Indonesia: Fueling growth

through affordvaluity

Budi Isman

Indonesia: a fast growing market

2005 2006 2007

753

2008

+17%

645555

466

(Value in € mln)

Danone is leading the baby food market

Danone

(Market share in Value – last MAT)

33%

25%

15%

Competitor 1 Competitor 2

Price for GUM vs. other countries: Adjusted price per kg, 2007

Vietnam

14

23

27

34

18

China

Indonesia

Malaysia

Singapore

Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009

Indonesia:

4th most populated country (230 mln)

4 mln babies born every year, 24 mln children

0-5 years old

High needs in nutrition

Lack of education about nutrition

Economy still growing in world recession

Fast growing baby food market Market value:

We operate through 2 companies

a fast-growing company

Products imported since 1967, full local

operations with 100% NUMICO ownership

starting 1989

develop and market products of the highest

quality and safety in Indonesia

for healthy growth and development

an iconic company

established in 1954 by the Government &

UNICEF

for healthy development of children in

Indonesia

expert of the baby food market, help by

scientists

Sari Husada is launching Gizikita to improve

nutrition of SEL C2&D children for healthy growth

Because today, there is no convenient offer answering all the needs in terms of

affordability, practicality and availability…

11%A

C1

D

E

C2

22%

18%

% population PCC Danone brands

23%

11%

Price index

280

180

100

70Daily spend

€1.5 to €3.2

per household

15%B

Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009

7.1kg/yr

5.6kg/yr

0.8kg/yr

Gizikita: affordable products with enhanced

nutrition

Milk powder (30g) Porridge (35g) Topping (5g)

Pregnant & lactating

women1-2 years old 2-5 years old

Fe, Vit A, Zn,Ca,

Folic Acid: 25%

Protein: 7%

Fe, Vit A, iodin, Zn, Ca: 50%

Protein: 20%

Fe, Vit A, iodin, Zn,Ca:

50%

Vitamin C: 20%

57Rp/g

66Rp/g

75Rp/g63Rp/g

120Rp/g 160Rp/g

Source = Nielsen Sept 2009

1 serving =

~7% of daily expenses (SEL C2 & D)

% recommended

daily intake

3 SKUs

A tailor-made business model building on Danone

strengths

Adapted R&D / purchasing

Nutritional ‘engine’ in a locally adapted

product matrix

addressing local prevalence of

malnutrition among children <5 yrs and

mothers

focusing on key micro nutrients

Low cost recipe

maximize the use of local raw materials

mix proteins coming from milk & soya

fortified with high quality pre-mix

Low cost packaging

single sachets

low cost filling and packing process

simple outer-boxes

Sales & Operations

A new Route-to-market to reach C2 & D

target (traditional trade) to reach an

estimated numeric distribution of 220,000

outlets in 2014

(in ‘000 of outlets)

Competitor 1

Competitor 2

Sari Husada

Any Infant Milk

Gizikita (target)

Danone Aqua 1,300

220

150

120

97

61

Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009

+80%

Adapted sales / operations

A strong and strategic education program

Gizikita

PKPU

Nutritionists

Posyandu* cadres

Mothers

1.Gizikita educational toolkit

= to educate mothers about nutritional needs during

pregnancy and lactating period, and for children <5 yrs

* Posyandu = local community health care centre

2. Validated by PKPU, a local NGO with special

status from UN ECOSOC, which also designed the

program to reach a maximum number of SEL C2 &

D mothers

3. PKPU recruits nutritionists and train them based

on Gizikita toolkit

4. Nutritionists gather local community health care

centers’ facilitators and train them

5.Facilitators educate mothers using Gizikita toolkit

and hand-out simple nutritional guidelines

Test market: Western Java

ExplorationSept - Oct 08

DevelopmentNov 08 – Feb 09

ImplementationMar - Sept 09

TestQ4 09 – Q1 10

LaunchQ2 2010

Western part of Java

Test market area

I N D O N E S I A

20 mln population

13% of the Indonesian children below 5 yrs (2.3 mln)

Education program through 25,000 local community health care centers

Indonesian Urban C2D