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Leading the world of coffeeDavid RennieHead of Beverages SBU1
DisclaimerThis presentation contains forward looking statements which reflectManagement’s current views and estimates. The forward lookingstatements involve certain risks and uncertainties that could causeactual results to differ from those contained in the forwardlooking statements. Potential risks and uncertainties include suchfactors 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 believesthat these non-IFRS measures provide additional useful information to assess the financial and operational performanceof the Group. Such measures may not be comparable to similar measures presented by other companies and are explainedand/or reconciled with our IFRS measures (Consolidated Financial Statements) in the Nestlé Group Alternative PerformanceMeasures (APMs) document available on our Investor Website.2 May 7, 2019 Nestlé Investor Seminar 2019
Coffee is a dynamic and growing categoryA fast-growing category(Value growth 2016-2018, CHF bn)Significant category growthopportunities to target in next 5 yearsPortioned5%370RTD*CHF 4.5 bnCAGR 8%SolubleCHF 3.5 bnCAGR 3%33390Retail83 4% CAGR250Premium R&Gand Whole BeansCHF 1 bnCAGR 6%WorkplaceCHF 12 bnHotelsCHF 4 bnCAGR 3%280OOH 6% CAGR20162018* Excluding RTD Japan3 May 7, 2019 Nestlé Investor Seminar 2019CHF 5 bnCAGR 5%CAGR 5%
2. STRATEGIC DIRECTIONWith the three most iconic coffee brands, Nestlé now has the bestportfolio to delight consumers around worldThe world’s preferred coffeebrandLeading premium portionedcoffee brandThe iconiccoffee shop brandMainstream, everyday premium,approachable, versatile, universalThe everyday affordable luxury,stylish, European flair, undisputedsuperior qualityAmerican lifestyle, long cup,indulgent, convivial, innovative4 May 7, 2019 Nestlé Investor Seminar 2019
5Nestlé leads the global Coffee category#1 coffee companyEstimated coffee salesTop 3 players (2018, CHF bn)#1 category for the GroupReported Nestlé sales 2018, CHF bn#2 in US with StarbucksUS retail coffee market 201818.72.116.412.21.0 Coffee Shops2.6 Foodservice81%19%2018Nestlé sales including Starbucks pro formaSource: Nestle data and estimates of coffee sales5 May 7, 2019 Nestlé Investor Seminar 2019Others9%JAB11%Kraft Heinz16%Nestlé Starbucks19%SmuckersOther categories16.6Retail8.645%Coffee
5 strategic growth imperativesStrengthenour core business6 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
5 strategic growth imperativesStrengthenour core business7 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
Origins to reinforce our coffee authenticity and superiority8 Nescafé Gold OriginsMaster OriginsNescafé Dolce GustoAbsolute Origins18 markets, 2018-2019Global, September 2018Global, March 2018-2019May 7, 2019 Nestlé Investor Seminar 2019
Bringing new sensory experiences to coffee lovers9Offering the first solubleplant-based mixesIndulgent milk & cold basedexperiencesCoffee shop inspired rangesNescafé plant-based mixesNespresso Barista CreationsNescafé Dolce Gusto Flat WhiteEMENA & LATAM, July 2019Global, April 2019Global, Sept. 2018 May 7, 2019 Nestlé Investor Seminar 2019
Driving sustainability as a competitive advantageReviving high-quality coffeeproduction in regions where itwas under threat10 Engaging with consumers onour coffee sourcing practicesLeading on responsiblealuminum sourcing & recyclingNespresso revivalGrown RespectfullyCaran d’Ache2019Global campaign 2018June 2018May 7, 2019 Nestlé Investor Seminar 2019
5 strategic growth imperativesStrengthenour core business11 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
Leverage patented technology to make the difference in the cupDeliveringsuperior tasteOffering healthier and moresustainable choicesPatentProprietary in-housemanufacturing of Cold Brew12 May 7, 2019 Nestlé Investor Seminar 2019PatentIndulgent mixeswith reduced fats & sugarLeadingnew trendsPatentConnectivity for enhanced personalizedcoffee experience
Create gaps in machine design and functionalityUpgrading the long cupcoffee experience13 Connected system for fullpersonalizationOn-the-go coffeesmart mugNespresso VertuoNescafé Dolce Gusto EspertaÉ by NescaféGlobalGlobal, March 2019India, Oct. 2018May 7, 2019 Nestlé Investor Seminar 2019
5 strategic growth imperativesStrengthenour core business14 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
Continue to create competitive gaps in Asia15 ChinaASEANJapan#1 in ChinaNescafé Cold brew#1 in ASEAN#1 in Japan(Take Home)May 7, 2019 Nestlé Investor Seminar 2019
A focused strategy to grow fast in the US16AuthenticitySensory experiencesHealthy lifestylesChameleon Cold Brewwith organic milkCold Whipped LatteCoffee Protein SmoothieUS, 2018US, Jan. 2019US, Jan. 2019 May 7, 2019 Nestlé Investor Seminar 2019
5 strategic growth imperativesStrengthenour core business17 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
Incremental 50 bn cup opportunity to target in 5 priority channelsWorkplace18 May 7, 2019 HotelNestlé Investor Seminar 2019ConvenienceTravelEducation
Coffee shop experienceEnriching consumers’ experiences with our 3 leading brandsBranded solutionsBeans solutionsCombi solutions(soluble R&G)Soluble only solutionsPortioned solutionBasic19 May 7, 2019 Nestlé Investor Seminar 2019Premiumization
Create customer value and enrich consumer experiencesConnected system withintegrated telemetry,dispenser & payment20Re-defining experience forBringing Starbucks experienceself-served / paid consumptionto offices and hotelsNespresso MomentoNescafé CornerWe proudly serve StarbucksGlobal, 2019China, Malaysia, Turkey, France, 2018Accelerated rollout China & Brazil, 2019 May 7, 2019 Nestlé Investor Seminar 2019
5 strategic growth imperativesStrengthenour core business21 May 7, 2019 Leadin innovationNestlé Investor Seminar 2019Embracethe cold opportunityAcceleratein OOHDeliverthe Starbucks plan
We have built a unique coffee portfolio with the Starbucks dealWe have acquired asuccessful USD 2 bnbusiness 22 May 7, 2019 Nestlé Investor Seminar 2019and licensed in perpetuityand globally the Starbucksbrands in all CPG formats excl. RTD& all OOH channels
We have moved fast – from acquisition to launch in 6 monthsAugustJuly - Sept.Sept. - NovemberMarch 2019Deal closedPriority markets &launch range agreedLaunch plan approvalLaunchProducts validated23 May 7, 2019 Nestlé Investor Seminar 2019
Expanding fast in new formats and new marketsStarbucks by Nespresso24 May 7, 2019 Nestlé Investor Seminar 2019Starbucks by Nescafé Dolce GustoStarbucks R&G and WB
Continue to win in the US25 AuthenticitySensory experiencesHealthy lifestylesPremium selectCold brew pitcher packsPlus K-Cups2019Sept. 20182018-2019May 7, 2019 Nestlé Investor Seminar 2019
Starbucks coffee is coming home26 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 growth27 May 7, 2019 Nestlé Investor Seminar 2019
Coffee Protein Smoothie US, Jan. 2019 Authenticity Sensory experiences Healthy lifestyles Chameleon Cold Brew with organic milk US, 2018 16 May 7, 2019 Nestlé Investor Seminar 2019. Strengthen our core business Accelerate in OOH Deliver the Starbucks plan Lead in innovation Embrace .
