New reality winning in Zone AOA

Nestlé in AOA:
Winning in the
New Reality
Nandu Nandkishore
Executive Vice President
Zone AOA

Nestlé Investor Seminar, Shanghai
September 25th, 2012

2012 : The Year of the Dragon
 The Dragon symbolizes prosperity, power and
longevity

 Auspicious for :
o New Businesses
o Marriage
o Children (Dragon Baby Boom)

Example : Taiwan

1 September 25th, 2012 Nestlé Investor Seminar, Shanghai

Agenda

1. Introducing Zone AOA

2. Winning in The New Reality

3. Performance


The size and diversity of Zone AOA is a very big
opportunity for Nestlé

3 Continents
18 Markets / 166 countries*
153 Factories**
15 Time zones
Innumerable languages
76% of World’s population
All Major religions
Variety of cuisines / tastes
GDP: about 50% of world***

*Source: UN Statistical Division
**115 Active incl (+ 3 satellite factories) NN, NP, NPP, CPW; 27 NW; 8 Under Construction
***Source: IMF


China has the size of a continent, with provincial GDP
at the level of developing or developed countries

*China 20% of World’s Population but only 7% of World’s Agricultural Resources Sources: The Economist , Economist Intelligence Unit, CEIC, WTO


Zone AOA represents 76% of world’s population
7 of the top 10 most populous countries are from Zone AOA

#3: USA #9: Russia #1: China (1.3 bn)
(310 m) (143 m)
#10: Japan (127 m)

#7: Nigeria
(158 m) #4: Indonesia
(240 m)
#5: Brazil
(195 m)
#2: India (1.2 bn)
#6: Pakistan (174 m)
#8: Bangladesh (149 m)
Source:

United Nations Population Division, 2010 Revision


Most population growth will comes from AOA

Source : CIA World Factbook 2008


Zone AOA has the fastest greying population

Top 6 Today (Population aged 80+) 2050

 China (12 million) 99 million
 USA (9 million) 30 million
 India (6 million) 48 million
 Japan (5 million) 17 million
 Germany (3 million) -
 Russian Federation (3 million) -

Source : http://www.un.org/esa/population/publications/worldageing19502050/pdf/90chapteriv.pdf


Historically, China and India were the world’s largest
economies…..
Percentage of World GDP (last 1000 years) Sources: Angus Maddison (1000-1950), IMF (1980-2012)
100%

90%
All other
countries 22%
80%
Latin
70% America 8%

60%
USA 22%
50%

40%
Western
Europe 23%
30%

Japan 8%
20%
Africa 3%
India 2%
10%
China 11%
0%
1000 1500 1600 1700 1820 1870 1900 1950 1980 2012


Top 10 Economies by 2050 : 6 countries from Zone AOA
2000 2010 2020 2030 2040 2050
USA China
Japan India
Germany USA
UK Indonesia

France Nigeria

China Brazil

Italy Russia

Canada Japan

Spain Philippines

Brazil UK Source:
IMF, citigroup


GDP Growth 2010 - 2050 :
Top countries are all from Zone AOA
Top 10 countries by GDP* Growth Bottom 10 countries by GDP* Growth
(% YoY) : 2010 – 2050 (% YoY) : 2010 – 2050
Nigeria 8.5% Spain 2.0%
India 8.0% France 2.0%
Iraq 7.7% Sweden 1.9%
Bangladesh 7.5% Belgium 1.9%
Vietnam 7.5% Switzerland 1.9%
Philippines 7.3% Austria 1.8%
Mongolia 6.9% Netherlands 1.7%
Indonesia 6.8% Italy 1.7%
Sri Lanka 6.6% Germany 1.6%
Egypt 6.4% Japan 1.0% Source: citigroup (2010-2050)
* GDP measured in 2010 purchasing-power-parity USD


ASEAN Opportunity: world’s largest free trade area

A common market
for 3 billion people


Over half of population in Asia will be urbanized
by 2020 and in Africa by 2035
Percentage of Population Residing in Urban Areas
71.7 73
70.7 70.9
67.2
62.4 61.7
64.4
57.8
51.6 50.5 57.7

44.4
World
43.2
50.1 Asia
29.4 39.2
Oceania
17.5 Africa

14.4

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Sources: United Nations, Department of Economic and Social Affairs, Population Division


