Professional Documents
Culture Documents
premium
THE COMPANY
NESTL Worldwide
NESTL was founded in 1866 by Henri NESTL, a Swiss pharmacist who developed a food
for
babies who were unable to breastfeed. His first success was a premature infant w
ho could not tolerate
his mother's milk or any of the usual substitutes. NESTL's new formula saved the
child's life. People
quickly recognized the value of this new product, and soon after, it was being s
old in much of Europe.
Today, NESTL is the world's leading nutrition, health and wellness company. It is
the biggest food
company in the world with sales of CHF 107.6 billion in 2007, and net profit of
CHF 10.6 billion. It has
factories and operations in almost every country in the world.
NESTL in the Philippines
Although NESTL products were already available in the Philippines as far back as
1895, it was
not until 1911 that the NESTL and Anglo Swiss Condensed Milk Company was establis
hed in the
country, with its first sales office in Binondo, Manila. The Company was forced
to suspend its operations
during World War II, but soon made a comeback after Liberation, under a new name
: Filipro, Inc. In
1960, NESTL S.A. and San Miguel Corporation entered into a partnership resulting
in the formation of
Nutritional Products, Inc. (Nutripro). In 1962, Nutripro s first factory started o
perations in Alabang,
Muntinlupa to manufacture NESCAFE. Through the years, other manufacturing facili
ties were
established in Cabuyao, Cagayan de Oro, Lipa, Quezon City, and Marikina to meet
the growing demand
for NESTL products in the country. In 1977, Filipro, Inc., the trading company, a
nd Nutripro Inc., the
manufacturing company, merged under the name Filipro, Inc. In 1986, Filipro, Inc
. changed to its
present name as NESTL Philippines, Inc. In 1991, NESTL pioneered food production a
nd distribution in
the AIJV (ASEAN Industrial Joint Venture), a regional trade complementation prog
ram. The Company
participated in this program with the manufacture of breakfast cereals at the NE
STL Lipa Factory2, for
export to the ASEAN markets. In late 1998, NPI became a wholly owned subsidiary
of NESTL S.A.,
following the latter s purchase and acquisition of San Miguel Corporation s entire e
quity shareholding in
the company.
Today, NESTL Philippines, Inc. (NPI) is a robust and stable organization, proud o
f its role in
bringing the best food throughout the stages of the Filipino consumers lives. The
company employs
about 3,400 men and women all over the country. It is now among the top companie
s in the entire
NESTL world. NESTL produces and markets products under some of the country s well kn
own brands
such as NESCAFE, NIDO, MILO, NESTEA, MAGGI, COFFEE-MATE, BEAR BRAND, NESVITA, am
ong others.
Its product range has expanded to include coffee, milk, infant nutrition, infant
food, beverages, nondairy
creamer, food, ice cream and chilled dairy, breakfast cereals, confectionery and
pet care. Over
time, NESTL s quality and affordable products have become strong brands, number 1 o
r number 2 in
their various categories, and a part of the Filipino way of life.
2 Today, the Lipa Factory is the NESTL Group s ASEAN Supply Center for breakfast ce
reals.
THE MARKET
Healthy lifestyle trend among adults
Living in a fast-paced environment, people seldom have time to take care of them
selves because
of the numerous and sometimes monotonous tasks that has to be accomplished daily.
These are just
some of the reasons why various diseases are very prevalent among adults such as
heart disease,
obesity, osteoporosis, tuberculosis, and the like. When a person reaches the age
of 30 years old, a
biological condition called somatopause occurs. This is simply a decline in overal
l body performance
characterized by slower metabolism, lower recovery, decreased mobility, shorter
endurance, reduced
mental alertness and shorter memory.
People in general want to enjoy their life to the fullest. To enjoy life, one ha
s to take care of
his/her body. There is NO quick solution to living a healthy life. It takes a lo
t of effort and commitment
in order to live a healthy lifestyle. Nowadays, there is a growing trend on heal
thy living amongst adults.
It can be in terms of eating the right food (high fiber, low calorie, no saturat
ed fat, etc.) as well as
engaging in physical activities (gym, running/jogging, sports, etc.).
