Innovating the future

Research & Development for Nutrition, Health and Wellness

Contents

20 Fro Building on Nestls m Peter Brabeck-Letmathe 5 Preface co ns Werner Bauer um er ins igh t to pro du cts 38 Wo rki ng for the co ns um er of tod ay an d for the wo rld of to mo rro

Foreword
s a reorienta tion of our R&D efforts toward s life scienc e and an open collabo ration enviro nment that consta ntly deliver s bigger, bolder and better innovat ions.
Althoug h we have more than 4500 people in Nestl Food and Beverage s R&D, we cannot achieve our ambitions simply by working internally. We increasing ly operate in an Open Innovation mode to enhance our own internal R&D capability by tapping into external

At the beginnin Thr g of this oug century, Nestl h made our the strat strategic egie decision to s transfor we m itself anti from a cipa success ful, te technolo the gyfutur driven e. food and Thr beverag oug es h compan our y into an R&Dacti and ons marketi we ngsha driven Nutrition pe , Health the and futur Wellnes e s Group. Tur ning Peter this Brab eck- strateg Letm ic athe vision into reality require

resour nership ces. s are

To do this, we have built up a netw ork of som e 300 exter nal rese arch instit ution s, allow ing us to work regul arly with scie ntist s and tech nolo gists in univ ersiti es, rese arch esta blish ment s and priva te indu stry all over the worl d. T hes e part

Nutrition, Health mutuall and y Wellness benefici products al. We in the benefit form of from beauty identifyi nutritional ng new suppleme opportu nts. We nities expect and similar integrati breakthro ng ughs them from into our collaborat busines ion with s. Our Galderm partner a, one of s the benefit worlds from leaders in access dermatol to our ogy. speciali R& st Ds knowle role is dge one of and our creatin tradition g of best- bridge in-class s not technol only ogy. outsid Open e the Innovatio Comp n also any opens but the door also to greater across innovatio the n Comp cooperati any. on That between way companie we are s building affiliated a wide with base Nestl. from Joint which research to drive by Nestl our and Nutritio LOral is n, leading to Health totally and innovativ Wellne e ss

tran sfor mat ion and furt her bus ine ss gro wth .

e pipelines beyond the next five years. Today we already think more like a life science company, with Open different Innovatio projects n to the in outside is different the way phases at forward. any given But time Nestls some in success developm is and ent or always conceptu will be alisation, decided some in inside the clinical Company or . We cons continue umer to listen trials to our , and consumer other s and s in anticipate their their laun future ch needs. phas We are e. proactive and aim For for fewer Nestl to and achieve bigger all of this, breakthro R&D ugh takes on innovatio even ns. For more our importanc Nutrition, e. It forms Health the and scientific Wellness base and products, creates this the means proprietar establishi y ng technolog innovativ y

platfo h and rms inWellness. Peter order Brabeckto be Letmathe leade Chairman r in of the Board Nutriti and Chief on, Executive Healt Officer

Preface

R&D is one of Nestls strengths. It

The shape of the Nestl Group and the nature of our relationship with consumers are significantly
dependent on Nestl R&D

Working closely with leading

universities and outside partners on cutting-edge science and technology;
Recruitment of open-minded and passionate innovators who can bridge science, technology and

always has been. We constantly leverage our scale to new and more challenging heights. Innovation is the first pillar of our corporate strategy with Nutrition, Health and Wellness a core value. Being faster and closer to the consumer through R&D considerably strengthens Nestls leadership in Nutrition, Health and Wellness, where the body of world knowledge grows continuously. Insights like subtle biochemical markers, make the science of nutrition the prime mover in health maintenance and disease prevention. More and more consumers, in developed and developing countries alike, want to benefit from products and personal solutions through foods and beverages that contribute to their health and wellness. To intensify our excellence in the consumer-food relationship, R&D works more and more in an open innovation mode. We actively involve scientific and technical expertise from many external sources. Nestl R&Ds role includes the knowledge management needed in the multidisciplinary sciences and technologies that form the basis of innovation in Food, Nutrition, Health and Wellness. Our innovating the future leadership strategy is based on:
Continuous improvement in consumer insights and their translation to innovative products built on superior science and technology; Harnessing the vast expertise in our unmatchable research and development network;

Werner Bauer

business needs; Bigger pioneering innovations that hit the innovation sweet-spot where best-in-class science and technology combine to deliver precisely targeted Nutrition, Health and Wellness benefits that lead to significant business success.

For Nestl, safety and quality are nonnegotiable. R&D plays a key role in ensuring the best in products and processes. The further Nestl moves along the road towards the Nutrition, Health and Wellness Company, the more this role becomes important. This booklet on Food and Beverages R&D in Nestl shows examples of our many successes. You will see how R&D at Nestl is unique in its set-up and approach. How our core sciences and technologies support future growth. How we protect our intellectual property and knowhow. How we operate to optimise quality and safety. And, above all, how we ensure that the consumer is at the heart of Nestl R&D. The future is in our hands.

