Adding Value to Every Product We Sell

Transcription

1 Adding Value to Every Product We Sell From Abattoirs to Nestlé Purina Focus on a part of supply chain: Abattoirs to Nestlé Purina EFPRA CONGRESS, MUNICH 2006

2 Adding Value to Every Product We Sell Petcare business represents 11% of the total Nestle annual turnover European Petfood business development is still ahead of us Lead by Nestle Purina Petcare, NPPE. How does Nestle Purina EU obtain such strong results? The future for category 3 by-products is towards competitive quality Move from Good to Great is the direction we want our suppliers to embrace with us.

3 Nestle turnover by category Before Purina Merger % PetCare 11,4 % Pharmaceuticals 6,1 % Milk Products, Nutrition, Ice Cream 27,2 % Chocolate, Confectionery, Bisquits 11,9 % Cooking Aids, Prepared Dishes 18,3 % Beverages 25,1 % Source: Internal 3

4 A strong potential growth does exist in EUR (% refer to calorific coverage from industrial petfood) N.A. Cat 73% Dog 64% EUR Cat 46% Dog 22% W. Europe: Cat - 67%, Dog 37% E. Europe: Cat 9%, Dog 3% AOA Cat 42% Dog 17% LATAM Cat 28% Dog 26%

5 The Shift from Wet to Dry Food is Global 3000 EUR 1200 AOA Tons Tons AMERICAS 6000 Tons Dry Wet Source: Euro monitor Grocery & Non Grocery Nielsen Grocery

6 Nestle Purina PetCare Europe outperforms its Competitors, even Private Label producers in 2005 NPPC Mars P&G Affinity Other PL Value share Value trend Value share Value trend Value share Value trend Value share Value trend Value share Value trend Value share Value trend % % % % % % % % % % % %

7 Value share of dry dog Manufacturers Europe excl. Russia YEAR 2003 YEAR 2004 YTD 2005 JJ 04 AS 04 ON 04 DJ 05 FM 05 AM 05 JJ 05 NPPE M ars Affinity P&G PL

8 Value share of dry cat Manufacturers Europe excl. Russia YEAR 2003 YEAR 2004 YTD 2005 JJ 04 AS 04 ON 04 DJ 05 FM 05 AM 05 JJ 05 NPPE M ars Aff init y P&G PL

9 Global / Pan European brands 9

10 Nestle Purina performance driven by focusing the whole business on shared principles Safety is not negotiable Developing people Strong Innovation & Renovation program Deliver and sustain 60/40 preference for our products R&D and business focus at every step: Consumers, Customers, Finished products, production technology, raw materials and packaging. Competitive Quality

11 COMPETITIVE QUALITY: Consistently meets customer expectations at the lowest competitive cost Audits (Corrective Actions) Quality Performance Convenience Specifications General Technical Requirements Continuous Improvement Plan FORMU- LATION MATERIAL MATERIAL COST QUALITY OPTIMI- COMPETI- SATION TIVENESS COMPETITIVE QUALITY OE 2007 Supply Strategy Supplier Selection & Approval Cost Improvement Projects Contingency planning Purchasing Leverage (EUR, Global, NPP ) AVAILABILITY DELIVERY MANUFACTURING PERFORMANCE NUTRITION COSMETIC PALATABILITY LEGISLATION CONVENIENCE SAFETY

12 Suppliers development is a continuous process High Respect of Specification & Monitoring Development still needed Clear actions or stop relations Average ZEUR Preferred suppliers Development still needed Low Low Price Competitiveness High

13 The key differences between Good suppliers and Great Suppliers? Share the same values: Competitive quality, No compromise on safety Have the right people Look for long term relationship and return on investments Able to challenge us and propose solutions to fix issues Willing recognize their own problems and fix them diligently

14 What do we expect next? Higher Consistency of Quality controls versus specification Identify supply chain risks & opportunities, related costs, and propose ways to minimize or benefit from them Reduce Working Capital, focus on frozen ingredients supply Highly stable dehydrated Proteins & Fats Low fat dehydrated Proteins Challenge us on the way we are working with you to continuously improve our joint value creation

15 Adding Value to Every Product We Sell The Petfood Industry : the best value outlet for over 30% of Category 3 materials available in Europe Xavier Roussel Xavier.roussel@purina purina.nestle.com Tel: +33 (0) Fax: +33 (0)