The Group performed commendably
despite the challenges in 2013,
with a strong domestic growth more
than offsetting the slight contraction
in the export business to affiliates.
To support and sustain the growth
momentum from the previous year,
Nestlé increased its marketing and
promotional activities in 2013.
This has resulted in strong domestic
sales with several product categories
such as Confectionery, Liquid Drinks
and Food registering double-digit growth.
The Group has also strengthened its
market share position in the Food and
Beverage category with this overall
good domestic performance.
The export business represent sales to
affiliated companies in other countries
which distribute Nestlé products locally.
The contraction in exports was largely due
to lower demand from affi liated companies
owing to the global economic environment
which has become more challenging as
well as a softening in demand for some
export categories. The lower export
volumes, however, created opportunities
for the domestic market to grow as the
extra capacity available supported the
higher local demand.
Within the domestic business, some of
the product categories grew faster than
anticipated, requiring the Group to focus
its efforts in increasing production
capacity to ensure the uninterrupted
supply of these products.
This was reflected in the Group’s
investments during the year, which
amounted to RM214 million, mostly
dedicated to increase the production
capacity of the Liquid Drinks,
Confectionery and Noodles categories.
One of the key investments to further
increase capacity was the construction of
the Sri Muda Factory, a new manufacturing
facility in Shah Alam, which will initially produce a variety of ready-to-drink liquid
beverages, a category which has seen a
sharp increase in demand in recent years.
The construction of this new plant
started in mid-2013 and is expected
to start commercial production in the
fourth quarter of 2014.
The strong performance during the
year was also enabled by the continued
application of the Nestlé Continuous
Excellence (NCE) – a global framework
to improve working processes and
effi ciencies within Nestlé.
As a result of the improvements,
the Nestlé factories collectively have
increased their productivity by 3.3% while
successfully reducing the conversion cost
up to 10.0% of some key product items.
In addition to the increased productivity,
Nestlé also managed to reduce energy
consumption with a saving of 2.3% of
energy usage per tonne product recorded
for the year under review, surpassing the
annual target of 2.0% reduction.
The on-going internal improvements
spurred by NCE have also resulted in
a reduction of consumer complaints
by 9.0% in 2013.
The Supply Chain performance also
continued to rise this year, with its
customer service level registering a
40 bps improvement. In addition to that,
the accuracy of its demand planning
sustained its upward trajectory, whilst
at the same time successfully reducing
stocks of raw and semi-fi nished materials,
as well as fi nished products.
On-going efforts by the Group’s logistics
arm helped reduce CO2 emissions,
which not only resulted in a reduction in distribution expenses per kilogramme
of delivery, but was also successful in
minimising its impact on the environment.
This achievement in overall carbon
footprint reduction was acknowledged
as the Group received the Notable
Achievement in Environmental
Performance and the Selangor State
Award at the Prime Minister’s Hibiscus
The retail operation, meanwhile, was
further enhanced as the Sales Team
continued its focus on ‘Being Brilliant at
the Basics’ through activities such as the
GPS coding exercise, where new outlets
were identifi ed and included in coverage
plans. This resulted in an increase of
direct coverage of 4,000 retail outlets,
which improved the availability and
representation of Nestlé products in
Working closely with selected partners,
the Sales Team also implemented the
‘Perfect Store’ concept in several stores
across the country to improve sales.
This involved the remodeling of fl oor plans,
display areas and shelves to leverage
shopper traffi c and purchase patterns,
which were derived from shopper insights.
A major highlight during the year was the
Bonanza Hari Keluarga Malaysia Nestlé
– a nationwide contest to encourage
consumers to purchase Nestlé products
with an opportunity to win prizes worth
up to a total of RM2.6 million.
The contest was promoted through
a comprehensive and integrated marketing
campaign that included extensive
on-ground activities with more than
25,000 multi brand displays in stores
nationwide, above-the-line support with
over 140 print advertisements and more
than 3,000 television commercial spots,
and digital communication.
The extensive activities supporting this
campaign clearly paid off, as the response
from consumers was overwhelming
with almost 800,000 entries nationwide,
resulting in a signifi cant uplift in sales in
the month of September.
To maintain the continuous success of
the business, the Group also focused on
recruiting and nurturing the best talents.
Nestlé partnered with top universities and
relevant agencies, such as TalentCorp
Malaysia, and also took part in career fairs
at local and overseas universities.
Through these engagements,
undergraduates had the opportunity to
learn more about Nestlé and in return
Nestlé was able to build a network of top
To nurture these young talents, Nestlé has
in place various programmes designed to
support their personal development and
create a pool of talented future leaders.
The Nestlé Internship programme provides
an aspiring experiential learning platform
for undergraduates to gain hands-on
exposure and mentoring in their fi eld of
study, while the Nestlé Management
Trainee programme helps develop
fresh graduates in the areas of Sales &
Marketing, Finance, Supply Chain, Human
Resource and Technical & Production.
