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Growth and
Innovation
through Trends
in Food
Laurent FreixeEVP, Zone Americas
Nestlé Investor Seminar24 – 25 May, 2016
Shutterstock
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This presentation contains forward looking statements which
reflect Management’s current views and estimates. The
forward looking statements involve certain risks and
uncertainties that could cause actual results to differ
materially from those contained in the forward looking
statements. Potential risks and uncertainties include such
factors as general economic conditions, foreign exchange
fluctuations, competitive product and pricing pressures and
regulatory developments.
Disclaimer
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RIG
FY 2015 Q1 2016
OG
FY 2015 Q1 2016
+80bpsTOP1.6%
2.7% 5.5% 5.0%
Zone Americas
FY 2015
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“State of the Nation”
Nestlé in AMS in 3 numbersAcceleration in North
America
Mexico & Chile:
Strong and resilient
87%
44% 50%
Cuba a clear opportunityBrazil: Competitive in a
tough enviroment
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Ambition 2016 and beyond:
Drive Market Share and OG through RIG
Outlook 2016
We will continue to operate in a
low-growth environment
Pricing will contribute less to OG
Growth to come more from
Market Share
RIG
North America
LATAM contribution critical
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Economic environment
U.S. LATAM
• Engine of world’s economy • Impacted by end of commodity
super cycle
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External forces shaping the industry
Big Food under pressure Activist Investors 3G
Low cost of capital
Schulte Roth: Shareholder Activism Insight Report, 2014
The digital disruption Millennials
Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics
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Millennials: Driving Food Trends
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86 million strong in the U.S
• Larger than the Baby Boomer generation
• Three times the size of Generation X
New NHW
58% would pay
more for Natural &
Organic
Discovery
88% interested in
trying new foods
Trust
80% want to know
more about where
their food is grown
Sharing
58% often post
online reviews
Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics
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United States: The future of food is changing in 3 key areas
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How we eat
How we shop
How we engage3
2
1
Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics
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Changing the way we eat
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Redefined NHW
Snacking• 90% snack multiple times daily
Modern Cooking (‘Speed-
Scratch’)• 50% of dinners made in <30 min
Time Constrained Food Globalized
• 52% of Millennials are multi-
cultural
• 60% find new and exotic
flavours appealing
• Natural/organic
• Positive nutrition
• Diet in decline
Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics
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Changing the way we shop
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Smaller format
stores & shelf
sets
More
eCommerce and
digital options
Personalized
engagement
‘Pure’ growing
and
Mainstreaming
E-commerce expected
to rise by 38% in
next 3 years for F&B.
Costco will surpass Whole
Foods as top seller of
Organic Foods in the US,
topping $4BN
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Changing the way we engage
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Time spent with media
expands and shiftsMultiple devicesPlethora of choices
Always onEveryone creates
content
Multitasking across
screens
Connected devices per person:
4.3 by 2017Time spent per day
Digital: 5.5 hrs TV: 4.2 hrs
80% uses a smartphone while
watching TV 69% of internet
users have a
blog and 49%
created an
online video
U.S. adults
consume 15.5
hrs of media
per day outside
of work
Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics
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Our strategy in the U.S. puts NHW and Innovation at the forefront
To delight our
consumers &
customers Executing robust innovation plans
with excellence
Achieving recognition by
consumers & customers
for outstanding
innovation
Committing resources and focusing on
constant product improvement
Delivering outstanding product quality
Building consumer
trust in our brands
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NHW at the core of Nestlé USA strategic agenda
Delivering outstanding
product quality & NHW
Communicating nutritional
competitive advantage
Leading the industry’s
NHW agenda
10% sodium
reduction by 2017
100% PHO* free by
end of 2015
100% with portion
guidance by 2016
0 artificials by 2016
% sales with 60/40+
win +150 bps every
year 2015-2017
35calories
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I&R robust pipeline centered around consumer platforms
Healthy
contemporary mealsPure, simple, real, craft Healthier snacking Modern cooking
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Enhanced focus on high growth channels
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Building Digital leadership to best engage consumers
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Turning around Frozen Food in the U.S.
