1. Decline in sales of Nestle orange juice 2. Infrastructure problems 3.

Distribution problems hit `Pure Life' - Nestle India to exit water business. 1) Challenges Nestle faces in India ( this part not included in d ppt bt still refer it )

As Nestle opens its global R&D centre in Manesar, it plans to also come up with new products in various categories. India, which contributes just less than 2 per cent of its overall business, will see an increased focus in the premium category products by the Switzerland-based company. Nandu NandKishore, executive vice-president Nestle S.A., zone director for Asia, Oceania, Africa and West Asia tells Dilasha Seth that in the semi-urban to rural category it is more of a price-point challenge, whereas in the affluent category, it is more of an innovation challenge. Edited excerpts. You have said that emerging markets contribute about 40 per cent of Nestle's business and you are targeting 50 per cent contribution from these emerging markets by the end of the decade. However, India's contribution is less than 2 per cent of your overall business. What are your expectations or outlook on the Indian market for you? Yes, India contributes less than 2 per cent to our overall business. Fundamentally emerging markets have to be the growth engines of the global economy and also of our business. Slowing growth depresses a little bit of all books but then we have to think of innovation and we have to work harder to create growth momentum, which India has created in the last three years for us. We have had 20 per cent plus growth in the past 26 quarters in India and that's marvellous. We see growth happening in Europe and despite the crisis; we have seen growth for us in Greece.

How much do you plan to invest in India in the next 1 year or so? We have invested $500 million in the last three years to create the capacities, be it chocolates, noodles, coffees, so we need to use those capacities and use targeted innovation to create growth that GDP tide may not be able to provide. We have ongoing investment planning process. Let's digest the big chunk of investment we have had in the past and then go for another big chunk of expansion. What is your specific plan for India in terms of product categories? Cities are the engines of economic growth. Fundamentally two big markets are opening up - for affluent and for semi-urban. Premium goods and services, primarily linked to growth of cities such as five-star hotels, Starbucks, etc. Then there is semi-urban or rural. Our innovations have to cater to both, How do you assess your performance in these two segments in the country? Historically, we have been good with the semi-urban and rural category targeting, with the price points like Rs 2 or Rs 5 and Rs 10 pack. You get Maggi noodles in a Rs 5 pack.

Is there a category where Nestle needs to buck up in India? We haven't done well in the emerging affluent section. We have products in the premium category in infant space, dark chocolates, and so on, for the bottom billion it is a price point challenge more than the innovation challenge. Innovation challenge is more at the top. How do you bring innovative products at the top of the pyramid, where there's a huge demand, is what we have not fulfilled yet. What products are you planning to launch in India in the premium category? You will see coffee, chocolates, premium noodles and other premium offerings coming in. We have Nescafe dolce gusto, which is a coffee machine system in Europe for the last five years, which is highly successful. It allows you to have a coffee shop experience at home. You want to have cafe latte macchiato; it costs you about 50 cents to do it at home, which will cost you three dollars in a coffee shop with a fancy name. It's the same quality and is consistent. Does Nestle have plans to launch that in India? It is something we are evaluating. We are doing some research in some large cities at this point of time and trying to identify where we should enter. We have to learn our way into this market because historically we haven't been very good at it in India. The way to get in is to test it in one or two cities first, make mistakes, learn. If it's a successful template then get into other cities.

Nestle seems to be much behind its competitor Cadbury's in India. How do you see the chocolate market going for you? Launching any new chocolates? I was the guy who launched chocolates in 1990 in Mumbai for the first time. Before we launched, Cadbury's held 96 per cent market share. Now, we have a quarter of a market. A market leader with a 150-year lead, and had a 96 per share, going from 0-25 per cent share is not bad. Are we happy with it? No we are not, we need to keep innovating and keep doing basics right. About new chocolates, I have some tastings scheduled. I can't say yes or no, but that's certainly a reasonable expectation. You are inaugurating a global R&D plant in Manesar. What is the objective? Research in partnership with a few universities and of course coming up with new products in noodles and nutrition.

2)

Nestle faces infrastructure problems in India

For some years now, the FMCG sector has complained of being in the grip of severe downtrading, with customers spending more on lifestyle products than on food or toiletries.

At the same time, the prices of key agricultural commodities have been rising at a fast pace. Still, Nestle India [ Get Quote ] has proved the prophets of doom wrong, with a 20 per cent growth in turnover in the last quarter.

Martial Rolland, chairman and managing director of Nestle India, spoke to Bhupesh Bhandari and Suvi Dogra on these issues. Excerpts: Internationally, Nestle has an array of brands. Your portfolio in India is much smaller. Do you plan to bring your other international brands? What about pet foods? I believe in driving big brands. It is very important to have focus in your approach towards placing new brands in a market. Just because we are present across 10-15 categories internationally doesn't mean we can roll out the products everywhere. Also, the categories we are not active in here are very specific categories - frozen food, chilled culinary and ice-creams. To be present in these categories, one needs structural capacities and a frozen chain or a cold chain. With the kind of power cuts we face here, it becomes unfeasible. But these I would say are interesting categories moving forward, but which are restricted right now due to infrastructure challenges. Coming to pet food, we did introduce our brand Purina into the Indian market by way of importing it. But we needed to have a beef free product as per the norms. Secondly, due to the bird flu scare the government cut down the imports and bringing Purina into India became a big hassle. This raised the question as to why we should bring the brand now when things are not working the way they should. So we decided to put it aside for the time being. Will Nestle get into packaged water by the summer? Packaged water is an interesting category and we have a presence in it worldwide. To be present in this segment in India is indeed a big question. The packaged water market in India is pretty crowded. The business has very small margins. We need to have a model that works and is financially viable. If we were to look at the international players in the market, I would be really interested to know how they sustain the business. Is it viable? Does that mean at current price points, the business is not viable? The entry barriers look significant. It depends on cost structures and who is running the business. It will be difficult running a business like this with the current cost structure. Also, we need to feed the entire country and for that we need to be present everywhere across the value chain like other players. At this point, it is a difficult thing to do. Among all your brands and products, how many are sprinters and how many are laggards? Right now, I would qualify most of our products as sprinters except one - Milo. Otherwise all our brands have been running fairly well.

