Good morning, ladies and gentlemen, and welcome to our nine-month results conference in Vevey. This conference will be held in English, but you can also follow it in French or German using the headsets provided. If you're watching the webcast, you can choose the right language by clicking on the respective link on the webcast page. I take the safe harbor statement as read. Now let's start. Paul, you have the floor.
Thank you, Robin. Welcome to our nine-month sales conference. I welcome also all the people following us via the webcast. Here on the podium, I have François-Xavier Roger, our CFO, who has taken over the 1st of July. Many of you have met him before. He has taken over from Wan-Ling Martello, who is now in charge of Zone Asia, Oceania, and Africa. In the room, I have my colleagues, the executive board of Nestlé. In the executive board, we have also a new member, Magdi Batato, who took over as Executive Vice President in charge of operations from José Lopez, who retired at the end of September. Magdi has very vast experience in manufacturing and in the technical area, has also been previously market head of Pakistan. Magdi, welcome.
We have in the room the CEOs of Nestlé Health Science and Nestlé Skin Health, and they're also available for possible answers. You've seen our nine-month sales figures this morning, and I must say, after a good performance the first half of the year, we were impacted in the third quarter by the Maggi noodles in India, still ongoing, and the rebate adjustment in Nestlé Skin Health. We're not happy with that because it actually hides, first of all, an increase in internal growth that has increased to 2%, actually in the third quarter, almost 3% real internal growth. That reflects actually what's underlying. It reflects the very positive momentum we have in our base business across all the different categories and across the world. UBC continued good, solid performance in Europe. Nestlé Waters is continuing on a very, very good growth path.
Nestlé Health Science is growing also strongly. We have made and continue making good progress in Latin America. We saw also a significant improvement in North America in many categories, but especially in frozen food. This contrasts a little bit with a slower recovery. Recovery indeed, but slower than expected in China. I will give now the floor to you, François, to give a little bit more light on the details.
Thank you very much, Paul, and good morning, everyone. As always, I will present to you the group nine-month sales figure in detail, and we will follow up with the Q&A later on. Starting with the highlight, we have sales of almost CHF 65 billion. With some headwinds from foreign exchange worsening, it was actually -6.7% in the first nine months. We had some positive support as well from M&A, contributing 0.4%. Our organic growth lies at 4.2%. After a good start of the year, the third quarter got impacted by two exceptional item: the first one at Nestlé Skin Health, and the second one with India noodles. Coming back to the Nestlé Skin Health one, we took a one-off charge in prescription drugs in the U.S., where we decided to adopt a more conservative estimate to rebates.
In India, as you know, our products and our Maggi noodles have been off the shelves for the last six months. Our real internal growth is at 2%, which is an acceleration from where we were at in H1. We were at 1.7%. We see that as very encouraging. We believe that it shows really the fundamental health of our underlying businesses, and it shows the good progress that we have made. In terms of full-year outlook, we project organic growth of around 4.5% for the full year, with improvements in margins and underlying earning per share in constant currencies and capital efficiency. Moving now to the geographies. These slides cover both the locally managed, regionally managed, and globally managed businesses. You can see that we have strong and accelerating growth in AMS and in MENA. The three regions are positive in terms of RIG.
In AOA, we got affected by Maggi noodles, but we see clearly an increasing RIG in both AMS and MENA. When looking at the profile of our growth between developed markets and emerging markets, we can see that the distribution of our sales between developed and emerging market lies about where it was before, at 57% for developed markets and 43% for emerging markets. In developed markets, we see an acceleration with an organic growth of 2.2%, which really shows the success that we are achieving in terms of innovation and the fact that we bring relevance to consumers. It also shows our ability to adapt to fast-changing consumer needs.
In emerging market, we are still enjoying a strong growth with encouraging result, and the growth in terms of organic growth lies at 6.8%, and which is, we believe, good, taking into consideration the fact that we could not sell Indian noodles for the last six months. Moving now to Zone AMS. We have sales of CHF 18.5 billion, RIG of 1.2% of OG of 5.8%. We saw a very good acceleration in both OG and RIG. The growth accelerated, driven by improvement in the U.S. and the continued momentum in Latin America. We had positive growth in North America. If we start talking about our U.S. frozen range, as you know, we did a lot of work in order to renovate, repackage, reformulate, reposition our frozen food franchise, and we are happy to see that the results are coming.
