Name of chairman
Nestlé Investor Seminar
Nestlé Investor Seminar - Vevey June 8-9, 2006
Health, Nutrition and Wellness at Nestlé
Christiane Kuehne
2 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2006
Disclaimer
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.
3 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2006
Our vision
*Peter Brabeck-Letmathe
Blue Print for the Future, October 2001
"We want to grow from the respected and trustworthy food company that
we are known as now, into a respected and trustworthy food,
nutrition and wellness company"*
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Building on our heritage
1867: Henri Nestlécreates "Farine Lactée"
for infants, elderly and infirms
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Nestlé's approach to Nutrition, Health & Wellness
Drive the Nutrition, Health & Wellness orientation across
the Company
Strengthen our leadership position in the core nutrition
business
Nestlé Nutrition CompanyCorporate Wellness Unit
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What the Corporate Wellness Unit does . . .
• The mission: Drive the Nutrition, Health & Wellness orientation across Nestlé to deliver sustainable profitable growth.
• The strategy: Persuade consumers to prefer our brands by adding a superior Nutrition, Health & Wellness dimension to ourFood & Beverage business
• Wellness in Action is about: Accelerating the speed at which our vision and strategy transform into trust & value in the minds and hearts of consumers
• Outcome: A higher propotion of Group sales in added-value, faster growing, more profitable segments
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Most consumers see a strong link between food and their health
Datamonitor Consumer Survey, October 2004
IMPORTANT VERY IMPORTANT
0 10 20 30 40 50 60 70 80 90 100
France
Germany
ItalyHolland
SpainSweden
UK
USA
Overall
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Nutrition increasingly influencing consumer choice
0 10 20 30 40 50 60 70 80 90 100
Relative importance of motivation for main meal choice in US/Europe
Datamonitor Consumer and Industry Opinion Surveys, 2004
Healthy, nutritious
Using up ingredients
HungerQuick, easy
TasteBoredom, stress
Energy
IndulgenceComplements other food
%
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60/40+ our strategic transformation tool
To increase the nutritional value of our products but not at the
expense of taste
To communicate the taste and nutritional
advantage of our products
60/40+
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Which means…
We need to know the product "truth"– the consumer preference– the nutritional value of our product– our nutritional competitive advantage
60/40+ is the X-ray of our products
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Consumer Communication
Consumer Insights
Innovation / Renovation
60/40 Taste Assessment
Nutritional Assessment
It is also a powerful Business tool
Nutrition Profiles
Driving Growth, Market Share and EBITA
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25% of our Food & Beverage business ...
... goes through 60/40+ testing per year
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Success Story: Dairy ChinaNestlé High Calcium High Iron
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"I want to keep my body feeling young, and for this I need strong bones!"
66/34 taste preference
"With strong bones, you can face any challenge"
Improved profitability +410 bps, Business turnaround from declineto +4% MS in 10 months
Insight
60/40 Consumer Preference
NutritionalAssessment
Communication
Results
Good Nutritional Foundation
Nutritional Competitive Advantage: Calci-N for bone health
TV Commercial
Success Story: Dairy ChinaNestlé High Calcium High Iron
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Success Story: Ice Cream CanadaReal Dairy
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"I want to be able to indulge myself and my family, while still feeling like a good Mum"
68/32 taste preference
Good Nutritional Foundation
Ownership of consumer nutritional expectation through the Brand:Real Dairy
Nestlé Real Dairy took leadership from Breyers within 2 years and played a key role in the "Good For You" business
Insight
60/40 Consumer Preference
NutritionalAssessment
Communication
Results
Success Story: Ice Cream CanadaReal Dairy
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0
5
10
15
20
25
30
Apr 1
9 200
3
June
14 20
03
Aug 0
9 20
03
Oct 04
2003
Nov 29
2003
Jan
24 20
04
Mar 20
2004
May 1
5 200
4
July
10 20
04
Sept
04 20
04
Oct 30
2004
Dec 25
2004
Feb 1
9 200
5
Apr 1
6 200
5
June
11 20
05
Aug 0
6 20
05
Oct 01
2005
Nov 26
2005
Jan
21 20
06
Mar 18
2006
BNF NRD
Becoming Number One!