In 2013, Nestlé recruited 20 new
Management Trainees from a total
of 1,500 applicants.
As an employer that cares for the
wellbeing and development of not only
its employees, but also their families,
Nestlé awarded 20 students whose
parents are Nestlé employees and retirees
with the Nestlé Scholarship Awards,
doubling the number of scholarships
awarded from the previous year.
Through this initiative, selected students
will receive RM7,000 annually for the
entire period of their degree programme.
They will also be given priority in the
practical internship programme and work
opportunities at Nestlé.
Due to the Group’s important investment
in its people, Nestlé is widely
acknowledged as a leading employer and
a great place to work.
This is confirmed by Nestlé winning the
Most Popular Graduate Employer Award
2013 for the FMCG/Retail category.
Nestlé is also currently ranked as one of
the top 10 companies in Malaysia’s 100
Leading Graduate Employers – a huge
improvement from the 23rd position in the
In 2013, the number one chocolate malt beverage brand in the
country, MILO continued to leverage on its brand by reaching out
to all Malaysians, advocating healthy and active lifestyles.
It launched the MILO Breakfast Movement, a campaign that
emphasised the importance of breakfast, through a series of
interactive and educational activities, which culminated with the
Malaysia Breakfast Day celebration at University Putra Malaysia
on 19 May 2013.
Having successfully engaged with more than 200,000 Malaysians
through this campaign in 2013, MILO plans to continue to host the
Malaysia Breakfast Day celebrations annually, as it is committed to
further cultivate good breakfast habits amongst Malaysians.
Additionally, in its effort to drive the true value of sports and
develop young local athletes, MILO in partnership with the
Olympic Council of Malaysia launched the MILO Fuel for
The aim of this campaign is to obtain support for Malaysian’s
contingent in the 27th SEA Games in Myanmar, which was
offi ciated by Y.B. Encik Khairy Jamaluddin, Minister of Youth and
Sports Malaysia in August 2013. MILO successfully collected
2.7 million MILO Flames to support the Malaysian contingent.
This campaign will be more than just a one-time sponsorship,
as it aims to empower young athletes to further develop
their talent, and inspire parents to encourage their children to
participate in sports from a young age.
In 2013, NESTLÉ OMEGA PLUS collaborated with retail
partners and the Heart Foundation of Malaysia (HFM) to drive
higher heart health awareness, through initiatives such as the
Go Red Campaign.
Through this campaign, more
than 100,000 cholesterol checks
and sampling activities were
carried out in selected shopping
malls and supermarkets. It was
well received by shoppers,
which led to a higher trial rate
and increased sales for the
Together with the HFM,
NESTLÉ OMEGA PLUS also
organised several health related
activities, such as Walk A Mile
and Heart Health Screenings,
in conjunction with the World
Heart Day on 29 September
2013. The Walk A Mile event was also attended by Tun Dr.
Mahathir Mohamad and Tun Dr. Siti Hasmah Mohamad Ali.
Celebrating its 75th year anniversary in style, NESCAFÉ carried out
a series of fantastic in-store promotions, on ground engagements
and roadshows, which excited consumers throughout 2013.
The theme of the celebrations, ‘75 years of great coffee and
counting’ aptly reflects the brand’s legacy in the history of coffee
around the world, as well as its promise to continue providing the
best tasting and quality coffee to consumers.
True to this
a new variant,
especially for those
who love the taste
of rich coffee with
milk and caramel
flavour. This new
product has been
popular with online
It also introduced a new coffee machine, Melody, which has
the capacity to produce six cups of drinks, thus making it more
convenient for entertaining friends and strengthening NESCAFÉ
Dolce Gusto’s promise of delivering café style beverages at home.
To further enhance its brand image and value proposition, the
NESCAFÉ Classic and NESCAFÉ 3in1, were both re-packaged.
To deliver a better coffee experience, the NESCAFÉ 3in1
was reformulated to enhance its overall richer coffee taste
Demonstrating its position as the coffee of choice, 7 out of
10 consumers chose NESCAFÉ Menu Ipoh White Coffee over a
competitor’s, during a taste challenge.
The Food business sustained a double-digit growth and boosted
market share, through focussed support for the noodles and cooking
aids categories. Operational savings generated across the value chain
fuelled increased investments in brand communication and product
MAGGI started the year with the launch of MAGGI Magic Meals, an
innovative cooking solution that allows the preparation of delicious
homemade meals alongside rice in a rice cooker. This revolutionary
approach to cooking is currently gaining traction in the modern trade
MAGGI Cukup Rasa, the leading all-in-one seasoning saw incredible
growth and rise in market share, following better media support and the
launch of its 25g pack, which increased its availability in top-up shops.
Responding to consumers’ demand, MAGGI Big Kari 101g was launched through
an integrated marketing campaign, which included celebrity endorsements,
in-store displays and exciting promotions. The launch successfully generated a
strong buzz in the market and increased MAGGI’s share in the noodles market.