We have been positive for seven months in a row now, month-on-month in growth for our frozen food business in the U.S. If we look at the third quarter of the year, we were positive and even high single digits in growth against the same period of last year. Moving to Coffee-mate, we are still enjoying high single-digit growth in the last quarter. We see that as well as a consequence of all the innovation that we are putting through in terms of flavors, in terms of ingredients, and new natural platforms. As you know, we have a stronger business in pet care in the U.S. It has improved in the last year, and we are still positive in pet care in the U.S.
We are still feeling some negative impact from the Beneful unfounded claims, but we have strong performances as well from Purina ONE, Bright Minds, and the super premium dog food. Moving to Latin America, it continues to be a good growth driver. We have, in spite of a difficult macroeconomic environment, we have good growth in Mexico across all categories: coffee, pet care, ambient dairy, nutrition, and so forth. This really shows once again in Mexico that innovation, renovation, and excellent execution really pays off. I mentioned Mexico. I could mention as well Chile, Ecuador, Colombia. In Brazil, our business has been resilient in spite of the global macroeconomic environment. We are flat. If I look at the categories that are really driving the growth in Latin America, I would mention mainly Nescafé Dolce Gusto, pet care.
We have commissioned a new plant in Mexico. We have increased our capacity in Argentina. I will mention as well confectionery as far as Latin America is concerned. Moving now to Zone EMENA. We have sales of CHF 12 billion, RIG of 2.5%. OG at 4.1%. There again, same accelerated growth as what we experienced with AMS. The acceleration of the growth continue. We believe that what we have been doing in terms of innovation and premiumization is also paying off in spite of a difficult trading environment. Category-wise, pet care, Nescafé Dolce Gusto, and Nescafé soluble coffee were the main growth engine across the zone. If I take the three different areas of Zone EMENA, all of them have been contributing to the growth. If I start with Western Europe, we are facing clearly a deflationary environment.
In spite of that, our OG is positive and is driven by volume. Some countries are doing very well. France has been able to sustain a good performance. Benelux, Austria are achieving very good results. In Germany and in the U.K., we see our business improving as well. Moving to Eastern Europe, we have had good growth in Russia and Ukraine, which has been essentially supported by pricing. We decided a few months ago to limit our price increases in Russia and Ukraine after the depreciation of the currencies. It is now bringing interesting results because we are gaining market share both in volume and in value in Russia and in Ukraine. I mentioned Ukraine and Russia, I could mention other countries as well where we are doing very well: Poland, Baltics, Bulgaria, and Romania. Moving now to Middle East and North Africa.
There again, we experience solid growth driven by Nescafé and confectionery. Our local management is doing a great job delivering growth in spite of ongoing challenges from political and economic volatility. Moving now to Zone AOA. Our sales have reached CHF 10.5 billion with a RIG of -1.4% and OG at -0.5%. We had solid results in AOA in developed markets, which have been overshadowed by ongoing challenges in India and in China. In India, as you know, we have been impacted by the fact that we did not sell our Maggi noodles for the last 6 months. We are doing whatever we can in order to put them back on the shelves.
The Bombay High Court has ruled in our favor a few months ago to allow us to put these products back on the shelves, provided that we go through 2 different sets of tests, which are currently ongoing with independent laboratories. The impact of the fact that we could not market this product is to the group organic growth year to date about 30 basis points, and to the Zone AOA, it is about 170 basis points. Moving now to China. You remember that I gave a cautious outlook during our H1 results. We have made good progress in improving the fundamentals in China. We have reformulated our product. We have invested in innovation and renovation very much like we do in Europe. We have seen good results for our confectionery franchise with Hsu Fu Chi.
We have seen very good results for Nescafé Ready-to-Drink, for Nescafé soluble coffee. It's a little bit softer for ambient dairy with Yinlu. Clearly, we see an improvement of the fundamentals, which is visible, but we believe that it may take a little bit more time than what we expected. In AOA, in developed markets, the performance has been really driven by KitKat On Nescafé. Japan continues to sustain a solid growth helped by innovation. The same story as what we experience in Europe, innovation is making a difference in a deflationary environment. Moving now to our globally managed businesses, and I will start with Nestlé Waters. We had sales of almost CHF 6 billion with a RIG and an OG at the same level, around 7%. Water continues to be a great success for Nestlé.
