50plus : the keyfor Nestle Waters to stay the leader2011/06/14

Executive summary

The growing and richer 50plus are the key growth opportunity

Who are the 50plus ?

What are our competitors doing on the 50plus ?

Our Vision : stay the leader by leading the 50plus. How to achieve this goal ?

Nestle : Key actor of Global Aging

The growing and richer 50plus are the key growth opportunity

50plus : a key part of the population

25

18

27

20

23

18

26

15

25

18

17

10

1813

Pourcent of the population aged 50 ans and over, 2000-2020

2000

2020

Source : EuroStat, US Census Bureau, Vienna Demography, Ifa

43% of revenues (up by 15% by 2020)

51% of mineral waters(Europe)

3200 billions euros in buying power (Europe – Senior Strategic)

75% of high-end vehicles 50% of for beauty products

50plus : a key part of revenues and consumption

Who are the 50plus ?

What are their needs ?

7

Proactive Life Embracers

Struggling Solution Seekers

Ageing Problem Caretakers

• Healthy & active• Focus on Protecting &

enhanceing health, vitality, and appearance

50 mios in AMS + EUR

• Lack discipline & time to be healthy

• Focus on weight management

60 mios in AMS + EUR

• Focus on staying healthy to enjoy life and take care for their loved ones (husband)

60 mios in AMS + EUR

PRIMARY TARGET

Baby Boomers110 mios

50 – 65 : from menaupose to

retirement

SECONDARY TARGET

Grand Boomers60 mios

65 - 75 : retirement to serious health

issues

Three main targets identified...

ElderlySeniors

Ageing Problems Caretakers

BoomersProactive Life EmbracersStruggling Solut. Seekers

65 70 80 9040 50

… mixed with 2 generations = 3 key needs

Health & WellnessFoods and personal care that keep them strong and vital.

Value for moneyDepending on their life situations and aspirations

Ethics & EnvironmentalismRespond to brands who share theses convictions

Desire for new experiences Less loyal to brands

Don't want to be considered as Seniors

Reinsurance & Security & Safety

Loyal to brands which reinsurance them

HealthLook for food compatible with their health (diabetes, menopause, cholesterolis, osteoporosis, transit disorders ...)

Financially conservative

Meaning of general interest

Importantfor them

Empty nester couples1st important legacy

Home credit end Retirement Dependencycare needed

menopause

Men life expectancy

Age

Numbers

3 key needsWell being & Aging WellConvenienceConnected to all generations

Enthusiastics11%

Leaders11%

Originals14%

Fearfuls13%

Actives14%

Sociables13%

Rigorous11%

Thinkers 11%

Who are the 50plus ? (Psychographic Segmentations)

What are our competitors doing on the 50plus ?

ConvenienceNostalgia . PleasureHealth

Competitors are just starting now, looking for growth

Retail

Coca ColaPremuim Heart Wise

DanoneActimec – Salvetat

General MillsFiber One - Progresso

Pepsi Co.Pepsi Natural & Throwback

General MillsWanchai Ferry

General MillsCooking for two

UnivelerOne of the most advance company on aging in food industry

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Focus on health, nostalgia, convenience, retailing, communication. Are just starting to study the 50plus Just communicate with very few global strategies Unilever (global) may have the better understandings

Nestle Waters Vision

Nestle Waters Vision : Stay the leader by leading the 50plus

Satisfy a greater number of generations (5 vs 4) with

- Boomers as primary target

- Seniors as secondary target

Nestle Waters is coherent to be a key actor on 50plus

Positive Negative

Internalfactors

StrengthsHeatlhy hydration focus fits with 50plus needsLeadershipResearch capacitiesFunctional waters well establihed in FranceMarketing teams aware of the opportunity and willing to go on 50plus

Weaknesses50plus little knowledgesMany brands = harder to get all the teams involved ?Large group : decisions take time ?

External factors

Opportunities50plus market is one of the unique growth opportunities2010/2013 : the right time for success storiesCompetitors are at the very beginning

Threats50plus may be difficult to captureNew actors entranceRetail not ready to target the 50plus marketGeographical population aging differencesConsumption decreasing in old age ? (10/15 years)50plus revenues decreasing (5/10 years)Futur economical crise may concentrate companies on very short term topics

Actual Nestle Waters position on healthly hydration is coherent with the 50plus All negatives may be addressed thanks to the actual leader position, financial ressources and top management strong support.

