Slide 1: Beverages USA
Beverages USA Rob Case 1 Nestlé Investor Seminar Nestlé Investor Seminar: Rob Case
Slide 2: Forward looking statements
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
Slide 3: Part of a worldwide $14 billion USD Nestlé beverages business
Part of a worldwide $14 billion USD Nestlé beverages business * 2001 results; Swiss Francs U.S. Dollar exchange rate = 1.68 3 Nestlé Investor Seminar: Rob Case
Slide 4: Beverage Division: plants and brands
Beverage Division: Sales: $1.2 Billion RIG: 3.7% Brands: 9 Employees: 945 Freehold, NJ Taster’s Choice, Waverly, IA Nestea Nesquik, Cocoa, Frothé Kenosha, WI Bordentown, NJ Glendale Henderson, NV Jacksonville, IL Coffee-mate Sulphur Springs, TX Plants Ocean Spray Facilities 4 Nestlé Investor Seminar
Slide 5: Go-to-market strategy
Go-to-market strategy ¾ Historically, our beverage brands have been marketed individually ¾ The brands were recently re-organized into two focused units • Kids’ brands • Coffee, creamer & tea ¾ We will focus on leveraging consumer insights within these groups, as well as leveraging cross-marketing o
Slide 6: Kids' beverage brands -- $680 million
Nestlé beverage sales -- $1.2 billion Kids’ beverage brands -- $680 million Juices 67% 6 Nestlé Investor Seminar: Rob Case
Slide 7: Kids beverage brands
Kids beverage brands (52 weeks) “Retail Dollars” % Chg $390 mm +4.0 “Long-term growth via moms’ desire for children’s success in $415 mm +11.0 life.” $75 mm -6.0 Source: AC Nielsen 7 Nestlé Investor Seminar: Rob Case
Slide 8: Kids' beverage brands
Kids’ beverage brands Powdered Milk RTD Hot Juice Modifiers Flav Milk Cocoa Mix Nectars Category size (MM) $ 5,900 $ 135 $ 480 $ 200 $ 125 Competitors 9.2 Kraft 59.2 Nestlé 47.1 Dairy Brand 34.9 Swiss Miss 37.0 Nestlé 9.0 Coke 29.5 Ovaltine 22.2 Nestlé 31.9 Nestlé 25.7 Jumex 7.3 Nestlé 4.0 P/L 22.1
Slide 9: Kids' beverage brands
Kids’ beverage brands Situation: Juice and Milk consumption strong with families with kids under 12 Opportunity: Leverage Juicy Juice’s nutritional halo, Nesquik’s ability to get kids to drink milk, and Infant Formula relationship with mothers 9 Nestlé Investor Seminar: Rob Case
Slide 10: Major actions
Major actions Strategy: - Establish Nesquik as mom’s ally for exceptional child development - Maintain fun personality for kid appeal Actions: - Evolve mom advertising to be both emotional and functional - Calcium -> builds bones Æ perform better Æ more successful - Increase penetration via direct m
Slide 11: Database
Database -75% of all births captured - 3 million names per year We know when families are formed 11 Nestlé Investor Seminar: Rob Case
Slide 12: Major actions
Major actions Strategy: - Establish Juicy Juice as mom’s only juice choice for exceptional child development - Increase price premium and realize significant operational savings (Ocean Spray) to further improve EBITA Actions: - Evolve advertising to be both emotional and functional - Increase penetr
Slide 13: Coffee, creamer and tea -- $540 million
Nestlé beverage sales -- $1.2 billion Coffee, creamer and tea -- $540 million Creamers 46% 13 Nestlé Investor Seminar: Rob Case
Slide 14: Coffee, creamer and tea
Coffee, creamer and tea (52 weeks) “Retail Dollars” % Chg $40 mm -2.0% “Long-term growth $140 mm -6.0% via youth.” $510 mm +15.0% $ 75 mm +10.5% Source: AC Nielsen 14 Nestlé Investor Seminar: Rob Case
Slide 15: Coffee, creamer and tea