Launch NestlLaunch NestlééReal DairyReal Dairy
BreyersBreyersReformulationReformulation
ACNielsen Marketrack, period ending March 18,2006, $Share of Premium I/C
Success Story: Ice Cream CanadaReal Dairy
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Real Dairy Vanilla is the flagship for a "Good For You" range
With Omega 3 No sugar added
98% fat free97% fat free
Made with real fruit
Success Story: Ice Cream CanadaReal Dairy
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Success Story: Maggi FranceSveltesse
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Success Story: Maggi FranceSveltesse
" I know I should eat 5 fruits and vegetables a day, but it's not easy... "
Parity vs. regular soup (with fat)
Quick and easy vegetables on the go.
RIG +15%, MS + 0.8%
60/40 Consumer Preference
NutritionalAssessment
Great Communication
Results
Insight
Good Nutritional Foundation Nutritional Competitive Advantage: fibers
TV Commercial
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Success Story: Maggi FranceSveltesse
Print Ad
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Nestlé policies
• Nestlé Policy on the Level of trans Fatty Acids in Foods
• Nestlé Policy on the level of Sodium (Salt) in Foods
• Nestlé Policy on the level of Sugar in Foods
• Nestlé Policy on the Iron Fortification of Foods
• Nestlé Policy on Nutrient Fortification
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• Reduce sugar by 15%• New malt extraction• Increase complex carbohydrate• Same taste• Same costs
Renovation Innovation +Communication
R+D Framework+Policies+60/40+ profile
Health & Nutrition strategy in action
Nutrition Insights
Consumer Insights
Nutrition targetsÌ
Obesity concern New Milo
SugarConcern
ÌReduce sugar to meet Nutrition criteria
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Health & Nutrition strategy in action
NIDO Nurturing
ALL AGES
AGE SPECIFIC
Full Cream "All in One Growth"
"Right Taste, Right Price,
Right Nutrition"
Affordability
Children’s Health & Nutrition Solutions
NIDO Nurturing
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Optimising nutritional profiles
REDUCING SUGAR INCREASING CALCIUM
REDUCING FAT INCREASING FIBER
REDUCING SALT
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Optimising nutritional profiles -Reducing
22% reduction in 5 years.Today covers 43 different recipes
Level of sodium in soups per 100 ml 2000
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930
Sodi
um m
g
Level of sodium in soups per 100 ml 2005
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
Sodi
um m
g
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Optimising nutritional profiles -Increasing
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Adding Health Benefits
Vitality / Protection Immunity & Protection
Intestinal Health
Heart Health
Building StrongerBones
Helps EnergyRelease
Long-Lasting Energy
Growth &Development
Feeling Good,& It Shows
Long LastingAlertness
"Refuelling"Growth
Active CholesterolControl
Helps Keep Calciumin your Bones
R
EasyDigestion
Branded Active Benefits accounted for sales of CHF 2.9 Bio in 2005
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Branded Active Benefits (BAB)
BABs are registered trademarks related to specific
health benefits whose purpose is to add value to
existing Nestlé products:
Making a good Nestlé brand even better
They are always science-based
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Success Story: Powdered Beverages Philippines
Innovations to reinforce Milo as " King of Energy" have helped fuel growth in the last 5 years
1999 2002
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Increased growth, market share and EBITA
2002 2003
% Mkt Share
2005
78
2004
78
2001
71
75
77
EBITA doubled in 3 Years
+
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Our Communication Platform Principle
Encourage and Empower consumers
to make informed choices about their diet and enjoy a
more balanced life
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60/40+ Giving transparent information: the Nutritional Compass
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60/40+ Giving transparent information: the Nutritional Compass
Food
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60/40+ Giving transparent information: the Nutritional Compass
Svelty - Chile
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60/40+ Giving transparent information: the Nutritional Compass
LEAN CUISINE - Canada
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60/40+ Giving transparent information: the Nutritional Compass
MILO - Japan
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60/40+ Giving transparent information: the Nutritional Compass
NESCAFE - FoodServices
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60/40+ Giving transparent information: the Nutritional Compass
Maggi- Malaysia
Print Ad
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60/40+ Giving transparent information: the Nutritional Compass
Objective 80% of sales to have the Compass by end
2006
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JPMorgan
Going one step beyond, in our view, is Nestlé, which has redesigned its nutrition labels in a more user friendly and easier to read fashion while identifying the benefits of certain ingredients and nutrients.
We believe this certainly is the way forward for the industry."
"A number of large companies already show detailed nutrition labels on their products on a systematic basis.
Others Say ...
