Leading the world of coffee
David Rennie Head of Beverages SBU
1 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 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.
This presentation contains certain financial performance measures which are not defined by IFRS. Management believes that these non-IFRS measures provide additional useful information to assess the financial and operational performance of the Group. Such measures may not be comparable to similar measures presented by other companies and are explained and/or reconciled with our IFRS measures (Consolidated Financial Statements) in the Nestlé Group Alternative Performance Measures (APMs) document available on our Investor Website.
2 | May 7, 2019 | Nestlé Investor Seminar 2019 Coffee is a dynamic and growing category
A fast-growing category Significant category growth (Value growth 2016-2018, CHF bn) opportunities to target in next 5 years
Portioned CHF +5 bn 5% 370 CAGR +5%
RTD* CHF +4.5 bn CAGR + 8% 333
90 Soluble CHF +3.5 bn CAGR +3%
Premium R&G Retail 83 CHF 1 bn +4% CAGR and Whole Beans CAGR +6%
Workplace CHF +12 bn 280 CAGR +5% 250 OOH +6% CAGR Hotels CHF +4 bn CAGR +3% 2016 2018 * Excluding RTD Japan 3 | May 7, 2019 | Nestlé Investor Seminar 2019 2. STRATEGIC DIRECTION With the three most iconic coffee brands, Nestlé now has the best portfolio to delight consumers around world
The world’s preferred coffee Leading premium portioned The iconic brand coffee brand coffee shop brand
Mainstream, everyday premium, The everyday affordable luxury, American lifestyle, long cup, approachable, versatile, universal stylish, European flair, undisputed indulgent, convivial, innovative superior quality
4 | May 7, 2019 | Nestlé Investor Seminar 2019 5 Nestlé leads the global Coffee category
#1 coffee company #1 category for the Group #2 in US with Starbucks
Estimated coffee sales Reported Nestlé sales 2018, CHF bn US retail coffee market 2018 Top 3 players (2018, CHF bn)
18.7 2.1 16.4 45% Others
Other categories 12.2 81% 1.0 Coffee Shops 9% JAB 2.6 Foodservice 16.6 11% Kraft Heinz
Retail 16% Nestlé + Starbucks 8.6 19% Coffee 19% Smuckers
2018
Nestlé sales including Starbucks pro forma Source: Nestle data and estimates of coffee sales
5 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
6 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
7 | May 7, 2019 | Nestlé Investor Seminar 2019 Origins to reinforce our coffee authenticity and superiority
Nescafé Gold Origins Master Origins Nescafé Dolce Gusto Absolute Origins 18 markets, 2018-2019 Global, September 2018 Global, March 2018-2019
8 | May 7, 2019 | Nestlé Investor Seminar 2019 Bringing new sensory experiences to coffee lovers
Offering the first soluble Indulgent milk & cold based Coffee shop inspired ranges plant-based mixes experiences
Nescafé plant-based mixes Nespresso Barista Creations Nescafé Dolce Gusto Flat White EMENA & LATAM, July 2019 Global, April 2019 Global, Sept. 2018
9 | May 7, 2019 | Nestlé Investor Seminar 2019 Driving sustainability as a competitive advantage
Reviving high-quality coffee Engaging with consumers on Leading on responsible production in regions where it our coffee sourcing practices aluminum sourcing & recycling was under threat
Nespresso revival Grown Respectfully Caran d’Ache 2019 Global campaign 2018 June 2018
10 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
11 | May 7, 2019 | Nestlé Investor Seminar 2019 Leverage patented technology to make the difference in the cup
Delivering Offering healthier and more Leading superior taste sustainable choices new trends Patent Patent Patent
Proprietary in-house Indulgent mixes Connectivity for enhanced personalized manufacturing of Cold Brew with reduced fats & sugar coffee experience
12 | May 7, 2019 | Nestlé Investor Seminar 2019 Create gaps in machine design and functionality
Upgrading the long cup Connected system for full On-the-go coffee coffee experience personalization smart mug
Nespresso Vertuo Nescafé Dolce Gusto Esperta É by Nescafé Global Global, March 2019 India, Oct. 2018
13 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
14 | May 7, 2019 | Nestlé Investor Seminar 2019 Continue to create competitive gaps in Asia
China ASEAN Japan
#1 in China #1 in ASEAN #1 in Japan Nescafé Cold brew (Take Home)
15 | May 7, 2019 | Nestlé Investor Seminar 2019 A focused strategy to grow fast in the US
Authenticity Sensory experiences Healthy lifestyles
Chameleon Cold Brew Cold Whipped Latte Coffee Protein Smoothie with organic milk US, 2018 US, Jan. 2019 US, Jan. 2019
16 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
17 | May 7, 2019 | Nestlé Investor Seminar 2019 Incremental 50 bn cup opportunity to target in 5 priority channels
Workplace Hotel Convenience Travel Education
18 | May 7, 2019 | Nestlé Investor Seminar 2019 Enriching consumers’ experiences with our 3 leading brands 19 Coffee shop experience | May 7, 2019 | Nestlé Investor Seminar 2019SeminarInvestor Nestlé | May20197, | Basic Soluble only solutions Soluble only Combi (soluble (soluble + R&G) solutions Beans solutions solutions Beans Portioned solution Premiumization Branded solutions Branded Create customer value and enrich consumer experiences
Connected system with Re-defining experience for Bringing Starbucks experience integrated telemetry, self-served / paid consumption to offices and hotels dispenser & payment
Nespresso Momento Nescafé Corner We proudly serve Starbucks Global, 2019 China, Malaysia, Turkey, France, 2018 Accelerated rollout China & Brazil, 2019
20 | May 7, 2019 | Nestlé Investor Seminar 2019 5 strategic growth imperatives
Strengthen Lead Embrace Accelerate Deliver our core business in innovation the cold opportunity in OOH the Starbucks plan
21 | May 7, 2019 | Nestlé Investor Seminar 2019 We have built a unique coffee portfolio with the Starbucks deal
We have acquired a and licensed in perpetuity in all CPG formats excl. RTD successful USD 2 bn and globally the Starbucks & all OOH channels business… brands…
22 | May 7, 2019 | Nestlé Investor Seminar 2019 We have moved fast – from acquisition to launch in 6 months
August July - Sept. Sept. - November March 2019
Deal closed Priority markets & Launch plan approval Launch launch range agreed
Products validated
23 | May 7, 2019 | Nestlé Investor Seminar 2019 Expanding fast in new formats and new markets
Starbucks by Nespresso Starbucks by Nescafé Dolce Gusto Starbucks R&G and WB
24 | May 7, 2019 | Nestlé Investor Seminar 2019 Continue to win in the US
Authenticity Sensory experiences Healthy lifestyles
Premium select Cold brew pitcher packs Plus K-Cups 2019 Sept. 2018 2018-2019
25 | May 7, 2019 | Nestlé Investor Seminar 2019 Starbucks coffee is coming home
26 | May 7, 2019 | Nestlé Investor Seminar 2019 Key takeaways
• Nestlé #1 globally with the 3 leading brands
• Significant growth opportunities across brands, channels and markets
• Leading innovation capabilities and strong pipeline
• Moving at speed to capture the growth
27 | May 7, 2019 | Nestlé Investor Seminar 2019