We benefit obviously from consumer trends, the fact that consumers are moving towards safe and healthy beverages. For your information, we see now that in the U.S., we expect the water volume to overtake the volume of CSD pretty soon. Which is quite a dramatic change over where we were a few years back. We benefit, as far as our Nestlé Waters business is concerned, from a good geographical footprint and a balanced portfolio. We have a contribution from across the portfolio. Nestlé Pure Life is growing double digits. Our international premium water, S.Pellegrino and Perrier, are enjoying good growth in premium segment with high single-digit growth. And our local brands, some of them appear on the screen, continue to perform very well with the strong momentum that we have enjoyed over the last two years. Moving now to Nutrition.
We had sales of CHF 7.8 billion in the nine-month period, with a RIG of 1.4% and OG of 3.4%. The growth was a little bit lower than what we had in the past, but the fundamentals remain very good. The category is a little bit slower worldwide, and we are facing some temporary issues, but the growth is broad-based. We have some issue because we had some strong comparatives, especially in China in the first half of the year. We are feeling a little bit more lower pricing, mainly as a consequence of the fact that milk prices are getting lower. We have a little bit of volatility in Asia, Latin America, and India. The fundamentals remain anyway very good. Moving now to China, as far as Nestlé Nutrition is concerned.
Our infant formula growth is really led by the super premium range, Illuma, which continue to grow from a geographic point of view, and we continue to expand as well in e-commerce. Wyeth in China and Nestlé overall in infant nutrition continues to gain share. Our meals and drinks are enjoying a solid growth pulled by the poultry segment, which continues to be very strong. Infant cereals is doing well, led by Russia, U.S., and Poland. Let's now move to Other Businesses. As you know, Other Businesses is composed of four different businesses, Nestlé Professional, Nespresso, Nestlé Health Science, and Nestlé Skin Health. In total, these four businesses account for CHF 10.1 billion in the first nine months, and our RIG stood at 4.4% and OG at 5.5%. I will start with Nestlé Professional. The growth accelerated, driven by emerging markets and driven by beverage solution, mainly coffee.
Developed markets remained a little bit slower due to the continued challenge of the consumer environment. Nespresso, we continue to enjoy a good performance with international expansion. We are really driving the premium portion coffee segment through quality, innovation, and direct consumer access. As an example, we keep on launching new limited editions. The latest one that we launched, Milano and Palermo Grand Cru, have been very successful, and they have been the most successful ever so far. We meet very positive consumer response. They are selling fast, and it's really driving growth. The growth is also coming from the fact that we keep on opening new boutiques. We have opened 14 new boutiques this year, and we continue to expand from a geographic point of view and to gain new consumer reach. Talking about Nestlé Health Science, the growth is broad-based with Europe and AOA as the highlights.
Once again, it is about innovation and product rollouts, which are really driving performance. Nestlé Health Science is clearly accretive to group growth. Nestlé Health Science has three platforms: consumer care, which is growing double digits, medical nutrition, which is enjoying a good high single-digit growth, and novel therapeutic nutrition, which has been facing a little bit of issues lately because we had one of our products in the gastrointestinal segment, namely Lotronex, which had to face the launch of generic. Overall, for Nestlé Health Science, over the nine months, we can say that the business is performing well. I won't say too much because Greg will present the business in a few minutes. Moving now to Nestlé Skin Health. The low sales in the quarter relates to our prescription business in the U.S.
As you know, we are providing discounts to the trade and directly to consumer so as to facilitate their access to our products. Such discounts are reflected in our accounts through accruals on a monthly basis. In Q3, we reviewed the assumptions relating to these accruals, and we decided to adopt a more conservative estimate that resulted in a one-off adjustment in sales. It is very important to understand that this adjustment does not impact in any way the underlying growth and the fundamentals of the business, which remains both healthy and strongly accretive to Nestlé. Moving now to the product breakdown. If we look at breakdown by category, starting with powdered and liquid beverages, our organic growth and real internal growth accelerated compared to the first half of the year. RIG improvement was mainly coming from Mexico.
