nestlé ptc orbe bringing innovative solutions to the · pdf filebringing innovative...

1 Name of chairmanCORPORATE TECHNICAL PRODUCTION AND R&D PTC ORBE

Nestlé PTC Orbe

An IntroductionNestlé Investor Seminar 2003

Bringing Innovative Bringing Innovative Bringing Innovative Solutions to the consumerSolutions to the consumerSolutions to the consumer


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 product and pricing pressures and regulatory developments.


Leadership in Science and Technology are vital for future growth and success of Nestlé

“Nestlé is not just a “creating demand” and “ensuring supply” company.

R&D, as well as proprietary technologies and manufacturing skills, are vital elements of our long-term success”

P. Brabeck


PTC Orbe’s Role PTC Orbe’s Role & Organisation& Organisation

Nestlé R&DNestlé R&DSuccessSuccess--Stories Stories

PTC Orbe’s ActivitiesPTC Orbe’s Activities

PTC Orbe - An Overview


The PTC is an R&D centre which,

• Product and process development• Industrialization• Technical assistance

in one location, has the critical mass of technical experts to contribute to long term growth of sustainable economic profit by:


Key staff at PTC Orbe are experienced leaders in their fields

Management Services Pilot Plant

Coffee

soluble coffeemixtures

R&G coffeemanufacturing

support

Scientific Support

Electricity & Automation

Engineering Packaging

Beverages

mixescocoa, malt bev. manufacturing

support

Cerealsinfant cereals

all family cerealscereal bars

CPWmanufacturing

support


Our operating spirit will help us meet the challenges of a fast changing industry: focused, fast and flexible

Ensure that the ConsumerConsumer and the ProductProduct are in the center of our activities

Ensure that we addadd and create Valuecreate Value

Ensure we are part ofpart of the Business System, aligned toaligned tothe Business strategy and understandunderstand the Business we work with.

Ensure Quality AssuranceQuality Assurance and Consumer PreferenceConsumer Preferenceare our priorities

Treat the Operating Companies as clientsOperating Companies as clients and provide them with an unparalleled level of service

Develop people and competenciesDevelop people and competencies at all levels


PTC Orbe supports an important part of Nestlé business

6%• Pharmaceuticals

12%

• Chocolate• Confectionery• Biscuits

18%

• Cooking Aids• Prepared Dishes

• Milk Products• Nutrition• Ice Cream

26%

• Beverages

26%

• PetCare

12%

Sales by product group


Innovation and renovation are priorities for the entire company

"Innovation and renovation require collective efforts of the entire company, Marketing, Commercial, Production and R&D, driven by an output orientated aspiration for product and process development and commercialisation".

(P. Brabeck)


Innovation and Renovation is strategic to Nestlé’s sustainable competitiveness

ProprietaryProprietaryProducts and ProcessesProducts and Processes

Innovation/Renovation

Consumer Consumer InsightInsight60/40+

Product Product CostCost--StructureStructure

Target 2004+, HPF

Business Input

Competitive Advantage


EngineeringEngineering

PackagingPackaging

E&AE&A

Scientific Scientific SupportSupport

Management Management ServicesServices

Pilot Pilot PlantPlant

PTC Orbe’s Organisation

CoffeeCoffee

CerealsCereals

BeveragesBeverages


PTC Orbe is a leading centre within the R&D network

Largest PTC~300 permanent R&D employees CHF 80 Mio Operating Budget Truly international environment, 27 nations

Privileged geographical position with respect to NRC, Nestec, CPW and Nespresso


Knowledge creation in NRC supports product development in the PTCs

“ As with all centers, the underlying scientific research to support the health, nutrition, quality, and social health, nutrition, quality, and social satisfaction of productssatisfaction of products is derived from work done at the Nestlé Research Centre”

Rupert Gasser


Universities

PTC/R&Ds Products andTechnologies

PTC/R&Ds Products andTechnologies

SBUs MarketsSBUs Markets

Knowledgebuilding

Product development and business supportOutside

Nestlé

Research Groups

Consultants

etc

Specialists

•

•

•NRC DepartmentsNRC Departments

....and in turn support to business


Knowledge creation in NRC drives product development…...

