By Hallie Detrick
July 2, 2018

Daniel Loeb wants Nestle to stop resting on its laurels.

In a letter to Nestle’s top management on Sunday, the activist investor Loeb reiterated demands he made a year ago when he revealed his hedge fund’s $3 billion stake in the company—1.25% of all shares. He said that while some of the suggestions made by his hedge fund, Third Point, had been adopted, “the modest pace and magnitude of these changes suggest that Nestle feels satisfied with its position.” The letter and the newly launched accompanying website nestlenow.com accuses Nestle of not being as fast, aggressive, or strategic as it needs to be to deliver investor value in the current market.

Here’s what Loeb wants now.

Breakup

Loeb wants to see Nestle (nsrgy) broken up into three business units—beverage, nutrition, and grocery—and he wants each to have its own CEO, regional structure, and marketing function. He says this will streamline the company’s “overly complex” structure and will improve “focus, agility, and accountability” to help each part of the business perform better.

Spinoff

The letter identifies several struggling aspects of the business that should be abandoned and reinvested for the benefit of shareholders. Loeb wants Nestle to get rid of a large part of its 23% stake in L’Oreal, which he says doesn’t fit the company’s strategy. Other sectors on the chopping block include ice cream, frozen foods, and confectionary. These aspects of the business are tying up capital that Loeb wants to see re-invested elsewhere to maximize investor returns.

Management upgrade

According to Loeb, Nestle’s board is woefully lacking the experience and ambition necessary to direct the company. He says Chariman Paul Bulcke is too comfortable with the status quo, and the rest of the board members lack fresh ideas. He complains that “only 1 of 12 independent Nestlé directors…has fast-moving consumer goods experience,” and “zero directors have external food & beverage experience.” He therefore wants to see an external food and beverage expert added to the board.

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