(Adds details from letter)
By Svea Herbst-Bayliss
BOSTON, Jan 22 (Reuters) - Billionaire investor Daniel Loeb praised food group Nestle's chief, but is keeping up the pressure with demands that the company move faster to overhaul its strategy.
"We hope now that Dr. Schneider has completed his first year and there is new blood on the board, the company is able to move with greater alacrity," Loeb wrote about CEO Mark Schneider in a letter to his own investors. A copy was seen by Reuters.
Loeb said he wants the Swiss company to buy back more of its stock at a quicker pace and sell its stake in beauty business L'Oreal.
Loeb's hedge fund Third Point made a $3.5 billion investment in Nestle in June and has - for now - given Schneider, who became Nestle's first external leader in nearly a century when he took over as CEO a year ago, room to maneuver.
Schneider has taken positive steps including announcing plans to buy back as much as 20 billion Swiss francs ($20.8 billion) worth of stock and make portfolio adjustments, Loeb wrote.
But the influential investor said the company now has to make good on promises, including boosting its exposure in high-growth areas such as coffee, pet care, bottled water and nutrition while selling "ill-fitting businesses" more quickly.
It should also buy back shares more quickly before the price climbs, Loeb wrote, adding that there are better uses for the money currently tied up in its L'Oreal stake.
Loeb expressed some concern about why the company pushed more deeply into consumer healthcare with the purchase of Canadian vitamin maker Atrium Innovations and said he wants a better explanation of that move.
To date, Loeb has given Schneider a tentative thumbs up, but his patience may not last forever.
Famous for his sharply-worded letters to corporate chieftains, Loeb has helped push out bosses at Yahoo and Sotheby's. Activist investors have recently become quicker to push out chief executives who they think are not up to the job.
Loeb's Third Point Offshore fund returned 18.1 percent last year, largely as stock investment powered ahead.
Looking at the outlook for this year, Loeb said growth is unlikely to accelerate much more.
"While we remain optimistic about the trajectory of the economy and markets, we have weighed our positioning with an acute awareness of the risks," he said. ($1 = 0.9610 Swiss franc) (Reporting by Svea Herbst-Bayliss with additional reporting by Simon Jessop; editing by Chizu Nomiyama and G Crosse)