BUSINESSBUSINESSSUPPORTSUPPORT

B U S I N E S S E SB U S I N E S S E S

BASICBASICRESEARCHRESEARCH

NRCNRC Bio and Analytical Science Food and Consumer Interaction Plant Science Quality & Safety Assurance Food Science Pet Basic Research Nutrition & Health

DEVELOPMENTDEVELOPMENTPILLARSPILLARS

PTC ORBEPTC ORBE

• Soluble Coffee• Beverage Mixes• Milo• Cocoa Beverages• Coffee Mixtures• NN products/R&G Coffees• Foodservice Beverages

R&D OHIOR&D OHIO

• Soluble Coffee• RTD Coffee• Coffee Concentrates• Tea• Juices• Non Dairy Creamers for Beverages

PTC KONOLFINGENPTC KONOLFINGEN

• Aseptic Milk BasedBeverages

• Beverage Creamers


R&D balances global and local needs in an Innovation / Renovation Partnership

R&DPTCs

R&D CentresNRC

CENTRESBUCT UnitsZones

MARKETSMarketing

ProductionApplication

GroupsDriverDriver ImplementerImplementer

ProviderProvider


...and is bridging ....

R&DPTCs

R&D CentresNRC


MARKETSMarketing


Groups

DriverDriver ImplementerImplementerProviderProvider

GLOBALGLOBALSTRATEGICSTRATEGIC

LOCALLOCALTACTICALTACTICAL


Operating companies, joint ventures, etc, are clients of Nestlé R&D

R&DPTCs

R&D CentresNRC

Globallylinked

through SBUCulinary

Ice cream

Joint ventures

CPWBPW

Regional organisations

NICEetc.

Global operating

businessesNestlé waters

Nespresso


In today's business Nestlé integrates outside partners

R&DPTCs

R&D CentresNRC


MARKETSMarketing


Groups

Universities

Governmental Bodies

Suppliers

AssociationsConsultants

Consumer agencies

Copackers

Other companies


ConsumerInsight

The R&D working program is defined together with the SBUs, Markets and Zones

Deliver SupportExplore

ScientificResearch

IdeaGeneration

Defined by strategic areas of interest

Defined byspecific projects

Defined byspecific issues

Technology

CompetitiveSituation

IntellectualProperty

Regulatory Situation

Gate1 Gate

2



SuccessSuccess--Stories Stories

PTC Orbe’s Role & Organisation



Key Product area Coffee at PTC Orbe

Coffee


NESCAFÉ Building Blocks are the starting point for new developments

Building blocksGreen coffee quality

Decaf.Blend / Roasting

Grinding

Aroma technologies

Aroma stability

ExtractionCentrifugation

Extract HandlingEvaporation

Freeze-dryingSpray-drying

AgglomerationNew Textures

Green coffee Processing

Aroma/Flavour Technology

Extraction

Texturisation

Packaging and delivery

Qua

lity

Impr

ovem

ent /

C

onsi

sten

cyC

ost I

mpr

ovem

ent

COMPETITIVE

ADVANTAGE

2003 2004 2005

Key development axes


NESCAFÉ 1952-2003

1952

19652002

PTC Orbe continuously renovates and innovates, strong established brands

2001


Key product area beveragesat PTC Orbe

Beverages


Core competence

areas

Product Attributes

Competitive AdvantageCompetitive Advantage

Structure, Process, Flavor, Sensory, Enzymology, Nutrition

Gas entrapment

&foam

formation

Foam Flavor Texture Nutrition

Concentrationdrying

structurisation

Aroma generation

in-corporation

& protection

New technology

& technology

transfer

Beverages -providing market leadership opportunities

ProprietaryProcesses

+Components

Branded active

benefits BAB


Nestlé offers a broad range of Nescafé Coffee Mixes

3 in 1'sCafé au lait/con leche

Non Foaming

'Fun' rangeFrothé, Latte

Cappuccino

Foaming

Soluble Coffee Mixes


Delivering a competitive edge for Coffee Mixes

Building blocks Development

Foam

Whitecomponent

Coffee

COMPETITIVE ADVANTAGE

Quality Improvement

Quality Consistency

CostImprovement

BAB


Milo and NESQUIK

PTC Orbe continuously renovates and innovates, strong established brands


Delivering a competitive edge for MILO, NESQUIK

Building blocks Development

Nutrition

COMPETITIVE ADVANTAGE

Quality Improvement

Quality Consistency

CostImprovement

Flavour

Texture

Convenience& Novelty


Key product area Cereals at PTC Orbe

Cereals


Technology and product developmentare driving our cereal business

• Infant, Junior & All Family Cereals

• Breakfast Cereals (CPW)

• Cereal and Performance Bars : CPW, PowerBar, Nestum, Nesvita, etc.