Growth is driven by coffee, both by Nescafé soluble coffee system, Nescafé Dolce Gusto, and Nespresso. Soluble coffee in Mexico and China had a significant contribution. Water, I won't cover it because I talked about it before. Milk products and ice creams delivered a 0.9% organic growth. The slight improvement in growth was largely thanks to ice cream, which had a very good summer. On the other hand, ambient dairy continues to be affected by challenges in India and in Brazil that we are currently addressing. Coffee creamers sustained their good performance in zone AMS, led by the Coffee-mate brand in the U.S. Nutrition and Health Science. This segment includes as well Nestlé Nutrition, Nestlé Health Science, and Nestlé Skin Health. The performance, as I described earlier, has been impacted by the exceptional event in Nestlé Skin Health that I covered earlier. Prepared dishes and cooking aids.
It has been helped by positive progress in frozen food in North America, where the first result of the turnarounds are promising. The negative impact of the Indian noodle case has affected our results. Confectionery, we are experiencing a strong organic growth driven by pricing in emerging markets, and KitKat is sustaining a good growth momentum in most countries. Pet care to finish. Organic growth and real internal growth accelerated. Europe and Latin America continue to be very strong. North America remains soft, affected by these low Beneful sales. We are seeing clearly some gradual improvement in the recent months. To summarize the nine months period, I would say that these results are solid results. We have made good progress in many businesses and geographies. I think it demonstrates the health of our underlying business fundamentals.
It demonstrates our capacity to innovate, it demonstrates our capacity to grow in difficult markets and in difficult environment, and our capability to turn around businesses whenever needed. Our RIG has increased and is in line with our expectation. Our OG is short of expectation, but this is due to exceptional items, namely Maggi noodles in India and Nestlé Skin Health. Our full year outlook, once again, we project to get organic growth of around 4.5% for the full year, with improvement in margins and underlying earnings per share in constant currencies and capital efficiencies. Once again, the business fundamentals are good. That brings me to the end of my presentation, and I will now hand it back to Paul.
Thank you, François. It's nice to see a little French accent coming in. You saw the results. I hope we could convey with you the real intrinsic strength of the figures and underlying businesses and also the geographic spread of that strength. I think that's particular to Nestlé. The strength of Nestlé's business is actually linked with its fundamental strategic direction. It's a direction that is linked with this famous nutrition, health, and wellness. Actually, that strategy is even more valid today than before. Why? Because the consumer is changing. The consumer is changing in its expectations towards that agenda. It is expecting, well, we get the older population, the health dimensions, the awareness, looking for more rational and scientific dimensions in food is going in our direction. Yes, Nestlé is all about nutrition and wellness. It's about enhancing lives.
That's our strategic direction. You're going to see, you're going to link it up of how we manage our portfolio. It is all about enhancing life with science-based nutrition and health solutions, and that for all stages of life, so that we can help consumers to care for themselves and their family. That is the glue. That is the purpose of everybody in this company. 340,000 people are working towards that end. That end is the fundamental base of our value creation. We work in this every day. We do that, and I have mentioned that and shared that with you. We do that through our fundamental food and beverage business. That's what we are. We're almost 150. Next year, we're going to be 150 years old. That's what we have done from the onset.
It is all about good food, good life first. To deliver and to offer tastier and healthier choices in food and beverages. That, again, for all stages of life, every moment of the day, for every consumer in the world. That is what characterizes us. Yes, at the same time, the last years, we have been building up new platforms that go in that direction by extending the boundaries of nutrition. Platforms that do embrace and that do promise very, very strong, valuable, profitable growth in the future. With Nestlé Health Science, that we started in 2011, and we have Greg Behar, who's going to walk us through that, what have we done, where are we up to, and what is the expectation.
Also last year, we brought in Galderma Nestlé Skin Health, where we see so much compatibility with health and the scientific platforms too, and the promise of healthier and quality of life. Let me walk you through this A fundamental concept of inner strength of our portfolio. It's all about portfolio building. A portfolio that promises building blocks that are projecting good growth. It is building product services, it is building platforms that deliver differentiation, and that with strong potential value creation. On the line of nutrition, health, and wellness. We evaluate and judge our businesses. We evaluate the new businesses we engage in, basically on three criteria you see there. It has to fit our purpose, nutrition, health, and wellness. It has to be, or project profitable growth. We have to be able to win in the categories where we engage in.
