By Richa Naidu

LONDON (Reuters) - Nestle's plans under new CEO Laurent Freixe to restructure and sharpen its focus on its top brands were welcomed by investors, but executing a turnaround strategy against a backdrop of weak consumer demand will be a tough task.

After replacing Mark Schneider as CEO last month, Freixe set out plans on Thursday to revamp the executive board, revive Nestle's core 31 "billionaire brands", become price competitive again and win back market share through innovation and marketing.

He relayed his strategy to investors as Nestle - owner of brands including Nescafe, Kit Kat, Sanpellegrino and Purina pet food - cut its full-year sales outlook after weaker than expected nine-month organic sales growth.

Freixe told an investor call that Nestle is operating in "an environment characterized by softening consumer demand," particularly in North America and Europe, the company's biggest markets.

In the first nine months of the year, the Swiss-based group was only able to raise prices by 0.6% in North America, where its products sell at retailers from Walmart to Kroger.

In Europe, grocers are becoming harder to negotiate with and several products were taken off shelves in the third quarter, the company said.

"Freixe clearly has his work cut out to improve these weak

trends," Bernstein analyst Callum Elliott said. "Is this weakness really about executional struggles for Nestle... or are these growth challenges just a reflection of the weak growth backdrop in Nestle’s categories and an ongoing strategic dilemma facing the world's biggest food company?"

It has been a tumultuous two years for the industry as the end of the Covid-19 pandemic triggered a supply chain crunch and sky-high commodities prices followed by soaring energy prices after Russia invaded Ukraine, and disruptions due to attacks on container ships in the Red Sea.

Since the start of 2022, when Schneider split Nestle into five geographical regions in what it called a market-led approach, shares in Nestle have fallen by about a third. Freixe will now cut the number of regions to three to simplify the structure.

"Freixe came across well and made the right noises," Barclays analyst Warren Ackerman said. "However, U.S., Europe and Latin America are under pressure, so this is not an easy backdrop to execute a turnaround."

'HE'S A LIFER'

Schneider was ousted from Nestle in August with little notice after several straight quarters of weak sales volume growth, with total revenue propped up by high pricing to cover rising costs. The group started cutting back on marketing and innovation, despite investor anxiety over doing so.