Why did you adjust the organizational structure of the Chinese business and how do you feel about the Chinese market A long series of questions were recently “thrown” to mark Schneider, CEO of the nest
During the exchange activities of JPMorgan Chase, he also talked about coffee in particular. below,
At the above meeting, the structural adjustment of global infant nutrition was “correct”. Nestle just
He said that this measure should not be discussed together with the business problems currently being solved. He further pointed out that under the original global management model, the speed of problems being fed back to the top management of the group was sometimes greatly slowed down, while regional management effectively solved this situation. “Because in many countries / regions, it is placed on the shelf side by side with other Nestle products. The response is faster and more localized
“(infant nutrition) is a very important entry point for the relationship between consumers and Nestle. Nestle has a (rich) heritage there. Now, we don’t want to continue to participate just because of our feelings.” Schneider said that Nestle is solving the operation problem of infant nutrition products in China and is expected to see a “significant relief” later this year. Schneider, who has publicly supported China’s infant nutrition products for many times, also said that Nestle is willing to invest funds to support its development. We are absolutely (willing to develop), otherwise, we should get rid of it. At the same time, he stressed that willingness to invest should not be misunderstood as trying to solve problems through acquisition or “reckless consumption with a large amount of money”, but preparing to spend money on innovation and carefully explore opportunities.
In fact, Nestle is indeed “low-key” in this direction. The snack generation noticed that in May this year, Nestle signed a contract for the upgrading project of infant formula milk powder in Shuangcheng. According to recent news from Heilongjiang daily, local officials mentioned during the investigation that “enterprises are encouraged to speed up project construction and put new products into the market as soon as possible”.
The snack generation also introduced earlier that minhuilin will join Nestle as the head of Wyeth infant nutrition Greater China region from June 1, reporting directly to zhangxiqiang, CEO of Nestle group Greater China region. “Wyeth nutrition will continue to take root and serve the Chinese market and consumers.” Wyeth said at the time.
While promoting the “reinvigoration” of China’s infant milk powder business, Nestle also intends to seize other opportunities extended from this. “We believe that in addition to providing core infant formula, there are opportunities to provide nutritional strength during pregnancy and even before pregnancy
Compared with the milk powder business, Nestle’s coffee business has achieved sustained strong growth worldwide due to the trend of home consumption in the post epidemic era, which is also the “largest contributor” to the company’s organic growth in 2021. At the meeting, Schneider described coffee as a “very broad” market, which not only has many sub categories and a variety of drinking methods, but also has excellent innovative channels and a number of consumers willing to try. These provide the basis for continuous high-end development. Therefore, it is very important to be in a leading position in the coffee market.
“Since the late 1980s and early 1990s, our high-end process has gone for 30 years and has never stopped. Looking ahead, I think there is no end. Consumers are willing to spend money for meaningful innovation and quality.” Schneider said. At present, Nestle has coffee capsules and machines, instant coffee, instant coffee and other product lines. In addition to its own Nespresso and Nescaf é brands, the company has also formed a global coffee alliance with Starbucks, the world’s largest coffee chain, and has the permanent right to sell Starbucks retail and catering products (excluding ready to drink products) outside Starbucks coffee stores worldwide. So, what is the next step for Nestle coffee, which has many chess pieces? First of all, Schneider mentioned that coffee capsules invented by Nestle will still be the main driving force for growth. Such products have advantages in convenience and shelf life, and are also very suitable for the home scene. “Especially in the home environment, when someone wants to drink coffee quickly and tries to drink high-quality coffee as soon as possible. There is no better choice than coffee capsules, which can be extracted in a few seconds without cleaning the machine afterwards (every time).” He said.
Interestingly, Schneider also shared that he received many emails and comments from relatives and friends during the epidemic. “They said, ‘look, I used to have a Nespresso coffee machine or a Nescaf é Dolce gusto coffee machine, but now I have a second one. Because I want to put one in my home office, I don’t want to go to the kitchen all the time’.” He said that for consumers who want to work at home and have a great pursuit of coffee quality, coffee capsules can be regarded as the “preferred solution”. Secondly, Schneider said that Starbucks and Nestle coffee series have successfully occupied different price band levels and solved the compatibility problem. Snack generation introduced that in 2021, the sales of Starbucks’ products in the charge of Nestle increased by 17.1% to 3.1 billion Swiss francs, equivalent to about 21.863 billion yuan. (calculated according to the weighted average annual exchange rate of 2021 in the financial report, RMB 100 will be converted to CHF 14.179 in 2021).
Nestle is comprehensively promoting the development of instant coffee and is optimistic about the high-end trend of instant coffee.
“Now, starting from Asia, people have renewed their interest in high-end instant coffee. Remember, there are many regional markets in the world. In fact, there is a lot of room for growth in some regions, and the per capita consumption is less than 10 cups per year.” He said that nowadays, consumers’ pursuit of the quality of instant coffee “opens the door to high-end”. This trend has not only appeared in South Korea and China, but also began to prevail in Europe and the United States.
In China, Nestle is also making a big bet on high-end instant. Last year, it launched a series of “Starbucks cup with super high-quality instant coffee”, which is also the first product customized for Chinese consumers launched by Nestle Starbucks “coffee CP”. He Wenlong, senior vice president of Nestle’s coffee business in Greater China, once said, “we will continue to work hard and innovate to bring more diverse products and experiences to our consumers.”