Chairman and CEO of Nestle, Peter Brabeck-Letmathe, gestures during the annual shareholders meeting of the Swiss based giant food company in Lausanne.
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 Nestle, 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 Nestle up its own steep mountain. He took over as chief executive in 1997 in the midst of a growth spurt that saw Nestle 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 Nestle'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 Nestle'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 Nestle'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 Nestle'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 Nestle, 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 Nestle director for the past decade. "He's good at anticipating what might happen and seeing where the risks lurk."