Population Aging 50plus market A unique chance to grow 2011/06/14

1. Population Aging 50plus market A unique chance to grow 2011/06/14

2. Executive summary Population aging : a growth opportunity Opportunies & Threats for Nestle Waters 50plus market : facts and figures Examples in food industry Actions for Nestle Waters Nestle : Key actor of Global Aging

3. Population aging : important possibility to grow

4. 60plus in 2000 and 2020 Pourcent of the population aged 60 ansand over, 2000-2020 (Source Senior Strategic) 21 24 16 18 21 19 16 13 14 11 13 18 2000 2020 8 13

5. Population ageing : Impacts for companies Short-term growth Rapid changes in market shares between actors Rapid demorgaphic changes in some countries (China will age before being riche) Economic risk in 15-20 years in developed countries (Oxfort Aging 2010) Mature population = mature decisions Longer renewal cycles Some secteurs will grow : health, housing, food, technologies for aging Some secteur wil decrease : automotive, small appliances (part of)... « Global warming, globalisation of the economy and population aging are the 3 main challenges of the 21st century » Frederic Serriere NY 2010

6. 2 main markets Old age market 50plus market

7. Opportunities & threats for Neslte Waters

8. Opportunies & Threats for Nestle Waters Opportunities - Ppopulation aging : unique growth opportunity for Nestle Waters- This is the moment to be the first on the market - Some solutions are « easy to implement » > Quick winsThreats- Thirst sensation decreases with aging = mineral water market could decline in 10/15 years in aging countries. The prevention of dehydration is a must for the market.- Boomers (richest and largest generation) arrive a « consumption cycle end ». - They are less loyal to brands. (Decrease by 40% 2011 vs 2009 of impulsive consumption - Source : Focalyst)- New actors - (Phenomenon Facebook vs. Google in Social Medias) > Nestle Waters needs to act now

9. 50plus market Facts & Figures

10. Facts & figures 43% of revenues (up by 15% by 2020) 51% of mineral waters in Europe 3200 billions euros of purchasing power (Europe – Estimation Senior Strategic) 72% of financial investments 60% of housing 75% of high-end vehicles 6% of the revenues for children  and grandchildren 35% of purchases of low-fat meals 3/5th of home food market50% of for beauty products56% of total insurance. Sources : Eurostaf, Euromonitor, Senior Strategic

11. Who are the 50plus 65 70 40 50 80 90 Elderly Baby boomers Seniors 1930 1930 1950 1960 1940

12. Boomers (50/65) 20% of the developped countries' population Revenues 30% above average Their needs Age in good shape Convenience Quality Environment friendly Authenticity Affluence : most important generation in developed countries with the highest revenues. They've got, for the moment, the ressources to get what they want. Health & Wellness : for boomers, 60 is today's 40. They look for foods and personal care that keep them strong and vital for their later years Value for money : it's not low price. Boomers define it depending on their life situations and aspirations Ethics & Environmentalism : Boomers respond to brands who share their convictions and act on them Less loyal – Desire for new experiences : it's what's always defined this generation. Pleasure : very important value for this generation in many secteur : food, tourism...

13. Seniors (65/78) 16% of the developped countries' population Revenues equal to average Their needs Reinsurance Practicity Healthy products Loyal to brands : they have been loyal to brands which reinsurance them. Health : first main health issues. Looking for food compatible with their health situation Once financially conservative, they are now willing to spend money on themselves. But, crise push savings. Fellowship has always been important for them. Tend to become more conservative while aging.

14. Examples in Food Industry

15. Minute Maid - Premium Heart Wise Plant sterols have been shown to reduce the level of bad cholesterol. Minute Maid received in 2003 approval from the Food and Drug Administration to market the product's potential health benefits. Consumers will need to drink 16 ounces of the orange juice daily to get the sufficient sterols to alter their cholesterol levels. > Based on health issue prevention

16. Pepsi Natural and Throwback (2009) > Based on nostalgia “We’re complementing and reinforcing our core soft drink offerings with a hat trick of innovative products. Pepsi Natural and the Throwback duo give consumers the opportunity to refresh how they experience soft drinks – from a premium, all-natural beverage to a fun, retro twist on two of our most popular brands“ Frank Cooper, VP of portfolio brands, Pepsi-Cola North America Beverages. > advertisement video xxxxxxxxxxxxx

17. Danone > Health and aging well PUB EVIAN

18. Unilever High experience on the 50plus market : Dove, retail... "The time is long overdue to rethink Baby Boomers …With their focus on health and well-being, they want to continue maintaining the vitality they now enjoy. As Boomers age, retailers who'll know how to help them stay vibrant and connected to what they care for most in life will be the winners." Kevin Havelock, President, Unilever U.S.

