Whenever former managers like Peter Brabeck make negative comments about their company, one should look at the cold, hard facts.

Fact 1: The decline of Nestlé began with the appointment of Ulf Mark Schneider as CEO at the end of 2016. The person responsible for this appointment: the outgoing Chairman of the Board, Peter Brabeck. Ulf Mark Schneider embarked on a massive shopping spree that increased Nestlé’s debt from CHF 23 billion to CHF 63 billion. Meanwhile, revenue stagnated at around 90 billion. In 2024, Schneider was removed in an emergency move by Brabeck’s successor.

Fact 2: Schneider was replaced by Laurent Freixe, an old buddy of Brabeck’s. According to the Code of Conduct, Freixe should no longer have been working at Nestlé at all, as he had a relationship with a direct subordinate while in a senior management position. It would have been up to Brabeck to dismiss his buddy. Unfortunately, as CEO, Freixe did exactly the same thing again: instead of focusing on getting Nestlé back on track, he entered into another relationship with a direct subordinate and clumsily promoted her to Marketing Chief of South America (even though she spoke neither Spanish nor Portuguese). He was fired. The reputational damage was substantial.

Fact 3: For years, Nestlé has been completely bureaucratic, immobile, and complacent. Since Nespresso, there has been almost no major breakthrough. Only now, with the appointment of Philipp Navratil, is momentum returning to a company that was poorly managed for a long time—not least under and because of Peter Brabeck. Whether the company achieves a turnaround remains to be seen in two to three years. One could certainly view Brabeck’s criticism of his former firm as a positive indicator.

Full Disclosure: I was invested in Nestlé from 1991 to 2022; it was my second-largest position.