Because of this emerging trend there are a lot of food brands, specifically beve
rages focusing on
adult, health & wellness such as Del Monte, Lipton, NESVITA, Anlene, C2 , and ma
ny more. Even
traditionally unhealthy brands such as Coke (i.e. Coke Light and Coke Zero) and Pe
psi (i.e. Pepsi Max)
have added healthier alternatives to their regular portfolio. Below are some of th
e brands under each
of the beverages that promote health and wellness:
o
Softdrinks & Juices
Coke Light, Coke Zero, Del Monte Fit & Right, C2 Lite, FAB,
etc.
o
Milk & Yoghurt Non-fat Milk such as NESVITA Pro-Weight and Anlene, NESTL Low Fat
Fresh Milk, NESTL Yoghurt
o
Tea Lipton Green Tea, Imported Green Tea variants
o
Coffee Nescafe sugar free, Nescafe FIT (Teavigo)
o
Cereal Beverages
NESVITA Cereal Milk Drink, Energen, Quaker Q-Vital, BEAR BRAND
Busog Lusog
Total market for healthy beverages for adults, is approximately worth Php 44.5 b
illion.
Market Segment
NESVITA Cereal Milk Drink belongs to the Breakfast Cereals Category based on Nie
lsen s definition. This
category is further divided into three segments namely ready-to-eat cereals, all
Adults
The Hot Cereals segment is primarily what we know as oats/oatmeal. The pioneer o
f this
segment is the Quaker Oats Company which came out with the first oatmeal product
back in 1901.
Primarily consumed for breakfast and is known to be good in lowering cholesterol
(soluble fiber content
in oats).
Sub-segments and Players:
Family
The All-in-One Cereals segment is composed of instant cereal beverages that are
made of
cereals (i.e. wheat, corn, oats, etc.). Most of the brands like NESVITA Cereal M
ilk Drink can be
consumed either hot or cold. They are primarily consumed during breakfast as par
t of a meal or by
itself ( pantawid gutom ). NESVITA Cereal Milk Drink was the pioneer in this segment
when it was
launched back in 1994. It was the only brand in the segment until the early 2000
when competition like
Quaker s Q-Vital and Energen came into the picture.
Sub-segments and Players:
Kids
Adults
Market Size
The Total Breakfast Cereals category is worth Php 2.1 Bio per year. In terms of
value (Php), the
Ready-to-Eat segment is the biggest contributor at 46% followed by Hot cereals a
t 39% and All-in-One
segment at 15%. The category as a whole is growing but it is the Hot Cereals seg
ment that continues to
grow faster than the category at 18%. (See Exhibit 2 for the Market Size and Gro
wth for each segment
of the category)
EXHIBIT 2: MARKET SIZE & GROWTH PER SEGMENT OF THE BREAKFAST CEREALS CATEGORY
Value Volume
Segment Value % Cont %Growth Volume % Cont % Growth
Ready-to-Eat 973 M 46% 6% 2,500 mt 26% 4%
All-in-One 308 M 15% 1% 871 mt 9% 4%
Hot Cereals 831 M 39% 18% 6,183 mt 65% 9%
Total Category 2.1 B 100% 10% 9,555 mt 100% 7%
Based on: 2008 MAT TY May Nielsen RTA
In terms of volume, the Total Breakfast Cereals category is about 10,000 Metric
Ton category
per year. The Hot cereals segment is the biggest contributor at 65% followed by
Ready-to-Eat segment
at 26% and All-in-One segment at 9%. The category as a whole is growing but it i
s the hot cereals
segment that continues to grow faster than the category at 9%.
Household Penetration by Segment
Based on AC Nielsen s Retail Audit report as of May 2008 in a base of 14.5 mio hou
seholds3, the Hot
Cereal segment has a penetration of 22%, the Ready-to-Eat segment has a penetrat
ion of 18% and the
All-in-One segment has the lowest penetration at 11%. This shows that there is s
till a lot of opportunity
for penetration for the total breakfast cereals category and in each of its segm
ents. The highest
are also snacking occasions for the brand since it is considered a healthier alter
native to the usual
merienda fare such as pansit, chips, and the like. A serving of NESVITA Cereal M
ilk Drink is about 120
calories, only 6% of RENI of a 2000 calorie per day requirement for an adult.
NESVITA Cereal Milk Drink comes in single serve sachets of 30g. Available in thr
ee variants:
original (50% of the business), sweet corn (27%) and choco malt (23%).
Product Positioning
NESVITA Cereal Milk Drink is targeted to females aged 18-29 years old as the cer
eal beverage
which makes you feel beautiful inside (healthy digestion brought about by the fi
ber content and
complemented by the goodness of milk & vitamins) and out (a healthy digestion sh
ows outside as well)
Product Key Selling Points
.
Quality product made by NESTL, the most trusted food company in the world
.
Wholesome goodness in every serving: wheat, milk & vitamins for only Php 12.75
.