As far as Milo is concerned, it is a very successful brand internationally, but it is not necessary that it should be successful in all markets. We need to somehow ensure or work out a way to put it back on track. We are looking at the options. We see a lot of action in packaged milk. Does the category interest you, since you have a huge presence in this sector? We are a company that offers products with added value. We are not going to get into selling milk in plastic pouches simply because the cost of investment is huge and the realisation is not in tune. We are not a commodity oriented company and are not looking at branded packaged commodity business because we will never be able to have the lowest cost of production, which is a must to succeed in this line. How big is the problem of trademark infringement for you? I think it is fairly minimal. Some people do try to pass off some brands as their own, but it still less compared to what we face internationally. The breakfast cereal market is attracting many international players to India. Does Nestle plan to enter this segment? We are test marketing our brand Cerevita in Bangalore. It is available in two offerings - rice with corn and mixed fruit. Breakfast habits are very hard to break, but with the growing work culture the young consumer is being driven towards convenient breakfast options. Our cereal goes well with hot milk, something the Indian consumer likes. What is the outlook on the cost of key inputs like milk, wheat sugar and coffee? Input costs have been increasing and there is no reason to believe that there will be an improvement in this regard. And this is a worldwide phenomenon wherein we are moving into an era where input costs are on the rise. In India, raw material costs will continue to challenge us.

3) Distribution problems hit `Pure Life' Nestle India to exit water business P.T. Jyothi Datta New Delhi , Aug. 26 IT has always been choppy waters for Nestle India's bottled water businesses. First it's Perrier and San Pellegrino brands of carbonated water ran into rough weather. And today, after more than two years of trying to get its act right with Pure Life, its mass bottled water product, Nestle India Ltd has announced that it "would be discontinuing the water business." The company informed the BSE: "Pursuant to review of water business being conducted since last year, the company has assessed that the financial returns even in the longer term are unsatisfactory." Tidings had been difficult for Nestle's Pure Life, with distribution problems limiting its presence in the market. And while the company officials were unavailable for comment, Nestle India's Chairman and Managing Director, Mr Carlo M. Donati, had toldBusiness Line last year that Pure Life's problems were because the market was riddled with "discounts" and Pure Life did not have the distribution network of a Coke or Pepsi and the volumes of Mr Ramesh Chauhan's Bisleri.

With a strong presence in the global packaged water market, Nestle's tryst with water in India commenced in June 2000 when it launched its carbonated water brand Perrier or the `Champagne of waters'. In less than five months, the food corporate launched its San Pellegrino, another sparkling water brand touted to be `the most premium table water in the world'. Both products were premium, priced at about Rs 90 for 750 ml. Meanwhile, the packaged drinking water category was bubbling with activity with the cola majors entering the estimated Rs 1,000-crore segment with their respective brands Aquafina from PepsiCo and Kinley from CocaCola India. This, even as the domestic generic brand, Bisleri, grew in strength. Nestle's Pure Life made its entry in the country in February 2001. At that point, it was the only bottled water brand pegged at Rs 12 for one litre. It wore "purity" virtually on its sleeve in terms of sporting a tamper-proof hologram and production was to be undertaken at its Samalkha plant, Haryana. At the launch, company officials had expressed optimism about the growth prospects for Pure Life, with ambitions to be No. 2 in the Indian market, in two years. Pure Life is also present in China, Brazil, Pakistan and Mexico. Nestle officials had then said that the water division of the Nestle group had developed and acquired several successful brands of mineral water and processed water and had 70 brands in 130 countries. Trouble first started brewing for Nestle's Perrier and San Pellegrino in March 2001, following the Union Health Ministry's notification bringing water under the Prevention of Food Adulteration (PFA) Act, making it mandatory for bottled water to adhere to certain parameters and sport an ISI mark. Since sparkling water did not meet the norms of still water, Nestle had to stop importing its carbonated water brands. Today's announcement on the BSE has poured water on the prospects of a revival for Nestle's struggling Pure Life. "And this could well be indicative that water will no longer be on the agenda for Nestle India. At least for the time being," point out analysts. CONCLUSION:

http://www.nestle.com/assetlibrary/Documents/Reports/CSV%20reports/Environmental%20sustainability/Sustainability_review_Engl ish.pdf

While they have developed a strong corporate culture and firm set of business principles during the 135 years of our companys existence, they are not satisfied regarding their current performance, but are dedicated to continuous improvement in sustainability

Why Nestle? Nestle is an apposite company when studying the open culture and ethics of a company. Nestle strongly believes in adapting to the ever changing world but still upholds the fundamental foundations it instituted at its inception. Hebert (2009) asserts that Nestle is reflective of fairness, a general receptive attitude for people and honesty. Consequently, the concern of interest is how Nestle manages the dialectic between having well-ingrained core values, and concomitantly according respect to national cultures.