Why NescaféDolce Gusto ?
1 NestléInvestor Seminar 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.
2 NestléInvestor Seminar Consumers WW looking for versatility, quality and convenience
A desire for more choice
A desire for betterquality
A desire for more convenience
Consumers have the right to be lazy and demanding at the same time
3 NestléInvestor Seminar The coffee market is changing fast WW trends are emerging
From To
4 NestléInvestor Seminar There was a gap in the market
High pressure
Nespresso NDG Full Automat
Black coffee Long Multi bev. Brew systems cups systems Senseo Keurig Tassimo Drip filter
Black cups high pressure White cup specialty coffee coffee type Low pressure type & non-coffee bev. 5 NestléInvestor Seminar We have the best technology
6 NestléInvestor Seminar Unique proprietary technology Give us an incredible competitive edge
Customised extraction pressure
Espresso: 6 bar Lungo: 3 bar Technical advantage Milk: <1 bar Variable temperature
Direct Flow
Choice (from espresso to brew cup), Consumer Benefit convenience, less cleaning, Quality
7 NestléInvestor Seminar Exceptional performance in 60/40
• Chococinovs. Tassimo: 93/07
• Cappuccino vs. Tassimo: 73/27
• Latte macchiato vs. Tassimo: 68/32
• LungoMild vs. Tassimo: 64/36
• Espresso vs. Tassimo: 59/41
• Lungovs. Tassimo: 58/42
8 NestléInvestor Seminar What have we built so far
9 NestléInvestor Seminar 1 strongconcept supportedby…
Coffee-shop coffees @ home
10 NestléInvestor Seminar …a machine range like no other…
• Design • Cost • Functionalities
11 NestléInvestor Seminar …a range of 22 recipes of superior quality… B l ac k C o ff ee
• Moment • Target • Need State I n d ul g e nt C old M o r n i ng
12 NestléInvestor Seminar …a strong and modern brand visual identity…
13 NestléInvestor Seminar …unique brand personality …
14 NestléInvestor Seminar …a big business…
By the end of 2010: #1
• Roll-out in 36 markets
#2 •Close to 5 Millions machines sold to the trade
•2’000’000 registered consumers #3
•4TH system WW already ahead of Tassimo.
# 4
#5
15 NestléInvestor Seminar ...our business grows from the base (the key markets)...
Markets Launch Share of % evol. Year Business ´08 vs.´09
Wave1 2006 39% +36% Wave2 2007 51% +58% Wave3 2008 8% +183% Wave4 2009 2% +318%
16 NestléInvestor Seminar ... and a new ambition for Nescafé
Convenience = Superior Personalisation Quality By the cup
17 NestléInvestor Seminar ü We are strong on the key drivers of this business Get People to upgrade Superior • 70/30 superiority quality àvs. competition àusual coffee solution
• Variety à Recipes Convenienc • By the cup Choice àCapsule e • Cleanliness àDirect flow
àDesign
18 NestléInvestorSeminar How do we Operate ?
19 NestléInvestor Seminar A unique route to market
Tutbury WiKChina SEB / De Longhi Girona Machine Machine Coffee production distribution production
Specialised Food Food Retail Retail Retail
20 NestléInvestor Seminar A centralized model in a decentralized organisation
A hybrid business àthe best of both world
• A Central team (to contain complexity and cost): Global Strategy, System I/R, Partnership management Global Operations.
• Role of the market is local implementation, flawless execution and ultimately P&L responsibility
21 NestléInvestor Seminar How do we see the Future
22 NestléInvestor Seminar Our vision CHF 1 Billion business
2006 2007 2008 2009 2010 2011 2012 2013 2014
NPS
(mio CHF)
295 197 6 66
23 NestléInvestor Seminar Key Learning
• Breakthrough innovation drives growth even in the most mature businesses.
• It can also create huge value in otherwise commoditised markets
• Nescaféwill find a new dimension thanks to NescaféDolce Gusto
• Combining centralised with decentralised approaches accelerated growth much faster than using either of the two separately.
• The quality of the partnership is critical for success
24 NestléInvestor Seminar