the consumer goods forum global summit london, june 24 2010

1

Paul Bulcke, CEO Nestlé SA

The Consumer Goods Forum Global Summit

London, June 24th 2010

Paul Bulcke, Nestle CEO, Consumer Goods Forum Global Summit, June 24, 2010

2

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

Macro trends

Food

Raw materials

Finance

Government

Consumers/People/Citizens

Implications for our Industry

Food safety and food security

Volatility, high energy costs

Volatility, inflation

Regulations

Have an opinion/voice

The VUCA World Volatility, Uncertainty, Complexity, Ambiguity


4

Trends - % of GDP growth next 10 years

Developed 30%


Emerging 70%

5

Major ChallengesHealth-related:• Under-, over-, malnutrition

(micro nutrient deficiencies, obesity, diabetes, ….)• Less physical exercise• Aging populations• Increasing health costs

Development-related:• Agriculture, rural poverty• Hunger: additional 200 million people since 1995• Food security and demographics

Environment-related / Sustainability:• Water• Energy• Climate change


6

Creating Shared Value - Nestlé’s basic business philosophy

Creating Shared ValueNutrition | Water | Rural Development

Compliance

Sustainability

• Businesses can only be successful in long term by creating value for Shareholders and Society

• CSV embedded in all we do• Goes beyond Sustainability


7

Nutrition Water Rural Development

CSV – 3 priority areas


8

Nutrition - Micro nutrient deficiencies worldwide

WHO, 2007

Anemia (Iron Deficiency) in pre-school children

Risk of Zinc Deficiency in populationVitamin A Deficiency in pre-school children

Iodine Deficiency in school children

WHO, 2008

Food & Nutr Bulletin, 2004

WHO, 2007


9

Nutrition - Nestlé fortified affordable milksAvailable in 60 Countries in 2009(up from 40 in 2008: projection 70 by end 2010)

Micro nutrient-fortified Nestlé products

Iron: 44 bio servings

Iodine: 94 bio servings

Vitamin A: 29 bio servings

Zinc: 13 bio servings


10

94% of MAGGI volumes* are fortified with iodine - 90 bio servings*Bouillons, seasonings, noodles, fixes

Nutrition - Micro nutrient fortification of Maggi


1.3 Bio iodized

servings

15 Bio iodized

servings

4 Bio iodized

servings

10 Bio iodized

servings

32 Bio iodized

servings

27 Bio iodized

servings

Iodine fortification

Seasoning India (Vit.A, Iron, Iodine)

Noodles Malaysia(Iron, Iodine)

Noodles India (Iron, Iodine)

Seasoning dispenser Turkey (Iron, Iodine)

MAGGI now addressing other deficiencies (Iron, Vitamin A)

New launches (Iron / Vit.A)

11

Nutrition - Obesity Issue: risk for life expectancy


12

Nutrition - Enhancing knowledge and awareness


Our goal: improve school-age children knowledge of nutrition and healthy lifestyles

In partnerships with governments, NGOs, academia

Objective: implement Healthy Kids in all countries where we operate directly by end 2011

Obesity: serious global health challenge

Developing countries face double burden: obesity and malnutrition

13

Water – will scarcity trigger global food crisis?

If present trends continue the livelihoods of one third of the world’s population will be affected by water scarcity by 2025. We could be facing annual losses equivalent to the entire grain crops of India and the US combined.

Frank Rijsberman, Director General International Water Management Institute


http://dlc.dlib.indiana.edu/DLCImage/images/Mali2006-303-full.jpg

14

3100

4500

800

1500

600

900

0

2000

4000

6000

2009 2030

Households

Industry

Agriculture

Source: McKinsey & 2030 Water Resources Group: Charting our future water needs. A new economic framework to decision making – November 2009

km³

13%

18%

69%

Water – agriculture uses around 70% of freshwater withdrawals


15

Water – reducing Nestlé usage

Water withdrawal down 58% 1999-2008, 6% per tonne of product year on year

From more than more than 5 L to less than 1.6 L per dollar of sales


16

Water – engaging with farmers

Example: drip irrigation coffee project, Nicaragua

Partnership with ECOM, Rainforest Alliance and IDE

Support to 1,500 farmers

Aim to accelerate plant growth and achieve better quality crops


17

Water – leadership on water issues

UN Global Compact CEO Water Mandate

WEF Water Task Force

2030 Water Resources Group (IFC, McKinsey, private industry)


18

Rural development - people engagement

460 factories worldwide – half in developing countries

600 000 farmers supply Nestlé directly and receive technical assistance

170 000 farmers & suppliers trained through special capacity building programmes

CHF 50 million microcredit made available to agricultural suppliers in 2009

3.4 million people in developing countries earn livelihoods from Nestlé’s supply chain


19

Rural development – raw materials

CHF 20.4 billion of raw materials purchased in 2009

40% of Nestlé’s raw materials expenditure goes towards the procurement of milk, coffee, and cocoa

• Milk: 2.18 million tonnes

• Coffee: 0.78 million tonnes

• Cocoa: 0.35 million tonnes


20

Partnerships


http://www.rainforest-alliance.org/

http://www.fairtrade.org.uk/

21

The global network for serving shopper and consumer needs


22

Our engagement with industry & trade associations

Global

Regional

Local

The Consumer Goods ForumGS1

Industry & Trade Collaborative Platforms (ECR Europe, ECR Asia Pacific, ECR LATAM, etc.)

Manufacturer Associations (GMA, AIM, CIAA, FCPC, etc)

Industry & Trade Collaborative Platforms (ECR Nationals)

Manufacturer Associations

“Doing Good by Doing Well” Spirit: Industry and Trade Associations, the vehicle for Manufacturers and Retailers to address together common issues and conflicts, align, develop and implement common best practices.


23

The Consumer Goods Forum’s strategic pillarsEmerging

Trends SustainabilityHealth & Wellness

KnowledgeSharing

Social Comp-liance

GFSI Global Summit

2020 Future Value Chain

Future Leaders

Packaging Metrics

Consumer & Climate Change

Health & Wellness

Operational ExcellenceNew Ways of Working Together

Focus on Consumer

Connect Business:

PrepareOur

People:

Share our Supply Chain:

Shopper-centric

Marketing

Information Sharing

Rewards & Recognition

Futur Supply Chain

IT Org. Structure

GUSI

DSD

Global Scorecard


24

The Consumer Goods Forum’s strategic pillarsEmerging

Trends SustainabilityHealth & Wellness

KnowledgeSharing

Social Comp-liance

GFSI Global Summit

2020 Future Value Chain

Future Leaders

Packaging Metrics

Consumer & Climate Change

Health & Wellness

Operational ExcellenceNew Ways of Working Together

Focus on Consumer

Connect Business:

PrepareOur

People:

Share our Supply Chain:

Shopper-centric

Marketing

Information Sharing

Rewards & Recognition

Futur Supply Chain

IT Org. Structure

GUSI

DSD

Global Scorecard


Doing good by doing well - collectively – will enable us to create value for:

Our consumers and shoppers

Our industry and our stakeholders

Society

25 Paul Bulcke, Nestle CEO, Consumer Goods Forum Global Summit, June 24, 2010

the consumer goods forum global summit london, june 24 2010

Documents