect," says Vreni Spoerry, 64, a nonexecutive Nestlé director for the past decade. "He's good at anticipating what might happen and seeing where the risks lurk."

In Nestlé's case, the risks lurk literally everywhere. The company dates back to 1867 when Henri Nestlé started selling a cereal he had invented for infants and is still based in his hometown, Vevey, Switzerland, on Lake Geneva. But it has long outgrown its Swiss roots and is today perhaps the most multinational of multinationals. Its products are available in almost every nation in the world, and its executive board is made up of two Americans, two Austrians, a Briton, a Dutchman, a German, a Mexican, two Spaniards and a Swede. Yet its corporate culture remains firmly grounded in the Swiss tradition, favoring modesty and consensual change over American-style brashness. Joe Weller, 57, the head of Nestlé USA, calls it a "global company with a Germanic personality." And Brabeck nurtures "the Nestlé spirit," even co-writing a nine-page brochure that tries to explain it. "Nestlé people do not show off" is one definition. Another: "Nestlé is skeptical of short-term fads and self-appointed gurus."

The result is that for all his ambition to usher in a new era of growth, Brabeck is not about to follow the radical and financially successful example of one of Nestlé's main rivals, the Anglo-Dutch Unilever group. Unilever has taken a machete to its operations over the past three years, cutting the number of its brands by half to focus on 400 key products and shutting 83 of its 250 manufacturing facilities. Those efforts have widened its operating margins by 45%, and its earnings per share were up 27% last year, despite the sluggish economy. During Brabeck's tenure, Nestlé has closed 156 factories, but it has acquired or opened 183 new ones, increasing the total to 516. And it continues to nurture some 8,000 product brands. That's about the same number as when Brabeck became CEO, although he has been putting more emphasis on the company's six global brands, including Nescafe and Nestlé itself, which account for about 70% of sales.