Specialist
Former Director at Nestlé Waters SAS
Agenda
- ODRecent trends and demand and supply dynamics in the regional bottled water market
- Competitive environment update including Nestlé, Danone and local APAC players
- Sustainability challenges and costs
- Mid-term growth and profitability outlook
Questions
1.
What is the bottled water business like in APAC? What are the key markets and how do you segment the market?
2.
How should we think about the pecking order of the key markets, in terms of size?
3.
You mentioned that in markets such as Thailand, home office delivery can be anywhere between 10% and 35% of the market. You said the premium segment, imported sparkling, is very small. Is that less than 5% of the market?
4.
You said the premium end, with players such as Nestlé or Danone, could account for 25-30% of the value of the business. Is it less than that in APAC? Is the bulk of the business still the mass market?
5.
You spoke about the growth of the middle class. You said chilled water is something that’s not natural to consumers in Asia, but is being adopted. I assume Asia is very different to Europe or the US, in that there’s conversion from boiled tap water to packaged water. Could you expand on the consumer needs to drive and support future growth?
6.
What is the difference in profitability profile between the five-gallon business, the out-of-home or mass market business and the sparkling or premium business?
7.
When we talk about at the mass market segment, is it spring water or purified water? Does that make a big difference in the value chain?
8.
What commoditisation and pricing trends have you observed in the marketplace to date?
9.
Has pricing decreased significantly across some markets, particularly the mass-market segment? Has this had an impact on industry margins over the last five years or so?
10.
Could you elaborate on the value-driven products? You mentioned trying to introduce functionality and more imported premium waters. Is there space for flavoured waters in the Asian market? How do you think about innovation, and trying to trade the consumer up the value chain in APAC?
11.
Can you talk about the competitive landscape in the region? Nestlé and Danone are the big global players. What are the key markets they dominate, and where is there strong local competition? Has local competition picked up anywhere?
12.
Do you think coronavirus will have any sustained impact on the industry? Will it change consumer behaviour or the ways companies operate?
13.
Could you give a brief overview of Nestlé’s business in APAC? What are the key markets? What is the split between imported or premium brands vs local brands? What is the channel segmentation?
14.
Why is Nestlé’s Minéré brand able to generate a high enough return in Thailand for the company to want to commit to the business?
15.
What do you think is the future of the Nestlé Pure Life brand? I was under the impression that this would be a global but local brand. Is that something Nestlé can generate enough returns from?
16.
Do you think the Nestlé Pure Life brand itself will be sold, or do you think it will just be the assets, which the new owner will rebrand? Is there any goodwill?
17.
How do you think Nestlé will approach route to market, sales and distribution in the future? It is working with a local distributor in China. Do you think that will be the same across most of APAC? Presumably Thailand will be different, because it has a local business there.
18.
Is the return on a global premium brand such as Perrier in Asia significantly different to a close-to-home market such as France, given the export cost?
19.
Would you say that the return Nestlé can make with Perrier in APAC is not dilutive to the total Perrier franchise, because the price positioning is very different?
20.
What are the key environmental drivers in the APAC region? What are the pressures faced by consumers and operators?
21.
Do you think the culture needs to change long term before companies can absorb the cost of more sustainable packaging?
22.
To what extent do Nestlé and Danone’s approaches to sustainability differ from their local competitors?
23.
You mentioned Nestlé and Danone have very similar approaches. How do they compare to the local competitors, who will become a bigger part of the water market?
