Karthik Rao May 2, 2013 IDENTIFYING OPPORTUNITIES IN DEVELOPING MARKETS

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 2 WHERE IS THE GROWTH COMING FROM? DEVELOPING MARKETS WILL BE 80% OF WORLD GDP OF WORLD POPULATION THAT WILL BE MIDDLE CLASS BY 2020

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 3 A STORY OF TAILWINDS AND HEADWINDS TAILWINDS Urbanization Income growth Premiumization Modern Trade Growth HEADWINDS Rising costs Slowing growth Consumer "Diversity” Retail fragmentation

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 4 Manufacturer Sales Projection 5 Categories Aggregated– All BRIC Markets LOCAL COMPETITION – FORMIDABLE… GROWING +102% +57% POINTS OF DIFFERENTIATION They innovate Strong in mid/lower price tiers Stronger in Rural areas / Traditional Trade Relentlessly work distribution

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 5 Blue Moon Share Trend Value Share by Fiscal Year LOCAL GIANTS LAUNCH: CHINA EXAMPLE BLUE MOON PRODUCTS Blue Moon in China, 1 st major brand to enter the liquid laundry segment, gaining share FIRST MAJOR LIQUID LAUNCH IN CHINA

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 6 FORMIDABLE CHALLENGER TO MARKET LEADER - INDIA 2. Optimal Distribution Expansion1. Innovation WHAT THEY DID WELL NESTLE INDO NISSIN GSK HUL ITC WEIGHTED DISTRIBUTION

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 7 FORMIDABLE CHALLENGER TO MARKET LEADER - INDIA HOW DID THEY WIN Differentiated Yippee successfully from Maggi noodles Captured nearly 10% of market in 2 years ITC YIPPEE % MARKET SHARE LAUNCH ResultsMarket Share

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 8 PREMIUMIZATION CHINAINDIA THAILANDINDONESIA VALUE CAGR OF ‘PREMIUM’ SEGMENT:

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 9 9 INNOVATION……FINDINGS FROM CHINA… BUILD A SEPARATE INNOVATION TEAM MAKE TIME FOR IDEATION LAUNCH WITH EXCELLENCE HAVE A RIGID AND CONSISTENT PROCESS

Copyright ©2012 The Nielsen Company. Confidential and proprietary. 10 SUMMARY Headwinds, tailwinds…..who cares….long ways to go with tons of opportunity…….local competition: study them, partner with them…..buy them! Turn consumer diversity & retail fragmentation into your friends……there is no other way Premiumization is real – think of it as a consumer trend that needs marketing, not the other way around Innovation & process…..it’s what differentiates MNCs against local competition