Also the relationship with what intensity of resources we need to do that. That is not only finances, it's not only return on invested capital, it is also our R&D set up, our talent that we have, our resources in general. We take action, where we really have good traction, we accelerate. We have increased investments in different areas of our business because they do entail and they do promise good growth, profitable growth, or we have to protect the solid base businesses that we compete in with leadership, or we have to fix. That is what we have done and are doing now for so many years. First, our base business, you have heard about our 60/40+. It's not just a small tool. This is a fundamental philosophy, action with which we go about our portfolio.
That is really driving nutritional arguments in our base business to build into people's lives nutrition, health, and wellness arguments in daily life. The biggest driver, as I said, is 60/40+. It is all about testing and turning our portfolio towards what we have called Nestlé Nutritional Profiling System. It's a profiling system that defines criteria that are based upon up-to-date science and nutrition science and public health recommendations, be it from authorities such as the WHO, U.S. Institute of Medicine, European Food Safety Authority, et cetera. It is a framing that is neutral, it's objective, we drive science to it. Some figures around this, you see them there. We have a policy on sodium, on sugar, saturated fats. This isn't just a policy. This is driving our R&D, this is driving our reformulation. In the last few years, we have reformulated.
It's substantial, we have reformulated 44,000 products for nutrition and health consideration, 22,000 products reformulated only on the axis of sugar, fat, and saturated, and sodium. 27,000 products with increase in nutritional ingredients and arguments. We have permanently one-third of our SKUs, one-third of our products that are going through this process. Actually today, this strategy is more relevant than ever because the consumer is moving in that direction. The expectation of the consumer is moving in that direction, be that he is health aware and asking for free from, gluten-free, lactose-free, meat-free. We have them moving towards more vegetarian and plant-based options. He is looking for authenticity, clean label, organic, natural, local, et cetera. These are all dimensions that actually are a part of the nutrition, health, and wellness agenda. We have been working on that for so many years.
We have responses, you can see a good example of that is what we have done with frozen food in U.S. This was with Lean Cuisine, Stouffer's also, with DiGiorno Pizza, Hot Pockets. This was an overall approach. This was, I have mentioned that in February, reconnecting with the consumer base. This was linked with new products, new formulations, repositioning communication, Lean Cuisine Marketplace is playing into that. We have improved new health benefits, opening it up, not having it on the narrow base of health, of lean, but on healthy diets and healthy eating. We have the same done with Stouffer's on trend, building in more ethnic cuisine arguments there too, the new campaign is working well too. Well, the first signs are very strong. We are outperforming definitely the category.
The shared trends for both Lean Cuisine and Stouffer's are positive. As we are a leading player there, it has lifted up the whole category. You may have seen also that we have new capabilities in Solon, where we have our frozen business in the U.S. with the state-of-the-art PTC, Product Technology Center, where actually that is driven. We have brought in from different parts of the world our capabilities in there to have really the frozen food center, I would say, of the world. That is a fantastic base to build further for the future. We have spoken about China is on the same path. It just takes us a little bit longer, and why? Well, I think there are other dimensions to the complexity or to the challenge in China, which is also the trade.
We have spoken about the trade, now we have to deepen our footprint. The global environment of China is a little bit softer too. There's so much good going on in China. We have been increasing the relevance again to a moving consumer also in China, on the same accesses. We have increased the relevance of our categories. We have also strengthened our route to market capabilities with expanding distribution. Coffee in general, be it instant coffee, has almost double-digit growth and market shares gains. RTD coffee is growing very strongly. We have also our joint venture business with Hsu Fu Chi that is going very strong, et cetera. The e-commerce is definitely the platform that we are embracing in China. It is growing, almost doubling for what goes for the year. It is going up at 6%, 7% of our sales in China already and going strong.
Yinlu is a challenge. Yinlu is a challenge because Yinlu is a product that combines all the different challenges, distribution too. We have reformulated, new products have to come in still in the latter part of the year, and that is still to grow faster. Infant nutrition is growing very well in China, health science also. China is a mixed bag, it's recovering. It is not recovering as fast as we think. It is not recovering as vigorously as we think. I do believe the momentum is building up and definitely we remain extremely optimistic for China. China is a focus area for us. We have invested, we see positive momentum coming back. At the end of the day, portfolio management is not with new expectations, going for new brands. Portfolio management is investing in our brands we have. They have that promise.
