nestlé investor seminar nestlé purina petcare europe - john harris · 2019-07-14 · the european...
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1 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Nestlé Investor SeminarNestlé Purina PetCare Europe - John Harris
2 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
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
3 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
NPPE recent performance headlines
4 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We are delivering double digit growth on strategic focus brands (% increase in sales)
0% 10% 20% 30% 40% 50% 60%
Friskies dry c a t
P ro P l a n
Gourme t
D o g C h o w
Felix single serve
B a k e r s
ONE/VB
2003 vs. 2002
ONE
Bakers
Felix single serve
Dog Chow
Gourmet
ProPlan
Friskies Dry Cat
0% 10% 20% 30% 40% 50% 60%
Friskies dry c a t
P ro P l a n
Gourmet
D o g C h o w
Felix single serve
B a k e r s
ONE/VB
2004 vs. 2003
5 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Sales % increase 2005 through April
0% 10% 20% 30% 40% 50% 60%
Friskies dry c a t
Pro Plan
Gourmet
Dog Chow
Felix single serve
Bakers
ONE/VB
2005 vs. 2004 YTDONE
Bakers
Felix single serve
Dog Chow
Gourmet
ProPlan
Friskies Dry Cat
6 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
YTD2002 2003 2004 Mar ‘05
42.4% 41.3% 40.1% 38.9%
24.7% 24.5% 24.5% 25.2%
21.2% 22.3% 23.5% 23.9%
Amid private label expansion, NPPE is delivering better market share performance than the market leader Mars
Mars
NPP Europe
Private Label
Source: AC Nielsen Grocery – 18 markets
7 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We are pressuring Mars in Europe’s two biggest markets –UK and France
20%
25%
30%
35%
40%
45%
50%
MATON 02
MATON 03
MATON 04
FM 04 AM04
JJ 04 AS 04ON 04DJ 05 FM 05
Mars NPPE
20%
25%
30%
35%
40%
45%
50%
MATON 02
MATON 03
MATON 04
FM 04 AM04
JJ 04 AS 04ON 04DJ 04 FM 05
Mars NPPE
UK – Value Market Share100% Total Cat & Dog incl. Snacks
France – Value Market Share100% Total Cat & Dog incl. Snacks
Source: AC Nielsen Grocery
8 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We have seized leadership from P&G/Iams in premium dry cat food sold through grocery stores
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
MAT AN-2
MAT AN-1
MAT AN
DJ04
FM04AM04
JJ04
AS04ON04
DJ05
FM05
Purina ONEIams
Value market share
Total Europe Dry Cat food
Source: AC Nielsen Grocery
9 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We are succeeding everywhere with Purina ONE dry cat food
0
5
10
15
20
25
30
MAT AN-2
MAT AN-1
MAT AN
DJ 04
FM 04AM 04 JJ
04AS04
ON04DJ0
4FM05
Val
ue m
arke
t sha
re o
f dry
cat
food
ItalyHollandGermanyPortugalFranceUKSwitzerland
Note: Vital Balance in France & part of SwitzerlandSource: AC Nielsen Grocery
10 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We have launched Beneful dry dog food in Holland with encouraging initial results
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Wk 36
Wk 38
Wk 40
Wk 42
WK 44
Wk 46
Wk 48
Wk 50
Wk 52
Wk 1
Wk 3
Wk 5
Wk 7
Wk 9
Wk 11
Valu
esha
re D
ry D
og (%
)
Beneful Value share
5.5%
• Aided awareness of Beneful improved drastically to 25% amongst total population, amongst IN’s it increased to 40%
TV Campaign
11 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
9 Factory disposals since 2001
Factory Project Date of disposal ordate of impact
Cornard (UK) Closure 2002Hetton (UK) Closure 2002Southall (UK) Closure 2002Northwich (UK) Closure 2002
Veghel (NL) Closure 2003Guingamp (Fr) Sale of factory 2003Leuth (Ger) Sale of factory 2003
Barrhead (UK) Closure 2004
Worksop (UK) Closure 2005
12 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
NPPE Profit % (indexed to 2001 = 100)
50
60
70
80
90
100
110
120
130
140
150
160
170
2001 2002 2004 2007 objective
100
170
149
Supply Chain savingsVolume/MixOverhead reduction
140
13 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
The European Pet Care Market
14 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
European cat and dog food market vs. other regions
3.6
7.4
18.717.4
0
2
4
6
8
10
12
14
16
18
20
North America Europe AOA Latin America
Sal
es '0
00 C
HFCat and dog food 2004 retail sales
All channels and markets
Source: Euromonitor Feb 2005
15 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
European cat and dog food market vs. other Nestlé categories in Europe
Source: AC Nielsen Grocery
720
2,1652,7613,015
3,7104,517
5,572
12,575
13,978
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Chilled D
airy
Chocolate
Pet food
Froze
n food
Ice cr
eam
Infant N
utrition
Chilled c
ulinary
Soluble coff
ee
Milk m
odifier
Val
ue s
ales
€m
