1. Innovation and New Product Development Team 3 Consuelo Haller Murat Onel Afrah Al-Madani M. Ratnadurai Jim Carswell June 2007 Prof. M Baker

2. Driving sustainable profitable growth through new product development in Nutrition and Healthcare. Note: Presented by Nestle UK project team to Nestle HQ executives.

3. Nestle –Strategy –Nutrition and Healthcare Macro Environmental drivers The idea – A perfect match Taste for Life Functional Food Market Ready Meal Competitors Launch Strategy Agenda

4. Nutrition, Health and Wellness Transformational Change

5. Nestle Four Pillar Strategy Focus on Innovation

6. Performance 2006 Revenue 98.6bn CHF (£42.5bn) Strong Growth in last 10 years

7. Nestle Nutrition and Healthcare Enhancing the quality of life Through science-based nutrition products and services, Nestlé Nutrition helps enhance the quality of people's life by supporting health and providing care for consumers with special needs at every stage of life. At Nestlé Nutrition we are building a pioneering new organisation at the cutting edge of nutritional science. We are not in the food-and-beverage business, nor in the pharmaceutical business. We are breaking new ground where both those worlds meet. Breaking New Ground

8. Nestle Nutrition and Healthcare Opportunity in Nutrition and Healthcare

9. Nutrition and Innovation Combination of Pull and Push

10. Macro-environmental Drivers Political and Economic Factors EU Regulations on health claims Government backing for healthier eating due to link to NHS costs (£6bn each year) Social and Demographic Factors Ageing population Life expectancy reaching tipping point Move towards healthier foods without changing lifestyle Technological Factors Functional and Health foods represent more technological areas of food industry Lengthy research and development Manufacturing technology Clear drivers with Government Backing

11. Ageing Population - UK Life Expectancy increasing

12. Changes in Nutritional Concepts Moving to Food for Nutrition and Health

13. The Functional Food Market - UK +55s population will grow 7% by 2010 to 18m people Size of the UK market for ready meals is £1.93bn in 2004 +55s account for £778m Chilled ready meal market will grow by 47.8% Estimated market size for +55 ready meals is £1.02bn – 32% 47.8% growth in Chilled foods UK +55 Population UK Ready Meal Market Size

14. The 55+ market Needs Nutrient dense Small portions Easy to chew Easy and quick to prepare Easy to digest Fresh ingredients No artificial ingredients Tastes good Economical Perfect Match Taste for Life Core Competences Brand Science Based Nutrition Research Competence Distribution Network A range of nutritious and healthy chilled foods conveniently packaged for those with a Taste for Life. Formula for Success

15. Taste for Life Product A range of products that strikes just the right balance between great taste, superb value and science based nutrition. Meals will include Fish, Chicken, Beef and vegetarian options. Separate vegetable portions Price range – 99p to £3.99 Features Colour coded based on special dietary needs such as: Lo Cholesterol Lo Salt Lo Fat Lo Sugar Bone Health/Calcium Digestion Omega 3 Packaging Small portions Clean and fresh packaging Microwaveable/Quick to cook Easy to open Easy to read Easy to store Available in multi-packs (added value) Science never tasted so good !

16. Launch Strategy Taste of Life, Taste of success UK Market Market Penetration Strong likelihood of reaction. Relatively easy to clone. Nestle has the resources to fund. Sales Channel Supermarkets – Chilled food section with Display Health food stores Communication TV Advertising campaign (Dinner party) Mailing campaign (With vouchers) Bus Shelters, Buses and Bus Passes Budget - £5m initially

17. Taste for Life Science never tasted so good !

18. Ready Meal Competitors - UK CompetitorCapability Birds Eye (Unilever)Frozen Foods. Findus LtdFrozen Foods. GeestLargest Chilled Food company in UK. Northern Foods PLCSupplier to Marks and Spencers. Eat Well range. Kerry FoodsSupplies the own brand sector in ready meals. Greencore Group PLCWeight Watchers. HJ Heinz Company LtdWeight Watchers and Linda McCartney. Nestle is first in Science based Nutrition