Available in three variants: original, sweet corn and choco malt
Product Packaging & Presentation
NESVITA Cereal Milk Drink is packed in single serve sachets. It can be bought pe
r piece for trial or by
boxes of 10 s or by 5 s. (See Apendix 2 in page 13 for Packaging of NESVITA Cereal M
ilk Drink)
.
NESVITA Cereal Milk Drink 30g single serve sachet
.
NESVITA Cereal Milk Drink: Box of 5 s and 10 s
Product Segmentation
NESVITA Cereal Milk Drink targets the ABC segment of the market as can be seen i
n the
household penetration of the product (See Exhibit 4 for Household Penetration of
NESVITA Cereal Milk
Drink). Its consumers are primarily females ages 18-29 years old, more working t
han non-working. These
are active people who engage in some form of physical activity or exercise. They
put a premium on
convenience but are not willing to sacrifice on either taste or nutrition.
Promotion
NESVITA Cereal Milk Drink is heavily promoted in TV, Print, PR, Website, Movie s
ponsorship,
Sampling, Events, and more importantly in-store merchandising via Actmedia or tr
aditional Point of
Purchase or Poinf of Sales materials. (See Appendix 3 in page 14 for current pro
motional materials of
NESVITA Cereal Milk Drink)
During it s early years, NESVITA Cereal Milk Drink was targeted to kids (tagline
N
ESVITA
breakfast you can drink) but eventually shifted to talking to adults since it wa
s found out that adults are
the one who consume the product more than kids due to it s healthy and convenient
offering (i.e. fiber).
Last year, NESVITA Cereal Milk Drink re-launched the brand by having the beautif
ul Marian
Rivera as their celebrity brand endorser, arguably, the hottest female celebrity
in the Philippines right
now. She was the perfect fit for NESVITA Cereal Milk Drink s latest campaign: Feel
Beautiful Inside &
Out.
*feel beautiful inside
*feel beautiful outside
well
The ad featured Marian Rivera in her natural self (not as celebrity, not as Mari
mar, or any of her
alter egos) and how she stays beautiful inside & out. One of the key points of t
he ad was that Marian
only says the word beautiful twice. Thus, truly highlighting how a person can feel
beautiful by taking
in a cup of NESVITA Cereal Milk Drink.
The campaign was also timed during the launch of her 2nd teleserye: Dyesebel to
maximize the
affinity with its chosen female celebrity. Thus, this campaign enabled the brand
to generate a lot of
awareness, consideration and trial. This was the first time that NESVITA Cereal
Milk Drink used a
celebrity endorser in its ad campaign.
Pricing
NESVITA Cereal Milk Drink is the most expensive brand in the segment. Its direct
competition
are Quaker s Q Vital and Oishi s Day to Day cereal drinks in terms of pricing. Low p
riced competition
primarily Energen is more than 50-55% cheaper vs. NESVITA
BRAND PRICE INDEX
NESVITA 12.7 100%
Q Vital 11.4 90%
Oishi Day to Day 9 71%
Nutrivim 6.6 52%
Energen 5.9 46%
BEAR BRAND Busog Lusog 5.6 44%
It is my belief that to combat Energen, NESTL decided to launch BEAR BRAND Busog
Lusog
which is currently the cheapest cereal beverage in the market. Also unlike NESVI
TA, BEAR BRAND Busog
Lusog is available in the market stalls and sari-sari stores which can fight hea
d on with Energen in terms
of distribution.
Substitutes
There are a lot of healthy beverages that are more established in the market suc
h as coffee, tea,
juices, chocolate beverages, mineral water, etc. The cereal beverages or cereal
drinks category is still a
very small segment but continues to grow. The main advantage still of this segme
nt is that it is filling
versus other healthy beverages or drinks.
THE CHALLENGE
NESVITA Cereal Milk Drink is the most established product in the current portfol
io of the NESVITA brand
here in the Philippines. This product drives approximately 50% of the business o
f total NESVITA.
A lot of players have started to challenge the product since its entry in 1994.
In fact some of them,
particularly Energen, has been gaining edge with NESVITA Cereal Milk Drink, via
its low-cost pricing and
extensive distribution.
Since NESVITA Cereal Milk Drink is but just one of the numerous products under t
he brand name
NESVITA, it cannot reposition itself without misaligning itself with the rest of
the product portfolio under
the NESVITA brand. This limits the product s options in a way to fight head on wit
h the more aggressive
players of the market, at least in terms of price and positioning.
Given this situation how then can the brand grow further without changing its po
sitioning as a
premium cereal beverage brand targeting mainly adults who are into a healthy lifes
tyle?