European 2004 category salesGrocery only, Western Europe (7 countries)
16 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Europe has more cats and dogs than North America
Europe North America
Cats 86.3 million 85.3 million
Dogs 77.2 million 65.9 million
17 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Opportunities to increase commercial pet food usage in Europe are substantial
80%
50%
32%
5%0%
10%
20%
30%
40%
50%
60%
70%
80%
USA Western Europe Southern Europe Central/EasternEurope
Commercial food
penetration
Source: Euromonitor estimates
18 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Industrial food coverage continues to grow even in developed markets…
UK - Industrial food coverage
70.5%69.0%64.5%
61.0%
51.0%47.5%45.0%44.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2001 2002 2003 2004
Cat Dog
France - Industrial food coverage
61.0%60.2%60.0%59.3%
53.2%52.5%52.0%51.4%
0%
10%
20%
30%
40%
50%
60%
70%
2001 2002 2003 2004
Cat Dog
Source: Euromonitor, Feb 2005
19 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
…and can increase rapidly in emerging markets
Russia - Industrial food coverage
8.9%
8.1%
7.0%
6.0%
4.0%3.5%
3.0%2.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2001 2002 2003 2004
Cat Dog
15.0%
38.0%
13.5%12.5%11.5%
33.0%
29.0%
26.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2001 2002 2003 2004
Cat Dog
Source: Euromonitor, Feb 2005
Czech Republic - Industrial food coverage
20 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
The European cat and dog food market profile is evolving in two important respects…
Dry food is growing faster than wet food
Superpremium food is growing faster than non-superpremium food
90
95
100
105
110
115
120
ON01FM02 JJ
02ON02
FM03 JJ03
ON03FM
04 JJ04
ON04FM
05
Wet Dry
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
ON01FM02 JJ
02ON02
FM03 JJ03
ON03FM
04 JJ04
ON04FM
05
Superpremium Non Superpremium
Value sales index toOct/Nov ‘01
Value sales % change vs. YAG
Source: AC Nielsen Grocery – 18 markets
21 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
NPPE portfolio well positioned for future growth
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003 2004 2005* 2006* 2007* 2008*
Premium value added Multiserve wet cat + wet dog Snacks & Accessories
SnacksMultiserve wet
Premium added value
*Estimates
22 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
The shift from wet to dry food is global
Source: Euromonitor, Nielsen Grocery
0
200
400
600
800
1000
1200
1998 1999 2000 2001 2002 2003
Tons
000
0
1 0 0 0
2 0 0 0
3 0 0 0
4 0 0 0
5 0 0 0
6 0 0 0
7 0 0 0
8 0 0 0
1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3
Tons
000 D ry
W e t
AMERICAS
0
500
1000
1500
2000
2500
3000
1995 1996 1997 1998 1999 2000 2001 2002 2003
Tons
000
EUR AOA
23 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Our objectives and strategies
24 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Our objectives
1. To strengthen our number two overall position to Mars
2. To build upon or establish leading positions where it matters most
• In dry food
• In premium food
3. To improve our operating margins to the average of Nestlé Europe
25 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Our strategies
1. Leverage Nestlé Purina know-how to deliver superior performing dog and cat foods
• More pleasing to pets• More appealing to pet owners• Healthier, for better and longer lives
2. Commercialise this performance via strong range brands targeted to unique consumer segments
• Pro Plan • Gourmet• ONE • Felix• Beneful • Friskies• Bakers
3. Serve priority consumers where they shop, and adapt selling approaches to key sales channels
4. Build trust in the entire range via the Purina corporate brand
26 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Our know how in pleasing pets is world class
27 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
And the results show …
7573
76
2725 24
0%
25%
50%
75%
100%
Chicken Lam b T una
7684 83
2416 17
0
20
40
60
80
100 Royal Canin Adult
Pro Plan dry dog
food
7972 72
2828
21
0%
25%
50%
75%
100%
Oct-04 Nov-04 Dec-04
Pedigree
Beneful
Sheba
Gourmet Perle
Food consumption ratios
Test 1 Test 2 Test 3
28 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Pet owner food appeal strongly influences brand choice, and NPPE is leading the way
29 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
NPPE is helping pets live longer, healthier lives …. and we’ve proved it
30 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
The success of Gourmet wet cat food
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2002 2003 2004
Sal
es (C
HF
'000
)
+9.7%
+15.5%
Source: AC Nielsen Grocery
