A new coffee for the USA from Nestlé Nespresso

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Christophe Cornu, Chief Commercial Officer, Nestlé Nespresso S.A., presentation on 'Nespresso VertuoLine - a game changer ambition' at the 2014 Nestlé Investor Seminar, Boston USA, June 3-4.

Published in: Investor Relations

A new coffee for the USA from Nestlé Nespresso

  1. 1. 1 Nestlé Investor Seminar 2014 Liberty Hotel, Boston June 3rd & 4th 2014 Christophe Cornu Chief Commercial Officer Nestlé Nespresso S.A. Nespresso VertuoLine: A Game Changer ambition
  2. 2. 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 product and pricing pressures and regulatory developments. 2
  3. 3. Presentation roadmap 1 Introducing the Nespresso concept 2 Nespresso USA growth engine 3 VertuoLine as a game changer 3
  4. 4. Presentation roadmap 1 Introducing the Nespresso concept 2 Nespresso USA growth engine 3 VertuoLine as a game changer 4
  5. 5. The Nespresso story Turning a simple idea into a winning formula ….create the perfect cup of espresso with exquisite crema, tantalising aroma and full-bodied taste – just like skilled baristas …at home, in a convenient and consistent way 5
  6. 6. Nespresso sales development Pioneering the portioned coffee category for 28 years 6 * ~ CHF 500 m additional sales* year on year for the past 7 years * at constant exchange rates
  7. 7. The Nespresso concept A virtuous trilogy Perfectly portioned highest quality Grand Cru coffees Smart and easy-to-use machines Personalised & exclusive services 7
  8. 8. A fully integrated value chain From the cherry to the cup 8 1-2% of the world’s green coffee crop
  9. 9. Nespresso AAA Sustainable Quality™ program Everyone benefits from quality 9 The Nespresso sustainability journey started in 2003 with the launch of the Nespresso AAA Sustainable Quality™ Program in conjunction with the Rainforest Alliance to ensure the long-term supply of highest quality green coffee through: • Sustainable Practices • Economic Viability • Environmental Stewardship
  10. 10. A multi-channel route to market Delivering a genuine omni-channel experience Connecting offline with online 10
  11. 11. 11 Continuous and holistic innovation From coffee to service innovations Coffee Machines Services
  12. 12. Presentation roadmap 1 Introducing the Nespresso concept 2 Nespresso USA growth engine 3 VertuoLine as a game changer 12
  13. 13. US coffee in-home market: USD 10.4 bn Portioned coffee drives coffee category growth Source: Nielsen excl. Nespresso - Dec. 2013 $0.9 $1.7 $2.3 $6.1 $6.9 $7.2 $0.9 $0.9 $0.9 $- $2 $4 $6 $8 $10 $12 2011 2012 2013 Portioned Coffee R&G excl. Portioned Soluble Coffee Total coffee: +15.3% CAGR 2011-2013 +94% +38% +21% +10% $ 7.9 $ 9.5 $10.4 US$bn 13
  14. 14. Nespresso USA High double-digit growth 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ~300MioUS$ 39% CAGR 2010-2013 14Source: Nespresso USA Sales
  15. 15. Nespresso USA Internet as the primary channel CRCInternet Boutique 24% 11% 60% 23% 17% 15 Sales Source: Nespresso USA Capsules/volume Sales
  16. 16. Nespresso USA Boutique network Multi-format retail set-up 7 Flagships 2x NYC, SF, LA, Miami, Boston, Dallas 23 Boutique-in-Shops Sur la Table, Bloomingdales, Macy’s 16
  17. 17. San Francisco Flagship Opened Q1, 2013 17
  18. 18. Beverly Hills Flagship Opened Q4, 2013 18
  19. 19. Nespresso USA How we will accelerate growth in the US Accelerate Brand Awareness Strengthen Availability Leverage our Omni Channel model to deliver superior Customer Experience Introduce Innovation designed for the US market 19
  20. 20. Presentation roadmap 1 Introducing the Nespresso concept 2 Nespresso USA growth engine 3 VertuoLine as a game changer 20
  21. 21. Nespresso introduces VertuoLine A game changer ambition 21 2014
  22. 22. Nespresso VertuoLine and Nespresso OriginalLine Two differentiated positionings 22 The system that reinvents freshly brewed coffee The state of the art ‘espresso based’ system Both designed for your home, delivering the undisputed Nespresso superior in-cup result in the most convenient way
  23. 23. Nespresso VertuoLine and Nespresso OriginalLine Two distinct technologies OriginalLine First disruptive innovation by Nespresso CentrifusionTM technology 7,000 rotations per minute (RPM) High pressure pump 19 bars No capsule recognitionCapsule recognition (bar code) 1 capsule size (up to 6g of coffee) 2 capsule sizes (up to 13g of coffee) VertuoLine Patented technological breakthrough Freshly brewed large cup coffee with crema & authentic espresso Authentic espresso 23
  24. 24. Nespresso VertuoLine key consumer benefits 1 Superior machine convenience 2 Unique system versatility 3 Unmatched in-cup quality with crema 4 Nespresso experience 24
  25. 25. The VertuoLine circle Igniting the coffee revolution 25 Differentiate by enhancing the Specific system features: Crema, Centrifusion, etc.
  26. 26. In summary… 26 • Highly Attractive Single Serve Segment • Introduction of a Unique Innovation designed for the American Market • Revolutionary Coffee Extraction Technology and Unrivalled Versatility • A Differentiated Brand Experience based on a Direct-to-Consumer Relationship • An Exclusive Route to Market delivering a genuine Omni Channel Experience • 28 years R&D and Innovation Capabilities in portioned coffee • A Passionate and Focused Team

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