Nestle in Russia:
10 Years of Growth
Russian Economic and Financial
Forum in Switzerland
Fifth Session
13 March 2006
Zurich, Switzerland
Bernard Meunier
CEO, Nestlé Food LLC
DO YOU KNOW?
• Which country has the largest consumption
of soluble coffee in the world?
• Which is the second largest consumption market
of chocolate
confectionery
after
USA
To all 3and
questions
the
answer
is -
RUSSIA
• Which country has experienced the fastest
growth in premium positioned food and
beverages in the last 5 years?
Bernard Meunier, Russian Economic and Financial Forum in Switzerland
March 13, 2006
2
2006 IS A MILESTONE YEAR FOR
NESTLE RUSSIA
Bernard Meunier, Russian Economic and Financial Forum in Switzerland
March 13, 2006
3
10 YEARS ANNIVERSARY OF OUR
OPERATING COMPANY NESTLÉ
FOOD LLC
12 Production
Facilities
9.500
Employees
12 Regional
Offices
1996
Foundation of
Nestlé Food LLC
2006
1.4 billion CHF
Sales
600 billion CHF
investments
FUTURE
Bernard Meunier, Russian Economic and Financial Forum in Switzerland
March 13, 2006
LIFECYCLES OF NESTLE RUSSIA
Opening years:
Nestlé starts export
of Nuts and Nescafe to Russia
1994
Acquisition of Rossia factory
in Samara
1996
Acquisition of Kamskaya
and Altay confectionery factories
Economical crisis in Russia
2002
Infant cereals factory
In Vologda was acquired
1992
Nestlé opens first
representative office in Moscow
1995
Foundation of Nestlé Food LLC
1998
Nestlé in Russia turnover –
1 billion CHF
2003
5
LIFECYCLES OF NESTLE RUSSIA
OTHER IMPORTANT STEPS
• 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
• And shortly after (in February 2003), “Clear
Water”, a leader in home and office water delivery.
6
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
7
OUR OPERATIONS
COVER
MOST
Nestlé
in Russia
REGIONS OF RUSSIA
•
Lviv
St.Peterburg
•
•
•
Voronezh
Vologda
Moscow
•
Zhukovsky
Perm
N. Novgorod
Samara
Rostov - Don
Timashevsk
•
Ekaterinburg
••
Kemerovo
Factory + DC + Sales Office
Novosibirsk
Barnaul
Factory + DC
Factory
Regional Sales Offices
10,000 km
•
Irkutsk
•
Vladivostok DC
NESTLÉ IS NOW IN RUSSIA:
•
•
•
•
•
•
•
•
#1
#1
#1
#1
#1
#1
#2
#2
in
in
in
in
in
in
in
in
soluble coffee market with
chocolate market with
and
infant nutrition with
culinary aids with
breakfast cereals with
mineral water with
ice Cream with
pet food with
9
TASTE, BRAND AND HEALTH
ARE MOST IMPORTANT
FOR RUSSIAN CONSUMERS
Taste 67,3%
Product Brand 59%
Health 54%
Price 52%
Labels/Packaging 39%
Convenience 27%
Other 6%
0
20
40
60
80
Health becomes a major factor in product choice....
Source: Nestlé Consumer Services
Survey of nearly 3,000 consumers
10
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
11
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
12
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
13
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
14
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 Nutrition Nestlé develops 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
15
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
16
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
17
Thank you for your attention!
Bernard Meunier, Russian Economic and Financial Forum in Switzerland
March 13, 2006
18