Werner Bauer Chief Technology Officer Innovation, Technology and Research & Development

Building on Nestls leadership in Nutrition, Health and Wellness

Nestls unique Food and Beverages R&D structure

Nestls vision for the future is to occupy centre stage as the Worlds Food, Nutrition, Health and Wellness Company through Good Food, Good Life. Nestl products embody clear and relevant consumer benefits
Nestl R&D generates the innovative science and technology needed to build nutritional and health benefits into products Nestl Food and Beverages R&D offering Nestls legendary sensory excellence. It thus plays a key Global strength, local development strategic role in realising the Nestl vision, helping to assure the This unique structure offers: Groups sustained growth. 0 Vertical Nestl acts on the principle of think global act local. R&D is alignment for products and structured accordingly. Global product and process development is processes in vertically integrated into all Nestl core businesses and pushed out specific product locally to the markets through some 500 factories in 100 countries areas; worldwide. Throughout Nestl, 265 000 people make a valuable 0 Horizo ntal contribution by their links across all sectors. At the local level, Nestl crossfunctio interacts daily with over one billion consumers.
nality across all busine ss areas and activiti es.

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For strategic alignment, The R&D structure offers the flexibility to use this huge source of local ideas, bring them back and R&D interfaces with the develop them for global implementation. This adds the Strategic Business Units power of broad-based consumer insight to the power (SBUs). The SBUs all of innovation. Together, these global and local coordinate strategies within approaches give us the capacity for rapid response in the individual Nestl business an ever-faster changing global socio-economic categories. This includes environment. investment, competitive

analysis, key performance indicators, quality & strategic brand standards and portfolio management.

The Nestl Research Center (NRC) is internationally recognised for its ground-breaking work in the food and nutritional sciences. In-house expertise, reinforced by close collaborations with Nobel Prize winners and prestigious universities, provides a solid base for R&D innovation across all Nestl business sectors. 0 The Business Technology Centre (BTC) develops and enhances all our business systems to constantly improve the efficiency of Nestl operations. Eight Product Technology Centres (PTCs) each employ in a single location the critical mass of experts in food technology and engineering to act as a hub for all global product and process development in one or more of Nestls businesses.

Nine R&D Centres have a dual global/local role, working closely with the Product Technology Centres in joint projects, but also fulfilling regional needs requiring R&D input. 280 Application Groups (AGs) based in Nestl factories supplement the R&D process at the local level, ensuring that products comply with local regulations and taste

preferences. They also work with experts from PTCs and R&D Centres in the factories to install and test new process lines and ensure first-line followup in day-today operations.

6 Building on Nestls leadership in Nutrition, Health and Wellness

Innovating Nestls future through shared values for the Group and the consumer
Food and Nutrition are part of the solution to offer consumers health and wellness. Physical activity and other lifestyle factors also play their role. Nestl goes beyond product innovation, providing wider health-solutions through consumer education in nutrition and personal lifestyle coaching
R&D has been in Nestls genes ever since Henri Nestl invented the first Infant Food. For almost a century, Nestl fulfilled consumers needs through foods for sustenance and convenience. Modern lifestyle changes Why has personalised nutrition become important? from the 1950s brought new R&D challenges. With less <eeZ \eh <eeZ \eh ikij[dWdY[" and less physical work, with automobiles, labour saving Yedl[d_[dY[ WdZ devices, TV, video games, Internet, etc., consumers ikhl_lWb have increasingly more time to seek pleasure from their if[Y_\_Y dkjh_j_edWb d[[Zi 90 foods. But an imbalance between food consumed and physical activity have been paralleled by a huge increase in obesity and related non-communicable A^ [Z diseases. Z So Nestl asked the question, Are yesterdays good m eZ foods still the good foods of today and, if not, what do Xi we have to change? Nestls response is to produce Vc X foods that offer consumers Nutrition, Health and n Wellness, along with the essential ingredients of taste Vi W and pleasure. Consumers continue as before to make ^g their own choice of the food and beverages they i]n consume. Nestl helps Z
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them to make his or her individual choice the right choice. R&D must show the direction to take to meet the challenges imposed by the new consumer needs of today and tomorrow: 0 A broad portfolio of research projects across all Nestl product categories is revealing preventive nutrition solutions for weight and diabetes management, cardiovascular health, etc.;

The nutritional profiles of Elderly all Nestl products are consumers who continuously assessed, want to keep updating recipes and mobile and formulations. Applying mentally active state-of-the-art knowledge to prolong the in food safety and nutrition pleasures of life leads to continuous into old age; improvement, offering the really putting best products in the more life in the market-place; years, 0 A sustained R&D effort on Athletes who health and wellness products addresses want instant specific or slowconsumer groups: release Infants and young children for energy to optimal growth and development, match their Consumers of all ages needing sports special diets for certain health demand. conditions or in convalescence after surgery or trauma, Through this, Nestl R&D is opening up a future where a more personalised nutrition will become a reality. Thus bringing shared values that benefit both the consumer and the Group. In its vision as the world Food, Nutrition, Health and Wellness Company, Nestl is making this future its own.

Building on Nestls leadership in Nutrition, Health and Wellness 7

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