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Growth and Innovation through Trends in Food

Growth and Innovation through Trends in Food 11
Growth and Innovation through Trends in Food Laurent Freixe EVP, Zone Americas Nestlé Investor Seminar 24 – 25 May, 2016 ShutterstockDisclaimer 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. 2Zone Americas RIG OG TOP +80bps 2.7 5.5 5.0 1.6 Q1 2016 FY 2015 FY 2015 Q1 2016 FY 2015 3“State of the Nation” Mexico Chile: Acceleration in North Nestlé in AMS in 3 numbers Strong and resilient America 44 50 87 Brazil: Competitive in a Cuba a clear opportunity tough enviroment 4Ambition 2016 and beyond: Drive Market Share and OG through RIG Outlook 2016 We will continue to operate in a Growth to come more from lowgrowth environment Market Share Pricing will contribute less to OG RIG North America LATAM contribution critical 5Economic environment U.S. LATAM • Impacted by end of commodity • Engine of world’s economy super cycle 6External forces shaping the industry Big Food under pressure 3G Activist Investors Schulte Roth: Shareholder Activism Insight Report, 2014 The digital disruption Millennials Low cost of capital Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics 7Millennials: Driving Food Trends 86 million strong in the U.S • Larger than the Baby Boomer generation • Three times the size of Generation X Discovery Trust Sharing New NHW 80 want to know 58 would pay 88 interested in 58 often post more about where more for Natural trying new foods online reviews their food is grown Organic Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics 8United States: The future of food is changing in 3 key areas 1 How we eat 2 How we shop How we engage 3 Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics 9Changing the way we eat Redefined NHW Food Globalized Time Constrained Snacking • Natural/organic • 52 of Millennials are multi • 90 snack multiple times daily cultural • Positive nutrition Modern Cooking (‘Speed • 60 find new and exotic Scratch’) • Diet in decline flavours appealing • 50 of dinners made in 30 min Internal analysis based on several U.S. based sources and ad hoc research, i.e., Nielsen, Euromonitor, Forrester, ZenithOptimedia, eMarketer, Facebook, Google Analytics 10Changing the way we shop ‘Pure’ growing More Smaller format Personalized and eCommerce and stores shelf engagement Mainstreaming digital options sets Costco will surpass Whole Ecommerce expected Foods as top seller of to rise by 38 in Organic Foods in the US, next 3 years for FB. topping 4BN 11Changing the way we engage Time spent with media Plethora of choices Multiple devices expands and shifts Connected devices per person: Time spent per day 4.3 by 2017 TV: 4.2 hrs Digital: 5.5 hrs Multitasking across Everyone creates Always on screens content 80 uses a smartphone while 69 of internet U.S. adults watching TV users have a consume 15.5 blog and 49 hrs of media created an per day outside online video 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 12Our strategy in the U.S. puts NHW and Innovation at the forefront 1 Delivering outstanding product quality To delight our Committing resources and focusing on 2 constant product improvement consumers Executing robust innovation plans customers 3 with excellence Achieving recognition by Building consumer consumers customers trust in our brands for outstanding innovation 13NHW at the core of Nestlé USA strategic agenda Delivering outstanding Communicating nutritional Leading the industry’s product quality NHW competitive advantage NHW agenda 10 sodium reduction by 2017 100 PHO free by 35 end of 2015 calories 100 with portion guidance by 2016 0 artificials by 2016 sales with 60/40+ win +150 bps every year 20152017 14IR robust pipeline centered around consumer platforms Healthy Pure, simple, real, craft Healthier snacking Modern cooking contemporary meals 15Enhanced focus on high growth channels 16Building Digital leadership to best engage consumers 17Turning around Frozen Food in the U.S. 18Stouffer’s: Increasing relevance to consumers • Creating transparency • Modernising benefits • Redefining meal occasions • Segmenting strategically 19Lean Cuisine: Intune 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’ 20Driving ‘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 21Lean Cuisine new communication 2223Ice Cream: Meeting consumers’ expectations on taste and modern health Real fruits and High quality ingredients Clean Simple by vegetables with transparency Design 24Coffeemate: Continuous growth thanks to continuous innovation 25Nestlé USA: Market Share momentum and profit improvement +20bps TOP FY 2015 Nestle USA Category 3.0 2.5 2.3 2.4 2.1 2.1 2.0 2.0 2.1 1.9 1.8 1.8 1.7 1.7 2016 1.6 2.1 2.2 1.4 YTD 2.0 1.9 1.8 Gap 1.7 1.5 1.4 +0.6 pts 2015 1.1 0.9 Jan 0.7 Gap 0.3 3.1 pts 0.4 0.6 1.0 1.4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YE Jan Feb Mar 2015 2016 2016 2016 26 Source: Nielsen Data Ending 03/26/16Pet Care North America: Winning with new consumer trends Merrick Dog Chow Strong momentum in the Unique, complementary Brand Restaging Plan Evolution to Clean Label and Natural Segment 2 years Brands in highgrowth building pride through natural ingredients after launch segments people and origins 27NPPC Wet Cat Premiumization Brand Proposition Price Per Oz Purely Fancy Feast : All natural, complete and balanced .65 meals featuring real, recognizable ingredients Muse (Pet Specialty Exclusive): Natural, balanced .40 meals guaranteed to taste great Beyond: Naturally and nutritionally complete meals with a focus on ingredients and sourcing .35 Pro Plan (Pet Specialty Exclusive): Super Premium .25 Nutrition Fancy Feast: An elevated, gourmet feeding experience .20 for cats. Complete and balanced nutrition Friskies: A wide variety of flavors and forms that .10 deliver complete and balanced nutrition 28 Premium Super Premium Ultra NaturalPurina new communication 2930Merrick communication 3132LATAM: Leveraging trends early on Merrick The Coffee shop at Speed Scratch Natural, whole grain Lactose Free home 33Being an employer of choice for the new generations 34First Pacific Alliance Summit for Youth 35The Strategic Virtuous Circle in action • Goal Alignment • Disciplined • Cost optimization across Businesses portfolio strategy and simplification: • 56 Total Delivered • 100 Lean Value Cost improvement Stream initiatives • Meeting our • Structural Cost • All four TNWC levers commitments with in focus optimization across society Markets • Focus on high • Robust IR pipeline at growth channels and global, regional and local new segments, level, based on consumer leveraging digital trends with NHW at the core 36Market Share back to positive, driving RIG and profitability ZAMS Market Share +232bps FY 2013 FY 2014 FY 2015 Q1 2016 7 out of top 10 markets gaining share 37Key Takeaways INNOVATION IN LINE WITH CONSUMER TRENDS 1 2 GAINING MARKET SHARE 3 GENERATING PROFITABLE GROWTH 38