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Stouffer’s: Increasing relevance to consumers
• Creating transparency
• Modernising benefits
• Redefining meal
occasions
• Segmenting strategically
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Lean Cuisine: In-tune with consumers values
• Strong differentiation on
shelf driving reappraisal
• Clear 60/40 winners
• New health benefits that
connect with consumers
• Compelling
communication: pivot
from ‘diet’
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Driving ‘Clean and Simple by Design’
INGREDIENTS: BROWN RICE, WATER, CHICKEN
BREAST WITH RIB MEAT, SNAP PEAS, CARROTS,
RED BELL PEPPERS, SUGAR, CORN STARCH,
MOLASSES, PINEAPPLE JUICE CONCENTRATE,
RICE WINE VINEGAR, SALT, SOYBEANS, SESAME
OIL, GARLIC, GINGER, MALT EXTRACT,
POTASSIUM CHLORIDE, SALT, TAPIOCA
STARCH, ONION POWDER
39 words
102 words
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Lean Cuisine new communication
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Ice Cream: Meeting consumers’ expectations on taste and modern health
High quality ingredients
with transparency
Real fruits and
vegetablesClean & Simple by
Design
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Coffee-mate: Continuous growth thanks to continuous innovation
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-1.4%
-1.0%
-0.6%-0.4%
0.3%
0.7%
1.1%1.4%
1.7%1.9% 2.0%
2.3%2.5%
3.0%
2.4%
2.1%1.7% 1.7%
2.0%
1.4%1.6%
1.8% 1.8% 1.9% 2.0% 2.1% 2.1%
2.1% 2.2%1.8%
0.9%
1.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YE2015
Jan2016
Feb2016
Mar2016
Nestle USA Category
2015
Jan
Gap
-3.1 pts
2016
YTD
Gap
+0.6 pts
Nestlé USA: Market Share momentum and profit improvement
+20bpsTOP
FY 2015
26 Source: Nielsen Data Ending 03/26/16
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Pet Care North America: Winning with new consumer trends
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Dog Chow
Brand Restaging Plan
building pride through
people and origins
Evolution to Clean Label and
natural ingredients
Strong momentum in the
Natural Segment 2 years
after launch
Merrick
Unique, complementary
Brands in high-growth
segments
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Friskies: A wide variety of flavors and forms that
deliver complete and balanced nutrition
Muse (Pet Specialty Exclusive): Natural, balanced
meals guaranteed to taste great
Beyond: Naturally and nutritionally complete meals with
a focus on ingredients and sourcing
Pro Plan (Pet Specialty Exclusive): Super Premium
Nutrition
Fancy Feast: An elevated, gourmet feeding experience
for cats. Complete and balanced nutrition
Purely Fancy Feast : All natural, complete and balanced
meals featuring real, recognizable ingredients
Pre
miu
mS
up
er
Pre
miu
m
U
ltra
Natu
ralBrand Proposition Price Per Oz
$.65
$.40
$.35
$.25
$.20
$.10
NPPC Wet Cat Premiumization
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Purina new communication
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Merrick communication
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LATAM: Leveraging trends early on
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Natural, whole grain Lactose Free Speed Scratch
Merrick
The Coffee shop at
home
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Being an employer of choice for the new generations
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First Pacific Alliance Summit for Youth
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The Strategic Virtuous Circle in action
• Meeting our
commitments with
society
• Focus on high-
growth channels and
new segments,
leveraging digital
• Robust I&R pipeline at
global, regional and local
level, based on consumer
trends with NHW at the core
• Cost optimization
and simplification:
• Disciplined
portfolio strategy
• Goal Alignment
across Businesses
• 100 Lean Value
Stream initiatives
• 5-6% Total Delivered
Cost improvement
• Structural Cost
optimization across
Markets
• All four TNWC levers
in focus
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ZAMS Market Share
FY 2013
+232bps
FY 2014 FY 2015
7 out of top 10 markets gaining share
Market Share back to positive, driving RIG and
profitability
Q1 2016
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Key Takeaways
3 GENERATING PROFITABLE GROWTH
1 INNOVATION IN LINE WITH CONSUMER TRENDS
2 GAINING MARKET SHARE
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