2009.11.11 - Nestlé Waters Pres to Investors - J.Harris ... · uncertainties that could cause...

The Future of Bottled WaterJohn J. Harris – CEO NW Group

November 2009

John J. Harris - CEO Nestlé Waters - November 2009 1

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 products and pricing pressures and regulatory developments.


The Bottled Water controversyHow do we respond?

HealthDrinking wateris the healthiesthydration choice

QualityHighlight differentiationbetween Tap & Bottled

water

Envirt

Defuse theenvironmental

controversy

Consumers5 Golden Rulesimplementation

Customers

Investors

Communities

Internal Comm°Employees

Key OpinionLeaders

Policy MakersProfessional Associations

Media & Blogs

Face-to-facereassurance


Evolution of media coverage

• Number of negative articles on Bottled Water

Source: Cones

525

628

300

2007 2008 2009

- 52%


Evolution of media coverage

• Other beverages categories under pressure in 2009

Source: NHC Agency

CSD &OBESITY

Media Coverage

TAP &QUALITYISSUES

48

125

75

2943

53 49 54

17

43 3918

56 61 56

123

Q4 - 2007 Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009 Q3 - 2009

Negative BW and EnvironmentNegative TW Quality issues

Source: Cones / Press Index

BW: Bottled Water; TW: Tap Water


Environment is not our weaknessHydration, a tiny daily impact

31% 36%

24% 22%

22% 16%3% 3%

12% 14%

8% 9%

GHG emissions Energy

Others

Consuming goods & services

Drinking

Eating

Individual Transport

Housing

Source: Ecointesys - 2009

European consumer


15%1%

0,80%

21%62%

Ventes

Environment is not our weaknessBottled water, a highly visible waste, but…

Source: ADEME – Ecoemballages (2004)

Total Waste produced in France849 Million tons

374Mt

343Mt

90Mt

Other regular household garbage

Other packaging

Garden refuse & bulky

Other PET packaging

PET Bottled Water

i.e. 0.03% of the total waste stream in France

HOUSEHOLD WASTE28 Million tons (3.3%)

14 Mt

Agriculture

Building

IndustryMunicipalities

28 Mt


Environment is not our weaknessBottled water is only a tiny part of our waste stream …

that is not a waste

üAlthough very visible, bottled water accounts actually for only a very tiny part of the waste stream produced in a country

üPET is 100% recyclable

üIn contrast to other waste and plastics, PET benefits from developed and efficient recycling channels

üA recycled PET bottle reduces up to 50% its environmental footprint in relation to one that is not.

üNestle Waters strives to raise awareness among its consumers and to develop waste collection initiatives worldwide to increase the rates of recycled PET


Bottled water has the lowest carbon footprint of packaged beverages

Life Cycle AssessmentCarbon Footprint of drinking 1 L of…

(in eq. g CO2)

x 1.5

x 2.5

x 3.5

x 6.5

Sources: RDC – Global Environmental Footprint (BW) / Ecointesys 2009 (other beverages)

Bottled Water in EU=

17% of hydrationIntakes but8% of GHG

emissions frombeverage

consumption

BW: Bottled Water


Nestlé Waters Environment PolicyFootprint Management

Measure

Optimize

Engage

Local Implementation

Packaging (55%)

Light-weighting-20% over the 4 past years

Manufacturing (18%)

Energy Use Ratio-17% over the 4 past years

Transport (27%)

5-axis policy

Short term

Recycling more

Long term (10-15 years)

Bioplastics


Our belief

In the future we believe that Bottled water will have a price that more than

reflects its value


In volume Plain water should continue to outpace Carbonated and Sport/Energy drinks

• Value Sales 2003 – 2008 World in Bn$


Opportunity for Nestlé WatersGrowth potential in developing countries

A healthy alternative to CSD

0 50 100 150 200 250 300 350 400

World

NA

WE

EE

LATAM

MEA

ASIA

WATER CSD FRUIT JUICES RTD TEA

SPORT/ENERGY DRINKS RTD COFFEE DILUTABLES

2008 consumption per capita (in Liters/Inhabitant)

CSD: Carbonated drinks


Nestlé Waters has unique brand portfolio that is well-positioned in this economic environment

Value

Premium-Priced

Healthy Family HydrationNestlé Pure Life (Global)

"Active Daily Hydration"

(Local) Brands

InternationalSparkling

Brands


0 1 000 2 000 3 000 4 000

Nestlé Pure Life

Dasani

Aquafina

Poland Spring

Evian

Crystal Geyser

Volvic

Arrowhead

Perrier

S.Pellegrino

Nestlé Pure Life N°1 in the world

Global Top 10 brands Plain worldwide Mn$ 2008


Double-digit growth potential in developing countries

NORTH AMERICA

100

EASTERN EUROPE

40

LATIN AMERICA

59

MIDDLE EAST/AFRICA

14

ASIA/OCEANIA

14

WESTERN EUROPE116

Bottled water consumption per capita by region


Bottled Water and RTD Teas are the only beverages with growth this year in USA

Carbonated Soft Drinks -3,7%

Juice Drinks -10,4%

Sports Drinks -12,8%

- Gatorade -17,7%

Enhanced Water -11,8%

- Glaceau Vitamin Water -15,0%

RTD Teas 0,7%

Bottled Water 0,5%

All Liquid Refreshing Beverages -3,4%

Volume trends 1H 2009


37,70%

12,20%12,80%

3,80%

29%

4,50%Ventes

Nestlé Waters continues to drive share in North America

PET Volume Share YTD 8/8/09Food, Pharmacy, Mass excl. Wal-Mart, C-Store Channels

NWNA(+2.0 pts)

Pepsi(-1.4 pts)Coke*

(-3.3 pts)

Cr.Geyser(-0.3 pts)

Private Label(+3.1 pts)

Others(-0.1 pts)

Source: PET volume share for Nielsen, Food, Pharmacy, Mass (x Wal-Mart) and C-Store channels

* Includes Dasani, Dannon/Aquarius, Evian


Market Share

30,832 33 33,3 33,7 33,4 33 33 34

29 28,4 27,7 27 26,527,5 27,1 27,4

27,6

16,1 15,6 15,5 15,5

15,2 14,8 15,4 15,3 14,814,4 14,4 14,4 14,8

15,4 15,6 15,6 15,515,1

feb 09 mar 09 apr 09 may 09 jun 09 jul 09 aug 09 sep 09 oct 09

NWF DEF NEPTUNE PRIVATE LABELS

Source : IRI HM+SM – Sept 2009 – 100% bottled water


Nestlé Waters Key Priorities

1. Focus on Growth

2. Leverage Strong Brands Particularly NestléPure Life

3. Accelerate Growth in Emerging Markets

4. Continuously focus on cost efficiency

2009.11.11 - Nestlé Waters Pres to Investors - J.Harris ... · uncertainties that could cause...

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