31 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Gourmet Diamante and Etoile: stretching the potential for premium pricing
0.54
0.98
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Pric
e €
Average Gourmet Gold Average Gourmet Diamante/Etoile
Source: AC Nielsen, internal auditing
Average price / 85g can – Italy
32 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Gourmet Etoile: encouraging launch results
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
15/02
/2004
07/03
/2004
28/03
/2004
18/04/2
004
09/05
/2004
30/05
/2004
20/06
/2004
11/07
/2004
01/08
/2004
22/08
/2004
12/09
/2004
03/10
/2004
24/10
/2004
14/11/2
004
05/12
/2004
26/12
/2004
16/01
/2005
06/02
/2005
27/02
/2005
20/03
/2005
Source: AC Nielsen
Value share of Wet Cat food – single serve, Italy
33 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Felix “As Good As It Looks”: encouraging launch results in the UK
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%07
/08/
2004
21/0
8/20
04
04/0
9/20
04
18/0
9/20
04
02/1
0/20
04
16/1
0/20
04
30/1
0/20
04
13/1
1/20
04
27/1
1/20
04
11/1
2/20
04
25/1
2/20
04
08/0
1/20
05
22/0
1/20
05
05/0
2/20
05
19/0
2/20
05
05/0
3/20
05
19/0
3/20
05
02/0
4/20
05
16/0
4/20
05
Value share of Wet Cat food – single serve
Source: AC Nielsen UK
34 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
We serve three unique sales channels
Grocery Specialist Discount
• Hypermarkets
• Supermarkets
• Small grocery/convenience stores
• Pet shops
• Garden Centres
• Agri-stores
• Veterinary clinics
• Hard discount
• Soft discount
<To be added>
35 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Our selling approach varies based on channel dynamics
Narrow Broad
Low
High
Discount stores
Supermarkets
Veterinary clinics
Pet shops
Hypermarkets
Degree of in-store information and support
Proposedassortment
Pet Superstores
36 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Each channel serves a specific role for NPPE
Grocery Specialist Discount
Access to a broad shopper base for the
majority of our brands and products
Information and personal selling for more specialised and sophisticated
products and ranges
Access to convenience and cost-minded
shoppers for our most popular products
<To be added>
37 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
To consumers, Purina is the company behind everything we do
`
`
`
`
`
`
Product endorsement
Print tag
Consumer relationship panel
Events & sponsorship
Websites
TV tag
38 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
NPPE upcoming innovations
39 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Beneful Healthy Weight
March ’05 on shelf in Europe
• Indulgent Nutritionists’ dogs tend to be overweight because of their indulgent behaviour
• Beneful Healthy Weight offers:– Perfect balance of healthful
ingredients– Calorie smart nutrition– Excellent taste
• Healthy Weight will increase penetration and shelf space for the brand
40 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
New snacks & treats
Dental Fresh– Proven to reduce tartar
build-up by 45%.– Helps to freshen breath. – Ideal for daily usage
MegaboneChewy, long-lasting treat with a meaty filling
FuntastixTasty meaty treat with ham and cheese flavour
- Superior palatability to competitors
- Low in fat- Unique shape
41 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Pro Plan Dog: Sensitive range launch July 05
Consumer insight / opportunity– Allergies are a top health concern for Expert
Driven Providers– Sensitive category already represents 12% of
super premium dog sales– Leverage Nestle R&D knowledge
The first pet specialty product withrestricted protein source to reduce riskof allergic reaction
42 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
ONE cat: Sensitive formula – March 05
• For sensitive digestion & palate• Superior digestibility (>90%)
• Optimal faecal consistency
• Higher palatability than adult
• Unique product within the channelWithTURKEY
43 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
New: with chunks made with fresh meat
• Consumers associate freshness with high quality
• Significant increase in palatability
Friskies dry dog food with fresh meaty chunks
44 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Summary
Pet care in Europe – a large category with good growth potential
Consumer purchase and feeding behaviour evolving in our favour
NPPE closing the market share gap to Mars while improvingoperating margin
Strong innovation track record and pipeline
Clear potential for continued profit improvement
45 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2005
Nestlé Investor SeminarNestlé Purina PetCare Europe - John Harris