17 of the World’s 27 Megacities are in Zone AOA and
the top 5 Megacities are in Zone AOA as well
Top 5 Megacities are from Asia :
 Tokyo (34.5m)
 Guangzhou (25.8m) Tokyo
 Jakarta (25.3m)
 Seoul (25.3m)
 Shanghai (25.3m)
Guangzhou
Fastest-growing Megacities are from AOA :
 Karachi, Delhi, Dhaka, Guangzhou, Lagos
Jakarta
Challenges :
 Slums (1 bn. currently), homelessness, traffic congestion,
air pollution, unemployment, crime
Seoul

Ascent of the Roaring Giant : Africa

2.3 Trillion

2020


Africa’s workforce expected to be the largest by 2035
Size of the working-age population (Million)

Population of Africa (Jan 2011) = 1.02 bn Source:

McKinsey Global Institute


Halal Opportunity:
Majority of population with Halal dietary needs in AOA

 Majority of 1.5 billion
Muslims live in AOA

 Halal


Zone AOA has the Highest Prevalence
of Vitamin & Mineral Deficiency
Accumulative Mineral and Vitamin Deficiency

http://maplecroft.com/portfolio/mapping/maplecroft/


Digital Opportunity: AOA makes up 50% of Internet
population(China the largest)

Source : iResearch, Strangeloops,


500 million mobile phones in Africa in 2011
850 million expected by 2015

* China is currently the No.1 Mobile Phone
market with 750 million phones
http://www.penn-olson.com/wp-content/uploads/2011/06/china-social-media-landscape.jpg


The world will see strong population growth at lower
and upper income levels
8000
+400 m
7000
1069 Premium Opportunity
657
Number of persons, millions

6000
254 311
347 396 544
207
5000 367

1555
+1 bn
4000 2460
3441 Emerging Consumer
3000 Opportunity

2000
3402 >30,000
2897 22,000-30,000
1000 1914 14,000-22,000
3,000-14,000
0 < 3,000
1998
1 2008
2 2018
3
Sources: UN WIDER and World Bank (also for outlook on ecenomic growth 2008-2018): analysis Nestlé EIR


The Dynamics and Strengths of Local Competition

WAHAHA

TINGYI F&N

MENGNIU

YILI


Agenda



3. Performance


Vision AOA : Be the Growth Engine for the Future

 Capital Investments:
CHF 5 billion last 5 years

 Invest in R&D resources, People, Brand
Investment, GLOBE Support for
Emerging Markets

 AOA must lead the trends and act as
pilots/incubators : Premium, NHW
(Micronutrient deficiencies, Obesity, Ageing),
Local Innovations, Sustainability,
Environment, Digital, etc.

Grasping the HOT ZONE opportunity
Packaged Food &
Beverage per Capita in $ HOT ZONE COOL ZONE
3'500 Japan
Increased Prosperity
3'000 Increased Urbanisation
Oceania
Increased Competition
2'500

2'000

Israel
1'500

WARM
1'000
South Africa Turkey South Korea
ZONE
500 Maghreb NME Malaysia
Philippines CGR
CWAR Indochina
SAR NEAR
EAR Pakistan Indonesia GDP at PPP
0
0 5'000 10'000 15'000 20'000 25'000 30'000 35'000 per Capita in $


The “Big 5” in the Hot Zone :
Investing & Leading the trends

China South Asia ASEAN Africa Middle East
Challenges
• Local players • Aggressive competition • Agressive competition • People • Political instability
• Food safety focus • Local Sourcing • Competition for talent • Resources • Securing supplies
• Invest in people & capacity • Build distribution • PPP opportunity • Local Raw / Packaging • Multi-tier offer
• Innovation / Renovation • Innovation / Renovation • AFTA trade opportunity
Strategies
Accelerate PPP & CSV Defend and build brands Invest ahead of Demand Build Distribution
OOH Price Point Management Premiumisation People NHW External Growth


The Nestlé Strategic Roadmap to
Win in The New Reality


Nestlé in Zone AOA : Unmatched
geographic

Established Presence and Rich in History presence

Note : Dates based on Registration of Local Nestle Office and not registration of Nestle Brand trademark/ Distributor partnerships.