MAGGI capitalised on positive consumer sentiments towards its culinary
products through affi nity programmes that promoted the goodness of home
cooking amongst youth. In its secondary school cooking competition, which is in
its 17th year, students from 16 states prepared signature homemade dishes and
participated in cooking and nutrition workshops.
Nestlé Professional teamed up with the Chefs Association of Malaysia, to produce
the ‘Amazing Inspirations’, a recipe book that highlights the nation’s best chefs’ culinary
skills and creative recipes that use MAGGI, to inspire aspiring young chefs in the industry.
Designed specifi cally for local and fusion cafés, MAGGI Oriental
Barbecue Sauce, a unique barbecue sauce with a touch of Asian
spice was launched in 2013. Its distinctive fl avour of spices allows it
to be used in a marinade or as a glazing, stir-frying or dipping sauce.
In 2013, an international QSR (Quick-Service Restaurant) chain
introduced NESCAFÉ Milano as part of their beverage menu.
They ran several campaigns such as the Breakfast with
Coffee campaign to encourage their customers to choose
NESTLÉ LIQUID DRINKS
In 2013 the Nestlé Liquid Drinks business achieved double-digit growth for the fourth consecutive year and gained market share in both
MILO and NESCAFÉ Ready-To-Drink categories.
One of the key reasons for this was the strengthened route to market thanks to improved distribution coverage and increased
Additionally, several creative campaigns were implemented to excite consumers
and drive sales. For example, MILO UHT Packet drinks ran the Fuel for Champions
campaign, which featured popular Malaysian footballer, Nazmi Faiz; and NESCAFÉ
Can launched a creative campaign based on music, which featured popular artist
These campaigns received positive feedback and strong online following, thus
helped to increase market share and enticed new consumers.
To provide more choices for consumers, NESCAFÉ Smoovlatte and BEAR BRAND
were launched in 2013.
NESCAFÉ Smoovlatte is a café style latte that has a strong aromatic blend of
NESCAFÉ coffee and milk, whilst BEAR BRAND is sterilised milk, which has a
strong brand presence in East Malaysia.
NESTLÉ ICE CREAM
Confectionery maintained strong double-digit growth in 2012 driven
by both the domestic business and direct exports. KIT KAT strengthened
market leadership in the count lines segment and continues to be the
main growth driver.
KIT KAT remains successful with its digital communication programs
and in-store activities while Nestlé Wafer, which is targeted
at the mass market, stays driven by strong marketing support and
2013 was another great year for the Confectionery business,
as it successfully maintained its double-digit growth.
This commendable performance is largely attributed to the
robust sales of its domestic and export businesses.
A key brand under this category, KIT KAT, reaffirmed its position
as the brand leader with a strong share in the confectionery
market. This success is driven by the brand’s innovative and
exciting campaigns throughout the year.
Nestlé Chilled Dairy business continued to deliver growth during
the period under review. Nestlé BLISS, the leading yogurt drink
brand in Malaysia continues to recruit new consumers while
increasing consumption amongst its light and medium users.
In addition to that, the Nestlé Natural Set yogurt maintained its
double-digit growth, thus strengthening its position as the market
leader in the segment.
An exciting new range of Nestlé Greek Yogurt was introduced in
2013, targeted at the premium yogurt segment. The new range
comprises of three variants - Natural Variant, Strawberry Field
and Peach Harvest. These new varieties are creamier in taste
and more nutritious, as they are a source of protein and calcium,
with low fat content and no added sugar.
MATERNAL & INFANT NUTRITION
2013 has been a year of continued product innovations for the Maternal & Infant Nutrition
business, in line with its START WELL STAY WELL commitment to nurture a healthier
The Nestlé CERELAC Yogurt, which comes in two variants – Yogurt Cherry Apple and
Yogurt Mango Orange – were introduced, offering the goodness of yogurt, BIFIDUS
BL probiotics and cereals, true to its promise to provide Big Nutrition for Small
The new LACTOGEN 3 Honey launched this year provides good nutrition added
with active friendly bacteria, Lactobacillus Comfortis. This product is especially for
those young children with developing taste buds who desire variety in their milk
The business unit also
introduced a new and
for NAN Grow 3 and
NAN Kid 4. These
great products provide
100 million BIFIDUS
BL probiotics every
day to increase the
number of good
bacteria in a child,
thus supporting their
The HealthCare Nutrition business’ continued double-digit
growth in 2013, largely attributed to the performance of
NUTREN Untuk Diabetik, a strong number two brand
in the diabetes nutrition category.
This established brand had successfully reached out
to more than 40,000 diabetic consumers throughout
the country, through a series of educational campaigns
organised in collaboration with Non-Governmental
Organisations and business partners.
To further strengthened its position in the diabetes
nutrition category, the HealthCare Nutrition business
launched ISOCAL DM, the first affordable and great
tasting diabetes beverage, targeting the middle-income
diabetics and pre-diabetics.