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Nestlé's Popularly Positioned Products (PPPs)

Facts and figures

Nestlé's PPP strategy

Global context
As the world’s leading nutrition, health and wellness company, Nestlé has a responsibility to provide consumers
with high-quality, nutritious products, regardless of where we sell them and the price point at which we sell them.
Therefore, we have developed a specific business model called “Popularly Positioned Products” (PPPs) which
focuses on the specific needs of the worldwide around 3 billion lower-income consumers. PPPs offer these
consumers the opportunity to consume high-quality food products that provide nutritional value at an affordable
cost and appropriate format. PPPs are defined as one of Nestlé’s main growth drivers for the years to come.

Key facts
 PPPs are affordably priced, nutritionally enhanced, appropriately formatted and easily accessible for
emerging consumers.
 In 2009, PPPs accounted for around 8% of Nestlé’s annual sales, which equates to USD 8 billion.
 With 12.7% organic growth in 2009, PPPs grew substantially faster than the rest of the Nestlé Group.
 Nestlé’s PPP range stretches from culinary products to beverages, dairy and confectionery and entails 3950
different products overall.
 Nestlé produces PPP versions of major global brands including Maggi, Nido and Nescafé.
 The PPP strategy relies on local sourcing, local manufacture and local distribution to minimize costs.

Nutrition
 Nestlé applies the same vigorous quality and safety standards on its PPPs than on any other products. Food
safety and quality are non-negotiable.
 With a large proportion of the world’s emerging consumers suffering the consequences of deficiencies in key
micronutrients such as iron, zinc, iodine and vitamin A, fortifying our PPPs with micronutrients can help to
address deficiencies among lower-income consumers.
 Iodine is the most widespread deficient micronutrient in the world affecting 2 billion people. Nestlé sold 600, 000
tonnes of iodine-enriched Maggi products (bouillons, seasonings and noodles) in 2009.

Distribution
 With a range of locally adapted distribution methods, including street markets, mobile street vendors and
door-to-door distributors, PPPs are a source of income for street traders and individual distributors and
contribute to the creation of local jobs.

Business opportunities
 Our presence in emerging markets is both highly developed, with USD 33 billion of sales in 2009, and rich
with opportunity as these markets continue to grow dynamically. Our businesses in these markets grew
faster than the rest of the Group and there is still huge potential: the population in emerging markets is
expected to increase by 3.3bn (2000-2050). More specifically, we estimate that there will be one billion
additional consumers entering into the cash economy within the next ten years.
 We also sell PPPs in developed markets, mainly in Europe. With our diverse product and brand portfolio, we
are able to cover all income levels and provide solutions to the changing purchasing patterns of the current
environment, adapting to consumer requirements. Our portfolio is broad based (cheap and expensive
versions of the same product category). Nestlé offers the possibility to trade up and trade down without
trading out of its products.
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Nestlé's PPP in Indonesia

 PPP sales represent about 1/3 of the total sales of Nestlé Indonesia.
 PPP organic growth in 2009 was about twice the total organic growth of Nestlé Indonesia.

 In the past few years, Nestlé launched new products for emerging consumers with specific nutritional
features and at an affordable cost: e.g. Ideal, Dancow Batita, MILO Choco Blazz, Nestea, Koko Krunch ,
Nescafe Tubruk.

 PPPs make a big difference in a country like Indonesia, where better nutrition positively impacts the
emerging consumers’ health, development and education.
 PPPs address micronutrient deficiencies among Indonesian consumers: Iron deficiency and Vitamin A
deficiency are two of the most prevalent micronutrient deficiencies
o 40% of the Indonesian population consume less than 50% of the recommended daily amount of
iron. About 50% of Indonesian pregnant women and children suffer from iron deficiency.
o 35% of Indonesian population consume less than 50% of the recommended daily amount of vitamin
A. 20% of Indonesian school children suffer from vitamin A deficiency and 2 % of Indonesian
pregnant women suffer from night blindness.
 Nestlé produces fortified products such as MILO Choco Blazz (iron), Koko Krunch (iron, 8 vitamins calcium
and whole grains) and Ideal Danco (iron, calcium, proteins).

 The size of the Indonesian population and their demand for value-for-money products (better quality, more
nutritious) make Indonesia a key PPP market with many growth opportunities. It is estimated that appr 2/3 of
the total food expenditures of the emerging consumer are spent on packaged food. The emerging consumer
may spend 17’000 to 60’000 Rp a day on packaged food.

 Nestlé Indonesia provides assistance to over 30,000 milk farmer in East Java who provide milk to the factory
in Keyajan which manufactures PPPs.

 Nestlé Indonesia started programs to educate emerging consumers on its commitment towards Nutrition,
Health and Wellness to enable them to make better-informed choices:
o Caravan Gizi – nutritional education
o DANCOW – parenting centre
o MILO Sports activities (Badminton School Championship)