Multi-tier strategy with the right product portfolio Unmatched
product
and brand
portfolio

Premium

Mainstream

PPP

Bottom of the Pyramid

28 Nandu Nandkishore Zone AOA Presentation: Nestlé Investor Seminar, Shanghai

75 Halal Certified Factories Worldwide Unmatched
product
Whenever,
wherever,
with majority in Zone AOA and brand
portfolio
however

 Strict Company Halal Policy

 Nestlé Malaysia created the
Halal Centre of Excellence

 Estimated Halal Food Market
Value at 600bn USD

 Wide range of Nestlé products
catering to Halal dietary needs


7 Research Sites in Zone AOA Unmatched
research &
development
capability

R&D Beijing + NRC
R&D Sderot
NRC Tokyo
R&D India
R&D Shanghai
R&D Abidjan

R&D Singapore


Global Innovation Roll-out: Premiumization
Innovation

Premiumization with NESCAFE Dolce Gusto & renovation

Launched in 10 markets:
National City Focus E-Commerce
Japan ◎ ◎
S. Korea ◎ ◎
Espresso Cappuccino
Taiwan ◎ ◎
Singapore ◎ ◎
Hong Kong ◎
Malaysia ◎ ◎
Mocha Cappuccino Ice
Philippines ◎
UAE ◎
Qatar ◎
Kuwait ◎
Chai Tea Latte Macha Latte


Local Innovation Roll-out from Thailand: Innovation

Nestlé Peelable Ice Cream & renovation

 Launched in Thailand :
May 2010, in conjunction with the Eat Smart,
Play Hard campaign, endorsed by the
Thai Ministry of Public Health

 In 25 countries today :
 Z-AOA : 8 countries
 Z-AMS: 4 countries
 Z-EUR: 13 countries


MILO in one Zone AOA : Consumer
Unmatched
product

Consistency and Coherence Over Time communication and brand
portfolio

 Winning Formula

 Holistic Proposition

 PPP Focus

 Grassroot Sports &
Sampling


PPP (Popularly Positioned Products): Nutrition,
Emerging
markets and

Affordable Nutrition and Pleasure for Emerging Consumers Health and
Wellness
Popularly
Positioned
Products

Fortified: Price:
 Iron  PHP 23*
 Zinc (80g / 3 glasses)

 Iodine
 Vitamin A, C *Approx CHF 0.5


Nutrition in AOA : 2011 Highlights Nutrition,
Health and
Emerging
markets and
Popularly
Wellness Positioned
Products

• 91 billion servings fortified with key micronutrients
• Affordable fortified milks now available in more than 60 countries
• 1,460 Popularly Positioned Products
• Products continuously renovated for nutrition or health considerations, reducing salt,
fat and sugar levels
• Start Healthy Stay Healthy Promotes the early establishment of healthy eating habits
• Nestlé Healthy Kids programmes run in partnership with governments, academia, and
NGOs in over 20 countries reaching approx. 800,000 children.

Product Innovation and renovation

Ageing Population Opportunity: Nutrition,
Health and

Nutrition, Health and Wellness Wellness

Nestlé Senior Milk Powders (China) Nestlé Nutrition Pempal Active (Japan)

Product Description Product Description
•Specialized Senior nutrition addressing key health benefits •Target : Elderly with Sarcopenia* or at the risk of
(Heart, bone, optimal nutrition). Sarcopenia
•Achieving strong growth and accretive MC/OP1 to the group. •Nutrition : Protein 10g
Vitamin D 12.5μg
Consumer Insight Calcium 300mg
•“ Stay healthy and active, enables me to lead a full, golden life” •Package : 200kcal/125ml
•Price : 245 JPY (CHF 3)
*degenerative loss of skeletal muscle mass and strength associated with ageing


Out-of-home Opportunity in AOA: Out-of-home
consumption

“Creative Food & Beverage Solutions - Making More Possible for our Customers”

• Geographic and Channel expansion
• Dedicated Unique RTM
• Solutions Based Selling
• Tailor-made solutions for operators


Our brand availability Whenever,
wherever,
Whenever, wherever, however however


E-Commerce : Combined with Entertainment and Whenever,
Consumer
Consumer Relationship Marketing (Japan) wherever,
however
communication

 Coffee Systems, Coffee, Coffee
Creamers, Confectionery, Food,
Pet Food, Nestlé Nutrition,
Nestlé Professional

 TV Shopping

 Approx. 10% Sales Contribution by
2020


Our Regional Procurement and Manufacturing in Operational

ASEAN efficiency

2/3 Raw & Pack Material
Regionally Sourced
• Coffee • Paper
• Cocoa • Pulp
• Palm Oil • etc.
• Milk

Regionally
Manufactured
• Soluble Coffee • Dairy
• Creamer • Cereals
• Malt • etc.