We have the science. We have the brand equity with the consumers. It is caring for our existing brands, that is what we have done, we take time for that without losing time. We are investing in our brands. Kit Kat is a good example. Kit Kat is almost 80 years old, Kit Kat brand is more vigorous than ever. Kit Kat, a few years ago, was in 40 markets. It's now rolled out in 80 markets and growing double digits. It is a multi-billion brand already and still has a huge potential. Nespresso, you know the story about Nespresso. It is investing upfront on the right things with the right arguments and give time to that. We are now in over 65 countries. Same thing with Dolce Gusto, more recent. It's almost 10 years old.
It's over a billion-dollar business, rolled out in 70 countries. That's a capability that Nestlé is embracing more and more. It's going after our brands and investing in them. There I have a small little personal thing, which is Cailler. Cailler, I'm confident it's going to be the same story. We're going to start very humble. I have mentioned that was my little intimate frustration. Nestlé, known for its chocolate expertise and all that, not being in the luxury segment. We're going to embrace this potential. Cailler is a 200-years-old brand. It's one of the oldest brands we have in our portfolio. It's iconic. It stands for Swissness. It stands for that authenticity and knowledge and expertise for the finest chocolates. We're going to start. We're not going to start broad. We're going to start narrow.
We're going to embrace actually an iconic brand, 200 years old, with the newest of the newest, which is e-commerce, blending that into a winning platform. We've started a few markets, USA, Germany, U.K., and Asia and China. We're going to be there in a few days' time. We're going to embrace it with partners, Amazon is our partner helping to build that up there. We're going to be in specific airports, only four, Geneva, Zurich, Dubai, and Singapore to start with. I promise you, this is going to be a good story, and I invite you to walk this journey together with us. It is building on existing brands, building the newer dimensions, building the new arguments into it. E-business, that brings me also to e-business.
I have mentioned e-business as one of these priorities of our company, it is a priority that we have been working on quite intensively. We have brought in talent. We have built up the teams centrally and linked up with the markets, just like we have done with our acceleration team. You may remember our digital platform of social media. There again, we have been building these teams. They have been planning and rolling out our strategy and plans. We are engaging with the major players in that field on all axes, be it the brick and mortar, the pure players, et cetera. That is going very strongly for us. We think we have the ingredients to accelerate what we already have. Nestlé in e-business is already over a CHF 3 billion business for us. It's closing into 4% of our sales already.
It looks small, it is substantial. The most important part is it gets traction, we have the structure and the mindset to go after that. Another thing is strengthening portfolio is divesting. It is really going after what we don't see fit strategically, or we don't see fit for profitable growth and making these choices. We have accelerated our action behind that last years. When there's a clear absence of fit, we have to alienate it from the business. If we finish, and I hope soon, our business, I'm not going to walk you through it, but you'll see we're going to have, in the last four years, divested an equivalent of CHF 2.6 billion sales, which is substantial. You see these are many small things, but also some other things. It's not a matter only of divesting.
It's also fixing in creative ways, certain businesses. That is exactly what we have announced a few days ago, that we are setting up a joint venture for ice cream with R&R. R&R, a partner with whom we have been working already for over 10 years, 14 years, I think. We are setting up a 50/50 joint venture there, where we're going to bring in Nestlé, our businesses of Europe as a whole, also including European frozen business. Although we exclude pizza, we bring in our ice cream business in Egypt, Philippines, Brazil, and Argentina. That's going to create, being R&R, a focused player in the ice cream business. That joint venture is going to create a leading player in the ice cream business, is really going to have all the ingredients, because we put together the competencies and the knowledge of these both companies.
Nestlé strong branding capabilities, the out of home distribution network, impulse and ice cream. R&R competitive manufacturing, very sharp on take home, et cetera. That complementarity is definitely going to be a very strong player in the ice cream business worldwide. Portfolio management is also, and I have mentioned it, is building for the future, too. It is building intrinsically in what you have for the future, but also growing and seeing what is up there as an opportunity that is in line with your strategic direction. That is exactly what Nestlé Health Science and also Nestlé Skin Health is about. It is expanding the boundaries of nutrition. It is actually marrying or bringing together, the needs of society, which is the link of nutrition and health is increasingly relevant in society, means, has value.