Key n°3Connected to all generations

Key n°1Aging well – Well being

Focus on 3 key needs

Environment

Health hydration for - well being- well aging- health issues

Function hydration- health illnesses

Develop a Care and Benevolence image

Promote water consumption as a need in old age

Focus on quality

Packagings & formatsEasy to : use, read, carry, handle, open, understand benefits, shop, pour...

Formats based on 50plus needs

More infos to help decisionsPackagings, communicationsales points, hotline...

Closer to customersRetailers involvedNew distribution channelsRetail Convenience delivery

Ageless communication & Universal design

« Waters for All Generations »Enlarge the current « family » representation including Seniors

Focus on hydration and benefit. Do not use age.

Packagings

Local sourcesLess transport = less CO2

Sustainable developmentSources protectionRessources protection

Key n°2Convenience

Key n°1 : Aging Well & Well being

Well being

Well aging

Healthy hydration

Health issuesConstipation, transit...

Functional hydration for health illnesses

Choresterol, diabetes, menopause, osteoporosis, cognitive functions

Old AgeIllnesses

Pleasure

Key n°2 : Convenience with packagings and infos

Easy Packagings & Adequate FormatsUniversal Design = for all generations Easy to : use, read, carry, handle, open, understand benefits, shop, pour...Adequat formats for singles, empty nesters couples, grandparents & grandschildrens,

More informations for better decisionsProve health benefits, comparative tests, focus on needs and benefitsGive more informations on new products

Mettre des photos de packagings bouchons en developpement chez nestle

Mettre HEPAR EXAMPLES,

Key n°2 : Convenience : close to customers

Retailing - DistributionRetailers involved in 50plus developments- communication to retailers (informations on the 50plus, conferences how to attract 50plus, how to sales to 50plus...)- check distribution of existing products in actual retails

Retail Convenience deliveryHome delivery, drive in, through e-com, retailers, parking, special transports for retired households, free delivery for very loyal customers.

Mettre une photo ?Quoi comme photo ?

Mettre une photo ?Quoi comme photo ?

Key n°3 : 50plus connected to all generationsFocusing on hydration and benefits, not on age

For 50plus generationFor all generations

Intergenerational Strategy

Generational Strategy

Transgenerational Waters promoted with Ageless Strategies

Functional waters for one generation promoted on benefits

Old age products may use a « Senior Strategy »

(COM/GI Senior Strategic Matrix)

LocalFunctionalNestle Pure life

What does it mean for our different brands in aging countries ?

Focus on Hydration

In aging countries : target 50plus and keep younger generations : Universal Communication based on commun values between Boomers and younger generations.

Enlarge the current representation of « family »

Focus on Hydration & functional

Ageless communication on functional benefits and histories

Example : Hepar focuses on Magnesium

Contrex is a special case : conquer young generations and keep actual 50plus customers

Focus on Hydration

Ageless Communicaitonfocused on - Origine & heritage- Environment- Benefits

Health

Convenience

Connected to allgenerations

Packagings & formats More infos to help decisions

Closer to customers Add services

Be leader with strong partnerships (& acquisitions)

Strong partnershipsRetired people associations (Carp, AgeUK, Aarp, DaneAge, 50&piu...)Services networks for 50plus (Comfort Keepers - Sodexho-US, Una - France...)Insurance & pension companies (Saga, Metlife, Axa, Hsbc...)Professional associations on aging – « lobbying »Companies already on Seniors (Saga – UK, Docomo – Japan...)

AcquisitionsStudy the possible acquisitions of well positionned on 50 plus waters brands

Nestle as Key Actor onGlobal Aging

Nestle as key actor in Global Aging

Nestle is one of the right companies to be an actor on Global Aging and Aging Well

Work with an international institut on AgingPublish researches Publish comprehensive studies for medias and customersSponsor and organise conferences on AgingDevelop an international network of experts on Aging

Examples : HSBC and Oxford Aging, Aarp Global Network

Now, this is the momentA Key for Nestle Waters to stay the Leader

- First boomers have already 65 years- Success stories on aging starts now- Competitors starts to show interest