Nestle S.a. · SIX:NESN
Nestle — Berenberg's European Conference 2015
37 slides from Nestle's conference presentation, December 2015
Slide 1: Healthier consumer trends – opportunity or risk?
Healthier consumer trends – opportunity or risk? Since 2015 Head of Global Product & Technology Development, SVP 2011 - 2015 Global Head of R&D, SVP 2010 - 2011 R&D Manager Beverage SBU Dr Johannes J. Baensch 2007 - 2010 VP Operations, Cereal Partners Worldwide S.A. 2005 - 2007 Technical and R&D Man
Slide 2: Key messages
Key messages We understand consumer needs and preference – today and in the future We have strong science & technology behind our products and brands We balance taste and nutrition We develop appropriate structures CONFIDENTIAL 2 Proprietary information of Nestlé S. A., Vevey, Switzerland – This doc
Slide 3: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 3 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior author
Slide 4: A changing environment creates new challenges and opportunities
A changing environment creates new challenges and opportunities Population growth From 7.1 to 9.6 billion in 2050 70% in urban areas Food vs. Globalization nutrition Sustainably will further expose From under the food system to feeding the economic and nutrition to obesity world population political
Slide 5: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 5 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior author
Slide 6: Innovation supports our Food Safety, Nutrition and Health Roadmap
Innovation supports our Food Safety, Nutrition and Health Roadmap Food Food Food Health/Disease Health Supply Security & Pleasure Prevention Management Safety CONFIDENTIAL 6 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prio
Slide 7: Processed food adds value
Processed food adds value Commu- nication Conveni- Pleasure ence Personali- sation Consumer NHW preference & trends Sustain- ability Premi- umisation Creating shared value Food safety Food security Food supply CONFIDENTIAL 7 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document
Slide 8: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 8 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior author
Slide 9: We leverage consumer preference & trends
We leverage consumer preference & trends Commu- nication Conveni- ence Pleasure Personali- sation Consumer NHW preference & trends Sustain- ability Premi- umisation Creating shared value CONFIDENTIAL 9 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduc
Slide 10: And quantify the dimensions of food pleasure
And quantify the dimensions of food pleasure Commu- Taste nication Conveni- Pleasure ence Personali- sation Consumer NHW preference & trends Sustain- ability Premi- umisation Creating Texture shared value CONFIDENTIAL 10 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document sho
Slide 11: … to translate what drives consumer preference
… to translate what drives consumer preference Sweet Taste Sour Bitter Texture Salty Umami CONFIDENTIAL 11 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior authorisation
Slide 12: We address selected food attributes, which are relevant for our consumer
We address selected food attributes, which are relevant for our consumer All natural High in fiber Sustainably sourced ingredients Low salt / sodium High in protein Low sugar / sugar free Low / no fat low / no calories Micronutrient fortified Gluten-free 0 5 10 15 20 25 30 35 40 45 50 Nielsen Global
Slide 13: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 13 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior autho
Slide 14: We have unmatched R&D capability to innovate
We have unmatched R&D capability to innovate Discover Develop Deploy • Nestlé Institute of Health • R&D Centres • > 300 AGs Sciences • PTCs • In over 80 countries • Nestlé Research Center Nestlé Clinical Development Unit CONFIDENTIAL 14 Proprietary information of Nestlé S. A., Vevey, Switzerland –
Slide 15: Our R&D network has a global reach
Our R&D network has a global reach Solon Fremont Uppsala Minneapolis Bakersfield China (Beijing) King of Prussia San Diego Tokyo Princeton Sderot China (Shanghai) India Querétaro Marysville China (Xiamen) China (Dongguan) St. Joseph St. Louis Abidjan Singapore York Askeaton Egerkingen Amiens Singen
Slide 16: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 16 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior autho
Slide 17: The consumer at the center of our thinking and activity
The consumer at the center of our thinking and activity Consumer What are the benefits for our consumers? Operational Sustainability Science & Technology Innovation Do we have differentiating Can we create value for society Sweet-spot and Nestlé along the value chain? technologies to find new soluti
Slide 18: Therefore we address the whole value chain
Therefore we address the whole value chain Consumer Sourcing Manu- Marketing Packaging Distribution Experience Ingredients facturing Sales or Service … new or more efficient solutions … new consumer offers or benefits CONFIDENTIAL 18 Proprietary information of Nestlé S. A., Vevey, Switzerland – This
Slide 19: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 19 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior autho
Slide 20: We apply consumer feedback in LEAN product design
We apply consumer feedback in LEAN product design Structured consumer Understand consumer Identify value adding LEAN product design data analysis value drivers ingredients & processes 60/40+ Improve existing Ingredients Complaints products Sensory maps Reformulation Process technology Optimise new p
Slide 21: Outline