Also the science, that is now allowing to give the right answers there. That is what we have been doing over from 2011 with Nestlé Health Science. May I ask now, Greg, to walk us through a little bit, what have we done? What are we up to? What is the nice promise you have for us?
Good morning, everybody. Thank you, Paul. It's a pleasure to be here today and provide you an update on the progress we're making with Nestlé Health Science. Nestlé Health Science was created in 2011 based on three things. First of all, on a big idea, which is the ability to capture advances in nutrition and science and to create new markets. Second, a base business already existing with medical nutrition and a few strong consumer health brands. Third, the support from the group, from Nestlé, with its ability to create new ventures, new company, very successfully, but also this new dimension of nutrition, health, and wellness.
I joined a year ago to lead Nestlé Health Science, and I've focused on building on the foundation, first on the vision that Peter Brabeck and Paul Bulcke have established for Nestlé Health Science, but also on the foundation that Luis Cantarell has built to establish Nestlé Health Science. We're making great progress on establishing our strategy and accelerating growth. I'd like to focus today in providing two main updates. First of all, provide you more insights into the opportunity of Nestlé Health Science, of this market, as well as providing you clear, concrete example of how we accelerating growth today and driving profitability. Just to start, a brief overview. At Nestlé Health Science, we are forging a greater, more integral role of nutrition in the management of health for consumers and patients, but also for caregivers and healthcare providers. We are transformational.
We're transformational in terms of how we innovating with our current pipeline, but also how we making strategic investments in key novel therapies. For example, the investment we've made in the microbiome, or how we're transferring new technology and new science into new product opportunities. We are accelerating growth. We have great momentum today with our current portfolio, but we also capitalizing on the macro trends externally. Third, we're building a breakthrough pipeline. We have already multiple, very innovative projects in our pipeline to address unmet medical need. We believe that with that, we are the company where nutrition becomes therapy. We're extending the boundaries of nutrition, health, and wellness, and we believe that the potential of this company is CHF 10 billion. Our strategy is based on three main pillars and business area.
Consumer Care, which is driving strong brands and differentiated products, as well as for consumers who are going to pharmacies and retails. Those are our main channels, and it's mainly a self-pay market. Second, Medical Nutrition, which is mainly reimbursed in institution, hospital, nursing home, and nursing care base, and it's mainly driven by the recommendation of healthcare professionals. Third, Novel Therapeutic Nutrition, which is a business still in the making. Here, we want to develop proprietary nutrients that are addressing specific disease, specific conditions. This is a business that's mainly prescribed. Each of the business area are focusing on key categories. Healthy aging is a good example. Inborn Errors of Metabolism is another example, as well as Gastrointestinal and Brain Health. Now we also accelerating growth by capturing macro external environmental trends, such as the aging population, which is very clear for everybody.
The growth of chronic diseases, for example, Alzheimer and obesity, but also how cost pressure are actually changing the marketplace in health and care, where it's driving more self-pay, but also the need and the search from consumers to access safe, clinically proven, and sound nutritional products with solid health economic value. Some of our products in the hospital setting, for example, have shown an economic benefit, a cost saving per patient of 9%-25%, which is significant. Last but not least, Paul also mentioned a real trend change in the patient empowerment. Patients and consumers that are fueling demand for health-related products, but also an increased evidence of how science is supporting the use of nutrition in health. We have the winning mix of ingredients to be a successful company.
First of all, we benefit from the tremendous capability and the largest and most respected nutrition, health, and wellness company in the world, Nestlé. We have already a very solid global footprint. We are number one or number two in seven of our top 10 markets. We're gaining share every day. We have also very strong credibility with healthcare providers. With regulators, we're shaping the environment, for example, with the U.S. FDA and in China. Our pipeline is growing stronger and stronger with more than 40 very innovative projects, and we have more to come. We also have a unique combination of capabilities in nutrition, in fast-moving consumer goods, as well as pharma. We continue to make strategic investment in our manufacturing footprint as well as in our development innovation network in order to drive innovation, efficiency, and quality.
