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Nestle in Russia: 10 Years of Growth

Nestle in Russia: 10 Years of Growth. Bernard Meunier CEO, Nestlé Food LLC. Russian Economic and Financial Forum in Switzerland Fifth Session 13 March 2006 Zurich, Switzerland. DO YOU KNOW?. Which country has the largest consumption of soluble coffee in the world?.

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Nestle in Russia: 10 Years of Growth

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  1. Nestle in Russia: 10 Years of Growth Bernard Meunier CEO, Nestlé Food LLC Russian Economic and Financial Forum in Switzerland Fifth Session13 March 2006Zurich, Switzerland

  2. DO YOU KNOW? • Which country has the largest consumption • of soluble coffee in the world? • Which country has experienced the fastest growth in premium positioned food and beverages in the last 5 years? • Which is the second largest consumption market of chocolate and confectionery after USA To all 3 questions the answer is - RUSSIA Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  3. 2006 IS A MILESTONE YEAR FOR NESTLE RUSSIA Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  4. 10 YEARS ANNIVERSARY OF OUR OPERATING COMPANY NESTLÉ FOOD LLC 12 Production Facilities 9.500 Employees 12 Regional Offices 2006 1996 FUTURE Foundation of Nestlé Food LLC 1.4 billion CHF Sales 600 billion CHF investments Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  5. LIFECYCLES OF NESTLE RUSSIA Opening years: Nestlé starts export of Nuts and Nescafe to Russia 1992 Nestlé opens first representative office in Moscow 1994 Acquisition of Rossia factory in Samara 1995 1996 Foundation of Nestlé Food LLC Acquisition of Kamskaya and Altay confectionery factories Economical crisis in Russia 1998 Nestlé in Russia turnover – 1 billion CHF 2002 Infant cereals factory In Vologda was acquired 2003

  6. OTHER IMPORTANT STEPS LIFECYCLES OF NESTLE RUSSIA • And shortly after (in February 2003), “Clear Water”, a leader in home and office water delivery. • In 2001, Cereal Partners Worldwide, Nestlé’s • joint venture with General Mills, acquired a • breakfast cereal plant in Perm. • In 2002 Nestlé Waters acquired the Kostroma based • “Saint Springs” bottled water company

  7. NOVEMBER 2005: NESTLÉ OPENS THE 1ST FULL CYCLE COFFEE FACTORY IN SOUTH RUSSIA • $120 million investment • Only 18 months of construction works • 12,000 tons of NESCAFE Classic production plan for 2006 - 18,000 for 2007 • Increase of market share from the current 40% to a target of 50%. Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  8. OUR OPERATIONS COVER MOST REGIONS OF RUSSIA Nestlé in Russia Lviv • St.Peterburg Vologda • Moscow Zhukovsky Perm • Voronezh • N. Novgorod Samara • Rostov - Don Timashevsk • Ekaterinburg • Kemerovo • Irkutsk • Novosibirsk Factory + DC + Sales Office Factory + DC Factory Regional Sales Offices Barnaul • Vladivostok DC 10,000 km

  9. NESTLÉ IS NOW IN RUSSIA: • #1 in soluble coffee market with • #1 in chocolate market with and • #1 in infant nutrition with • #1 in culinary aids with • #1 in breakfast cereals with • #1 in mineral water with • #2 in ice Cream with • #2 in pet food with

  10. Taste 67,3% Product Brand 59% Health 54% Price 52% Labels/Packaging 39% Convenience 27% Other 6% 0 20 40 60 80 TASTE, BRAND AND HEALTH ARE MOST IMPORTANT FOR RUSSIAN CONSUMERS Health becomes a major factor in product choice.... Source: Nestlé Consumer Services Survey of nearly 3,000 consumers

  11. CONSUMER AT THE CENTER OF OUR ATTENTIONS • Nestlé strives to meet consumers needs in all 3 factors • Brands: by building strong brands relevant • for the Russian consumer Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  12. CONSUMER AT THE CENTER OF OUR ATTENTIONS • Nestlé strives to meet consumers needs in all 3 factors • Taste: by developing the best tasting products • with a preference over our competitors Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  13. CONSUMER AT THE CENTER OF OUR ATTENTIONS Nestlé strives to meet consumers needs in all 3 factors • Health: by developing healthier and more nutritious recipes Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  14. NESTLE AND THE COMMUNITY “To us, Corporate Social Responsibility is not something that is imposed from the outside, but is an inherent part of the Nestlé business strategy and Nestlé business principles, which guide the way we operate”. P.Brabeck-Letmathe CEO Nestlé S.A. Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  15. NESTLE AND THE COMMUNITY • Since 1996 Nestlé is the main sponsor of the Russian version of Sesame Street • Since 2000 together with Russian Institute of NutritionNestlédevelops and publishes “Good Nutrition Program” 27 Russian regions, 5.000 schools $2 million investment in next 4 years 1.2 million children Since 5 years Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  16. NESTLÉ IS A RELIABLE PARTNER FOR THE AUTHORITIES In a nutshell, our constructive dialogue with the Russian Government and Russian society has clear and undisputable benefits for both sides. Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  17. OUR VISION To be the best and most admired Food, Beverage, Nutrition, Health and Wellness company in Russia Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

  18. Thank you for your attention! Bernard Meunier, Russian Economic and Financial Forum in Switzerland March 13, 2006

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