Obesity - Reshaping the Food industry January 2006
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Nutrition Communication -Nestlé Australia
Nestlé All Natural Yogurt
TV Commercial
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Nutrition Communication -Nestlé Australia
Excellent performance in all key areas
• Spontaneous Awareness Nestlé 7%
• Awareness as healthy nutritious food company
6% 15%• Overall weighted WELLNESS score
23% 27%• Increased Prompted awareness of “ Good Food Good Life”
……………………….in just 6 months
Sales increase in all products!
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Nutrition Communication -Nestlé Philippines
Nestlé NIDO
TV Commercial
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Talking nutrition with our customers everyday
2005: 10 million incoming calls
to our Consumer Services
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Nutrition, health & wellness at point of sale
Mexico
Philippines
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Nestlé Nutrition Council
The Nestlé Nutrition Council was founded in 1978 and is currently composed of 10 internationally-renowned scientists working in the field of nutrition
Prof. Dominique BELLI Hôpital des Enfants, Geneva, SwitzerlandProf. Bruce BISTRIAN Harvard Medical School, Boston, USAProf. Günter BLOBEL* The Rockefeller University, New York, USAProf. Michael GIBNEY Trinity College, Dublin, IrelandProf. Eric JÉQUIER Nestlé Foundation, Lausanne, SwitzerlandProf. Robert KROES Soest, The NetherlandsProf. Demetre LABADARIOS University of Stellenbosch, South AfricaProf. Tadashi NOGUCHI Chubu University, Kasugai, JapanProf. Irwin ROSENBERG Tufts University, Boston, USAProf. Bruno VELLAS University of Toulouse, France
*Professor Blobel, winner of the 1999 Nobel Prize in Physiology or Medicine,is a member of the Nestlé Board of Directors
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Nestlé Nutrition Council
The main objectives of the Nestlé Nutrition Council is to:
• Review current and developing nutritional issues related to Nestlé's business and to determine what impact they would have on the Company's nutrition policies and its strategyIncluding: obesity (1995), diabetes (1997), childhood obesity (1998), Personalising Foods for health (2003)
• Provide relevant information and continuous advice concerning Nestlé's Corporate position on nutrition
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Nestlé bringing together Science, Nutrition and the consumer
3500 people in R&D
1.6% of turnover spend on R&D
The external NRC scientific Network - 2005
103 contracts with universities
262 Scientific publications
International Nutrition Symposium '04, '05 & '06
Venture funds
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NestléResearch
Center
Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Growth & Development
Digestive Comfort
Health and Beauty Performance
Protection
Health Benefit areas
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Weight Control Healthy Aging
Growth & Development
Digestive Comfort
Protection
Health and Beauty Performance
Health Benefit areas
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Weight Control Healthy Aging
Health and Beauty
Growth & Development
Digestive Comfort
Performance
Protection
Health Benefit areas
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USA
Canada
USA
Brazil
Germany
Chile
UK
Educating Consumers
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FRANCE
Fleurbaix-Lavantie Results: Percent Increase in Obesity 1992-2000
0 %
50 %
100 %
150 %
200 %
250 %
95 %
195 %
4 % 1 %Girls
Boys
Fleurbaix-Lavantie
Nord-Pas-de-Calais
68
Educating Consumers
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Primary sponsor since 1999 – 8000 schools
Australia
School Canteens Australia
Programme for schools, community and parents
Switzerland
2,000 primary schools Thailand 1,240,000 school
children reached since1999 - Russia
Educative programme forschools -Brazil
16 hours long education programTurkey
Educating Children
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Wellness networks & implement "Wellness in Action" strategy and leverage scale
Partners:Provide strategic
input
NUTRITIONISTS:Drive Portfolio
renovation
CorporateCorporateWellnessWellness
UnitUnitZONES:
Lead strategyimplementation for
their respective markets
MARKETS:Transform the strategy
into winning actions
BUSINESS UNITS:Shape and drive the
strategy and innovation
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Our transformation is well under way
Nutrition, health and wellness is adding value to ourbusiness by:
• Responding to consumer needs by:– improving the nutritional profile of our products, but
not at the expense of taste– providing reliable nutritional information to guide
consumer choices• Building on our heritage and know-how to capture
value for the Nestlé brand
Nestlé: the right products, the right categories, the best R&D
72 Name of chairmanNestlé Investor Seminar - Vevey June 8-9, 2006
A CHF 90 billion opportunity that
• differentiates us from competitors and private label
• takes our portfolio to higher growth, higher margin segments
Nutrition, health & wellness Not just tomorrow's opportunity -
but today's reality at Nestlé
Nutrition, health & wellness at Nestlé