19. General Mills : Boomers with health > Health > Single-serving versions "We'll continue to enhance our current products and develop completely new ones to help boomers defy the calendar" Ian Friendly, chief operating officer and exec VP-U.S. retail

20. Other brands Kroger Active Lifestyle Vivinal GOS dairy-derived prebiotic product ELATIONS : Glucosamine and chondroitin

21. Actions for Nestle waters

22. Challenge for Nestle Waters Satisfy a greater number of generations (5 vs 4), with Boomers as an important target with young customers to conquer while maintaining the Seniors' water consumption

23. Aging well Aging Well Aging well is N°1 request for 50plus. A good hydration may be on answer. Health Diabetes, Cognitive illness, Osteoporosis... are main concerns of 50plus Convenience Packaging Packaging must be adapted to aging population with an « easy to » strategy Services Aging population requests more services (informations, coaching, delivery...) Retail Retails must adapt to aging population. Focus on Boomers Loyalty Boomers are known to be less loyal to brands. Nestle needs to address this in order to keep this key generation Needs The best way to target Boomers is to focus on needs not on age. Keep Seniors consumption Water Old Age Establish « standards » or water consumption for Seniors Close to Aging population means : migration towards town centers & less possibilities to move. Sales & Partnerships Sales Strong sales strategy is need to adress 50plus market. Partnership Good partnerhips strategy could give uge advantages to Nestle Waters Acquisition Study the opportunities to acquire water brands well position on the 50 plus. Communication Global Communication should should not focus on age but on « all generation » with common values and needs such as Hydration Specific Functional waters keep continue to focus on functional benefits resquested by Boomers generation. Strategies to succeed this challenge

24. Water as a factor of successful aging Aging Well & Well being & Pleasure Fact : aging well is the number one need of the 50 plus. In the food industry they want both : pleasure and health. Health issues : choresterol, diabetes, menopause, osteoporosis, cognitive functions

25. Convenience Product & packaging : « Easy Easy » Easy to : use, read, carry, handle, open, understand benefits, shop, pour... Easy for 50plus = easy for all generations = Universal Design Format based on 50plus needs and compatible with younger generations Environment : very important for Boomers More informations on packaging

26. Convenience “When our boomer and 50-plus customers plan home improvement projects, we offer the products, services and know-how they need to create an intergenerational living space that welcomes family members of all ages and abilities.” Roger Adams, CMO and senior vice president of Marketing for The Home Depot. Services Home delivery More Global Informations on health Retailing Start dialogue about Seniors to retailers Easy access to Nestle products Unilever shows retailers how to follow the money

27. Focus on Boomers • Fit their needs – Tell them they are important. This generation feels that they have been ignored for the last 15 years. Focus on Well Being and Aging Well with Healthy Hydration and Functional benefits Enlarge the current representation of « family » (include Seniors in communications) « Waters for All Generations » Focus on innovations and « easy to » Develop a competitive strategy vs tap water Prove and demonstrate benefits Environment is a must

28. Maintain the Seniors consumption Promote water consumption as a need for old age Use prescriptors (doctors, gynecologists, hospitals, nutritionists, carekeepers...) Publish reports and studies. Establish « standards » of water consumption for Seniors Be close to Seniors Home delivery Better packagings Use carekeepers Develop communication program with insurance & pension cies Develop a Care and Benevolence image

29. Sales & Partnerships Retails / Distributions Start dialogue about Seniors to retailers. Help them to sell to Seniors Explore new distribution channels RetailConvenience delivery : home, drive in, through e-com, retailers, parking, special transports, for retired households, free delivery for very loyal customers. Partnership Retired associations (Carp, AgeUK, Aarp...) Services network. Ex. : Comfort Keepers (Sodexho-US), Una (France)... Insurance & pension companies Professional associations (lobbying) Companies already on Seniors (Saga in UK, Docomo in Japan...) Acquisitions Study the acquisitions of water brands well positionned on 50plus market

30. Communication in Aging Countries (Europe, North America) : ageless communication • Waters for All Generations Enlarge the current representation of « family » (includes Seniors in communications) Ageless communication Keep modernity & target 50plus = avoid ghettoisation = Focus on Healthy Hydration & Functional benefits Intergenerational communication Mainly products designed for Boomers with an Ageless communication strategies Elderly Baby boomers Mainly product designed for elderly and communication directly Generational communication Senior Strategic ComGI Map

31. Communication Strategies Intergenerational communication Waters for differente generations should be advertised with Ageless Strategies Functional waters for one generation may be advertised on a benefit Products for the old age could use a « Senior communication » Elderly Baby boomers Generational communication

32. Nestlé Pure Life waters & 50plus • In aging countries : target 50plus and keep younger generations : • Universal Communication based on commun values between Boomers and younger generations. Enlarge the current representation of « family » Include 50plus in media plan & P.R. In US and Canada : study the opportunies to partnership with AARP and Carp Example of Pepsi targeting Boomers and Young on one single advertisement : http://fiftiesgeneration.blog-idrac.com/2010/11/26/du-pepsi-pour-les-papy-boomers/

33. Functional waters & 50plus Ageless communication & functional benefits and histories Example : Hepar focused on Magnesium Contrex is a special case : conquer young generations and keep actual 50plus customers

34. Local waters & 50plus Ageless & based on - Origine & heritage - Environment - Benefits Idea in US : Study the possibity for a US local brand to be the 50plus water across the US

35. Nestle as a key actor of Global Aging

36. Nestle as key actor in Global Aging Nestle is one of the right company to be an actor on Global Aging and Aging Well Work with an international institut on Aging Publish researches Publish comprehensive studies for medias and customers Sponsor and organise conferences on Aging Develop an international network of experts on Aging Example : Global survey on ageing and retirement by HSBC and Oxford Aging See the Global Aging Actions as a strategy to conquer new territories

37. Now, this is the moment A unique chance for Nestle Waters to grow - The first boomers have already 65 years - Success stories on aging are now - The big players are beginning to show interest - The market shares are taken now. Syndrome (Google vs. Facebook)