Coffee, creamer and tea Soluble Coffee Powdered Refrigerated Powdered Coffee Mixes Creamers Creamers Tea Category $ 450 $ 195 $ 280 $ 545 $ 290 size (MM) Competitors 38.0 Nestlé 69.1 Kraft 48.8 Nestlé 62.3 Nestlé 27.5 Lipton 29.4 P&G 13.8 P&G 38.7 P/L 32.6 Dean’s 21.8 Kraft 21.4 Kraft 4.8 P/L 8.8 Cr
Slide 16: Coffee, creamer and tea
Coffee, creamer and tea Situation: Coffee and tea category demand declining as young people opt for non-coffee beverages Coffee: Attract youth into the category via innovative new products, such as Nescafé Frothé, both in-home and out-of-home, and progress them to soluble coffee as they age Creamer:
Slide 17: Nestlé will bring younger consumers into coffee via innovation
The strategy: Nestlé will bring younger consumers into coffee via innovation In-Home Nescafé Frothé Nescafé Nescafé/TC Clasico ’03 & ’04 Nescafé/TC Regular Innovations Nescafé/TC Decaf Nescafé/TC Flavors 18-35 35+ 40+ 0 70+ 18+ 18-35+ Out-of-Home Nescafé RTD Nescafé Nescafé (long-term) Ice Blended V
Slide 18: Nescafé Frothé
Nescafé Frothé Launch nationally: Sept 3, 2002 Target: 18-49, female, younger skew Six flavors: Enchanting Vanilla Captivating Caramel Divinely Mocha Silky White Chocolate Mystical Hazelnut Mocha Butterfinger Product: Proprietary foam booster Account acceptance: Top 17/20 accept all 6 Advertising: O
Slide 19: Create consumer awareness and trial through out-of-home experiences
Create consumer awareness and trial through out-of-home experiences 19 Nestlé Investor Seminar: Rob Case
Slide 20: Product excellence through branded technical solutions
Product excellence through branded technical solutions On Demand Systems Flexible Classic Brew (Banquets & Catering) Options Quick Serve / Casual Dining (Self serve and portable) Space Saver Compact for small areas Vending Options Office Coffee Solution 20 Nestlé Investor Seminar: Rob Case
Slide 21: Branded Nescafé models
Branded Nescafé models Nescafé Café Nescafé branded Primary model Limited application Flexible application Toll House by Chip - Grapevine, TX McDonald’s – Ludlow, MA University of Texas 21 Nestlé Investor Seminar: Rob Case
Slide 22: Out of home solutions
Out of home solutions Operationally simple systems • Reduced waste • Quality control • Reduced labor costs • Service network support Retail advertising to support the brand • National ad campaign Continual product innovation • New branded varieties • Product development leadership 22 Nestlé Investor
Slide 23: Nescafé branded placement progress
Nescafé branded placement progress On Full Cappuccino Tollhouse Total Total Demand Branded By Chip Units Units at Systems Vend Added Year End Per Year 1998-'00 2,806 4,113 3,974 14 10,907 10,907 2001 1,409 510 464 24 2,407 13,314 Base 4,215 4,623 4,438 38 13,314 13,314 2002 2,500 1,000 2,000 40 5,54
Slide 24: Coffee-mate
Coffee-mate Strategy: - Establish Coffee-mate as a coffee enhancer that is indispensible to your coffee - Attract youth to Coffee-mate via innovative communication driving out-of-home penetration Actions: - Drive product superiority - Launch new flavors and new products as additives that enhance the
Slide 25: Summary
Summary ¾ Nescafé launch & long-term value creation ¾ Grow Coffee-mate through innovation ¾ Build Nesquik & Juicy Juice relationship with mothers ¾ Evaluate new segments where Nestlé can add value ¾ Build RTD capabilities over time 25 Nestlé Investor Seminar: Rob Case
Slide 26: Beverages USA
Beverages USA 26 Nestlé Investor Seminar Nestlé Investor Seminar: Rob Case