Bernard Meunier Nestle

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Russian Consumer Market September 2007 Nestlé in Russia and the Russian Consumer Market Bernard Meunier General Director, Nestlé Rossiya LLC.

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Russian Consumer Market September 2007 Welcome to a land of great opportunities 12% of the earth territory 2.4% of the world population 30% of world mineral resources 11 time zones

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Russian Consumer Market September 2007 Why are we bullish on Russia? Continuous GDP growth… 2006 Estimate : Official estimate Russian government

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Russian Consumer Market September 2007 GDP Per Capita 2005 (Nominal in $) Source: IMF Why are we bullish on Russia?

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Russian Consumer Market September 2007 Fast growth of incomes: the Russian consumer is 3.5 times richer than right after crisis Source: Euromonitor International Why are we bullish on Russia? Per capita USD / year

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Russian Consumer Market September 2007 Of all BRIC countries, Russia has the largest middle class, and by 2025 a large upper middle class as well (>15,000 USD/capita/year) Why are we bullish on Russia? Upper middle income class

Russian Food market benefits from the macro-economic growth: 

Russian Consumer Market September 2007 Russian Food market benefits from the macro-economic growth Source : DBUFG Research World food retail sales (2004) Total US$ 1,366 bn Why are we bullish on Russia?

Russian Food market benefits from the macro-economic growth: 

Russian Consumer Market September 2007 World food retail sales CAGR (2004 – 2009F) Source: DBUFG research World weighted average 2.5% Why are we bullish on Russia? Russian Food market benefits from the macro-economic growth

The Changing Russian Consumer: 

Russian Consumer Market September 2007 The Russian consumer is changing faster than any other European consumer. 83% of Russian households will earn more than 200 USD/month (subsistence level) by 2015, equivalent to 90% of population Monthly income per household Source: Euromonitor International The Changing Russian Consumer

The Changing Russian Consumer: 

Russian Consumer Market September 2007 The Changing Russian Consumer Self-estimation of financial situation, Russia, all households in cities with 100 thousand+ population Source: TGI-Russia People can start spending beyond food %

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Russian Consumer Market September 2007 Nestle in Russia & Eurasia is changing together with its consumers

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Russian Consumer Market September 2007 1.4 billion USD of sales 14 factories 10 000 employees 10 sales offices 600 million USD of investments Nestle in Russia in 2006 Fast growth in sales

Nestle is now in Russia:: 

Russian Consumer Market September 2007 Nestle 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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Russian Consumer Market September 2007 Nestle is actively transforming into a Nutrition, Health and Wellness Company Quality - 60/40+ Key strategic transformation tool around which all projects evolve Good Nutrition Program Improves children’s eating habits Nutritional Compass Encourages and empowers consumers to make informed choices Wellness promo campaign in Summer 2006 Acquisition of Bistroff Step towards innovative Health & Wellness solutions

Nestle is seeking for more opportunities for low income consumers: 

Russian Consumer Market September 2007 Nestle is seeking for more opportunities for low income consumers Company’s objective is to offer nutritious quality food products to the 13 mio low income families of Russia and the many more in other countries of the Region.

And is grabbing the premium opportunity: 

Russian Consumer Market September 2007 And is grabbing the premium opportunity

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Russian Consumer Market September 2007 “To be the preferred and most respected Food, Nutrition, Health and Wellness Company in Russia & Eurasia Region” OUR VISION IS:

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Russian Consumer Market September 2007 Thank you for your attention!