Nestlé Continuous Excellence (NCE) Operational

plays a very important role in AOA efficiency

NCE :
100% factories
100% market supply chains

NCE beyond Operations
60% Finance
30% Sales
20% HR


Creating Shared Value
“For a company to be successful over
time and create value for shareholders, it
must also create value for society. ”

P. Brabeck-Letmathe P. Bulcke
Chairman – Nestlé S.A. CEO – Nestlé S.A.


Based on 300+ (60+ in AOA) partnerships with
governments, NGOs, universities


Responsible Dairy Farming:
Dairy District Model 2011
Dairy District Farmers
•Global: 422,700 farmers
(52% of our global fresh milk supply)
•AOA: 375,000 farmers
(35% of our AOA fresh milk supply)

Training and Assistance


Responsible coffee farming:
The Nescafé Plan 2011
NESCAFÉ Plan Farmers
(11% of our global green coffee supply)
(10% of our AOA green coffee supply)

•Global: +16,000 farmers
•AOA: +12,000 farmers


Responsible Cocoa Farming:
Nestlé Cocoa Plan 2011
Cocoa Plan Farmers
(6% of our global cocoa supply)
(35% of our AOA cocoa supply)

•AOA: +16,000 farmers


Over 570’000 persons earn their living from Nestlé

…and more
households

104’000 + 466’000
Nestlé Farmers,
employees Sales & Distributors Staff,
Third party dependants
(drivers, security, agencies…)


Interchange of cultures, ideas & best practices People,
culture,
values &
attitude

Asia
Africa and In-Patriates: 353
Ex-Patriates: 207
Middle East
In-Patriates: 256
Ex-Patriates: 106
Oceania
In-Patriates: 48
Ex-Patriates: 57


Zone “ ” : Manageing in turbulent times

HIV / AIDS Forex
Tsunamis Volatility Bali Bombing
Asian Financial Crisis Sept 11

‘RED SHIRTS’ Fukushima Nuclear
VOLATILE Input
Bangkok Plant
Israel / Palestine Costs (MSK, Coffee)
Floods &
Droughts tensions

War in Iraq
Earthquakes Arab Spring
Myanmar ,
Philippines Cyclone/
Infiltration,
Typhoon
Counterfeit Obesity
Zimbabwe
Milk Crisis China

Ivory Coast Trade Reform
Melamine SARS, Avian
Labour Laws
Incident Flu
North Korea


Competitive Intensity: The Way We Work People,
culture,
values &
attitude

1. We promote SAFE working behaviour 6. We Create Shared Value in the communities
2. We put the Consumer and Customer at the we operate
Heart of all we do 7. We are transparent, disciplined and aligned
3. We believe our People and Brands are our 8. We are flexible and anticipate the unexpected
Greatest Assets 9. We believe in seizing opportunities in
4. We focus and keep things simple, with an moments of crisis
emphasis on Speed in Execution 10. We promise what we can deliver and deliver
5. We strive to be Brilliant at the Basics what we promise


Agenda



3. Performance


Nestlé in AOA : Balanced portfolio and growing
3.3% 3.3%
3.8%
Powdered and Liquid Beverages

Milk products and Ice cream
7.0% 26.1% Prepared dishes and cooking aids
2011 FY
Sales: 8.2% Nutrition and Healthcare (a)

CHF 20B Confectionery

11.5% Nestlé Professional

24.8% Nestlé Waters

11.9% PetCare

Others
(a) Includes Pharmaceutical products, previously disclosed separately


2011 Full Year performance by geography

EUR Sales : CHF 26.2B
OG : 5.0%

31%

AOA
AMS 24%
45% Sales : CHF 20.0B
OG : 13.1%
Sales : CHF 37.4B
OG : 6.4%


2012 1H performance by geography

EUR Sales : CHF 12.7B
OG : 2.6%

29%

AOA
AMS 28%
44% Sales : CHF 12.2B
OG : 12.6%
Sales : CHF 19.2B
OG : 6.4%


AOA is increasing its contribution to Nestlé Group
Share of AOA as % of Total Nestlé Group

30%

27%

24% Sales AOA*
Sales Zone AOA
21%
TOP Zone AOA
18%

15%
2010 2011 H1 2012

* includes sales in AOA of GMBs as well as Zone AOA


Working Capital Long-term Trend (Z-AOA)

2007 2008 2009 2010 2011

TNWC as % of sales (indexed 2007 = 100)


Competition Landscape
Top 10 Food Companies in AOA
Source : Euromonitor 2011* - Sales at Retail Price in m USD

Japan
PRC Taiwan PRC Japan PRC

TING HSIN MENGNIU YILI

* Packaged Food, Pet Care, Hot drinks – Not an exclusive list of Companies, indicative.

Conclusion


New reality winning in Zone AOA

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (8)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie New reality winning in Zone AOA

Ähnlich wie New reality winning in Zone AOA (20)

Mehr von Nestlé SA

Mehr von Nestlé SA (20)

New reality winning in Zone AOA