DevelopmentPillars

Consumerbenefits


Intrinsic cereal

nutrition

Technical support

60/40 Support

Various technologies

SHAPE FORM

TEXTURE FLAVOUR

WELL BEING NUTRITION

Nutrition & Health Flavour & TextureNRCRESEARCH

Cereals -providing market leadership opportunities


Packaging

Packaging at PTC Orbe

Beverages

Cereals

Coffee


Packaging research

Consumerbenefits


Suppliers / NRC / Universities /CT-QM / Legal / Patent / Benchmarking

Product / Packaging interaction

Brand awareness / Packaging solution / Product quality

Packaging equipment

Design Packaging material

DevelopmentPillars

Packaging -providing market leadership opportunities


Nestlé R&DSuccess-Stories

PTC Orbe’s Role & Organisation




The success of R&D reflects in 60/40 + tests and growing product volumes

Consumer Insight

6040

Development

Deployment

Product

Basic Research

+


Foam Booster is creating a new beverage generation

Good foam quality

Pleasure

Solid gasphase interaction

60 40

Industrialisation in several markets

FrotheCappuccino

Technology & product development,

Product

Deployment

Development

Basic Research

ConsumerInsight


Market DateSweet Cappuccino France 9/00

France 1/01Germany 9/00United Kingdom 12/00

Unsweet Cappuccino United Kingdom 12/00Spain 9/00

Frothé Mocha United States 1/01Frothé Vanilla United States 7/02

Cappuccino and Frothé with Foam Booster achieve clear consumer preference

☺☺

☺☺

☺☺

☺☺

Preference


….and show high volume increase after product innovation

0

100

120

140

160

180

200

Switzerland

before after

%

+20% +30% +27% +25% +76%

Italy Portugal Spain Belgium

12 months before and after the launch

+93%

Japan

before after before after before after before after before after


In Home Premium Espresso Quality

and Convenience

NESPRESSO, high quality coffee system is satisfying our consumers

System developmentProduct development

New factory

ClassicProfessional

Rapid growing business, ~30%/Year

Material Science, packaging, physical properties of coffee, foam structure

Product

Deployment

Development

Basic Research

ConsumerInsight


100

200

300

400

500

600

•1940 92 94 96 98 00 •'00

000 Mio capsules

Nespresso coffeedevelopment1990 - 2002

NESPRESSO PROFESSIONAL

1990 2002

Continuous Technical Evolution...

700

800

900

1000

NEW FACTORY IN ORBE

CONCEPT MACHINE

LIMITED EDITION PRODUCT RANGE

RISTRETTO PRODUCT

SPECIAL CLUB PRODUCT RANGE


Growing market share

Technology and product development are driving our cereal bar business

on the go, energy, nutrition, performance

Technology development,Bar binder

Industrialisation

SveltessePowerBar

Active ingredients, nutrition

Product

Deployment

Development

Basic Research

ConsumerInsight

60 40 +


General preference before product launch in France

achieved ☺

SVELTESSE cereal bars achieve a clear preference before product launch


POWERBAR is growing its business through new product launches

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002p

Revenue ($MM)

PowerBar Performance

Power Gel

HarvestPria

ProteinPlus

Dipped Harvest

Acquisition of PowerBar by Nestlé


Introducing new aroma technologies keeps NESCAFÉ a successful product

Improved cup quality, brew like

60 40

Industrialisation in several markets

NESCAFÉ

Aroma technology development

Aroma stability, coffee aroma key compounds, aroma release kinetics

Product

Deployment

Development

Basic Research

ConsumerInsight


NESCAFÉ keeps clear preference with introduction of new aroma technology

These technologies allow us to achieve clear

consumer preference

☺


50

100

150

200

250

300

•1940 50 60 70 80 90 •'00

000 tons

Nestlé soluble coffeedevelopment1938 - 2001

PURE WITHOUT MALTODEXTRINS

BATCH FREEZE DRIED GERMANY

AGGLOMERATION

SEMI -FAST ROASTING

EDEN JAR; NIRVANA JAR

CONTINUOUS FREEZE DRYING FOR TASTERS CHOICE USA

GLASS JARS AND INERT GAS PROTECTION

NEW EXTRACTION

CONTINUOUS DECAFFEINATION

PROCESS ELIMINATES PROCESS FLAVOURSCAPPUCCINO INTRODUCTION ITALY

FOAMING CAPPUCCINO INTRODUCTION GERMANY

1938 2001

REDESIGNED JAR

GREEN COFFEE UTILIZATION OPTIMISATION

COFFEE CONCENTRATE JAPAN

WATER DECAF SWITZERLAND

Continuous Technical Evolution...NEW AROMA

TECHNOLOGY


In conclusion

Our R&D program/project portfolio is > aligned to the business, > based on consumer insight and > focused on products and brands, to achieve> incremental earnings and> sustainable sales growth.


PTC ORBEPTC ORBEBeveragesBeveragesCoffeeCoffee

CerealsCereals

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