Nestle in Russia: 10 Years of Growth

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Nestle in Russia 10 Years of Growth

• Bernard Meunier
• CEO, Nestlé Food LLC

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DO YOU KNOW?

• Which country has the largest consumption
• of soluble coffee in the world?

• Which is the second largest consumption market of
  chocolate and confectionery after USA

To all 3 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
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2006 IS A MILESTONE YEAR FOR NESTLE RUSSIA
Bernard Meunier, Russian Economic and Financial
Forum in Switzerland March 13, 2006
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10 YEARS ANNIVERSARY OF OUR OPERATING COMPANY
NESTLÉ FOOD LLC
12 Production Facilities
9.500 Employees
12 Regional Offices
1996
2006
FUTURE
Foundation of Nestlé Food LLC
600 billion CHF investments
1.4 billion CHF Sales
Bernard Meunier, Russian Economic and Financial
Forum in Switzerland March 13, 2006
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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
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OTHER IMPORTANT STEPS
LIFECYCLES OF NESTLE RUSSIA

• In 2001, Cereal Partners Worldwide, Nestlés
• 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.

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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
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OUR OPERATIONS COVER MOST REGIONS OF RUSSIA
Nestlé in Russia

• St.Peterburg

Lviv
Vologda

• Moscow

Perm
Zhukovsky

• 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
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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

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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
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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
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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
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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
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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
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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
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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
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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
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• Thank you for your attention!

Bernard Meunier, Russian Economic and Financial
Forum in Switzerland March 13, 2006