Outline 1 Changing environment 2 Why processed food 3 Consumer trends 4 Our R&D setup 5 Consumer centricity 6 Technology lead 7 Examples 8 Conclusions CONFIDENTIAL 21 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior autho
Slide 22: We provide balanced nutrition and…
We provide balanced nutrition and… • Consumer understanding • Perception physiology Substitute • Air • Water Reduce • Carbohydrates • Biotransformation Avoid • Sweeteners & taste enhancers CONFIDENTIAL 22 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be repro
Slide 23: We reduce sugar & fat to drive consumer preference in Ready to drink
We reduce sugar & fat to drive consumer preference in Ready to drink Science & Technology Outcome Consumer centric reformulation Health Care Professionals without compromise on taste understand better nutritional and texture: composition compared to the competitor product (1400/94%) • 54% total suga
Slide 24: New Nesquik with great taste that kids love and mums approve
New Nesquik with great taste that kids love and mums approve – a perfect milk modifier Sugar reduction compliant Micro fortification to support with WHO recommendations Kids’ growth & development > 1’000 tons of sugar Fortification reduced worldwide Potassium 15% Vit D 30% Iron 15% Vit C 15% Zinc 15
Slide 25: We provide balanced nutrition and…
We provide balanced nutrition and… • Consumer understanding Substitute • Perception physiology • Air • Water Reduce • Carbohydrates • Proteins Avoid • Bulking agents • Food structuring CONFIDENTIAL 25 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduce
Slide 26: We substitute partially hydrogenated oil with high oleic soybean oil
We substitute partially hydrogenated oil with high oleic soybean oil Science & Technology Outcome Partnership with DuPont Pioneer Liquid Coffee-mate By end of 2015 (US): to grow new soy oil crop at large scale for the first time • 45% SFA reduced • 25’800 tons of oil substituted • 9’900 tons of tran
Slide 27: Protein aggregation can lead to a viscosity increase
Protein aggregation can lead to a viscosity increase CONFIDENTIAL 27 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be reproduced or disclosed without prior authorisation
Slide 28: A great example – Mövenpick of Switzerland (2015)
A great example – Mövenpick of Switzerland (2015) Vanilla & Brownies Vanilla & Brownies new product Mix recipe New mix recipe Milk fat -28 % fat Dairy proteins Increased protein content Stabilizer NO Starch New technology wins 60/40 vs. full fat Ice Cream CONFIDENTIAL 28 Proprietary information of N
Slide 29: We provide balanced nutrition and…
We provide balanced nutrition and… • Consumer understanding Substitute • Perception physiology • Minerals Reduce • Biotransformation • Culinary art & taste compensation Avoid • Material science CONFIDENTIAL 29 Proprietary information of Nestlé S. A., Vevey, Switzerland – This document should not be
Slide 30: We deliver great taste, while reducing sodium and SFA in Instant Noodles
We deliver great taste, while reducing sodium and SFA in Instant Noodles 15% SODIUM reduction 50% SFA reduction through whilst improving taste pre-drying & oil blend optimization Exported in 17 countries under 4 brands CONFIDENTIAL 30 Proprietary information of Nestlé S. A., Vevey, Switzerland – Thi
Slide 31: We drive micronutrient fortification to counteract malnutrition
We drive micronutrient fortification to counteract malnutrition More than 167 billion Nestlé is engaging in servings in 2013 biofortification of maize, cassava, wheat etc. 200 billion servings fortified Planting & consumption by by 2016 smallholder farmers will improve the nutrient supply CONFIDENTI
Slide 32: We incorporate whole grain technology in RTD
We incorporate whole grain technology in RTD Science & Technology Outcome Enzymatic hydrolysis of • 8 g whole grain/serving cereals to generate and stabilize fibers in liquid • Fibers, vitamins, mineral application preserved • Sugar reduction CONFIDENTIAL 32 Proprietary information of Nestlé S. A.,
Slide 33: In a retrospective we have achieved a lot
In a retrospective we have achieved a lot 2012 2013 2014 # renovated products for 6692 7789 10818 nutrition or health considerations # products with reduced sodium, 3317 4221 6973 sugars, trans-fat, total fat, calories or artificial colorings # products with increase in 4691 4778 6359 nutritious ing
Slide 34: Out of home solutions deliver multiple choice through consumer interaction
Out of home solutions deliver multiple choice through consumer interaction Input MILANO 2 Outcome • Machine settings • Coffee type • Milk components • Sugar Understanding the process influence on sensory characteristics 34 CONFIDENTIAL Proprietary information of Nestlé S. A., Vevey, Switzerland – Th
Slide 35: We focus on packaging to drive consumer preference
We focus on packaging to drive consumer preference (n=62, 7-point scale) Preference = Handle Open Read 6.27 Functionality = f(torque + peel force + cap diam.) 7 5.97 6 Functionality 5.31 5 4 4.60 3 3 4 5 6 7 1 2 3 4 5 6 7 Predicted value Mean Score CONFIDENTIAL 35 Proprietary information of Nestlé S
Slide 36: We deploy our innovations and ensure sustainability
We deploy our innovations and ensure sustainability Index 160 61% Production volume 140 120 6% Total on-site energy 100 consumption -14% Direct GHG emissions 80 -16% Total water withdrawal 60 -38% Total water discharge -51% Total waste for disposal 40 2004 2006 2008 2010 2012 2014 CONFIDENTIAL 36 Pr
Slide 37: Consumer centric product I&R is paying off (US)
Consumer centric product I&R is paying off (US) • NHW benefits, e.g. gluten free, • Rich in proteins, complex high in protein, organic carbohydrates and vegetables • Ethnic dishes • Modern ethnic flavours • Fresh and real, not dehydrated • Clean label vegetables giving authentic, clean taste CONFIDE