With that, it makes us also a partner of choice to accelerate innovation externally. That brings me to one of our key ingredients for the long-term success of Nestlé Health Science, which is our innovation engine. We first have the innovation engine from Nestlé in terms of route to market capabilities, but also with its R&D network. A very good example is the Nestlé Institute of Health Sciences, which is a unique biomedical research center based in EPFL Lausanne, where they have unique capabilities and analytics to link diseases with nutrient requirements. Our external innovation network is growing stronger and stronger. In the last 12 months, we've made key moves in order to strengthen that ecosystem. We've expanded our venture capital network with a strategic investment with Flagship Pioneering. We've invested in the most innovative company in the microbiome area, Seres Therapeutics.
We've also invested in Lipid Therapeutics, the company developing a very novel therapy in ulcerative colitis. Just last week, Stefan Catsicas and I have announced an investment of $70 million into a NPTC, a product technology center, which will be entirely focused on Nestlé Health Science and based in New Jersey. Now let me give you a closer look at each business area, starting with consumer care. It's about driving big brands, strong brands, differentiated products. We have BOOST and Meritene. We're focusing on the healthy aging category. Here, we're reaching consumer who are active every day. Actually, consumer who wants to restart fresh every day. Physical mobility, cognitive function are key benefits for them, which we are focusing on.
We have the potential to build a powerhouse in consumer care by accelerating our pipeline, by extending new categories such as healthy growing and gut health, but also by expanding our geographic footprint in key growth countries such as China, Philippines, Mexico. Two great example of boosting brands in consumer care in the healthy aging category. For example, BOOST in the U.S. intended for senior consumers who struggle to get the right amount of nutrients. BOOST, in the last four years, has gained more than eight share points, and actually one-third of that this year, and is growing 20% year to date. We have launched new presentation, new formulations to provide the same amount of nutrients in half the size or less calories. With Meritene range in Europe, we're growing at 36% year to date.
Here we're providing several new variations to address bone, muscle, joint health, as well as reducing tiredness and fatigue. Those are two great brands, two great example of how we're broadening our activities in the healthy aging category. Our second business area is medical nutrition. Here, this is our largest, most established business, and we already provide a broad range of nutrition specialty addressing specific health issues in the hospital setting, nursing home, as well as for specialty physicians. We're accelerating growth. We're outgrowing the market, we're gaining shares, I mentioned before, and we're focusing on geographies where there is a lot of growth potential, such as Asia and Middle East. In this market, we're driving for leadership. Let me just highlight a few great success stories with Vitaflo, a company providing diets for life.
People suffering from inborn error of metabolism, they require specialized diets in order to grow and survive. Vitaflo is a success story, delivering double-digit growth year after year. Another good example of success is our food allergy business and the cow milk protein allergy. Children affected by this allergy have a significant unmet need. 70% of them have skin rash, 60% of them have important digestive problems. Our product range today already improved the quality of life of these children, and we're growing 30% year to date. This is good, but we are aiming for leadership in the food allergy segment. For patients that require tube feed and enteral nutrition, we are expanding our product range with more differentiated products.
A good example is the launch of the Ella pump in Europe, where we are bringing an easy-to-use pump, which enables a continuous real-time dose tracking, nutrition dose tracking. Now this takes me to the third business area, novel therapeutic nutrition. As I mentioned, this is a business in the making. It includes Prometheus, a leader in GI diagnostic, gastrointestinal diagnostic. Here we're focusing on therapeutic areas based on unmet medical need as well as solid, clear scientific evidence. We're focusing in gastrointestinal health and brain health, and we are also expanding our proprietary technology platform that has significant impact on disease state. The microbiome, as I mentioned before, is a very good example. I'd like to provide you a little bit more of perspective how we're building our pipeline at Nestlé Health Science. Here, taking the example of the category of gastrointestinal health.
We have a range of programs ranging from nutrition, prescription, and diagnostic. Here, two example, Project Rom and LT-02. Both are addressing an unmet medical need and are focusing on inflammatory bowel disease. Patients suffering from inflammatory bowel disease today are either treated through drug treatment or surgery, and they very quickly escalated to biologics. There is evidence that a targeted nutrient solution will help these patients beyond drugs. With Project Rom, we are helping patients by providing an improvement in the inflamed mucosa to get back to normal. In project LT-02, we have a product that heals the protective layer of the mucosa. Both projects are synergistic. They have the potential to be gold standard nutritional therapy and are additive to drug treatment. Let me conclude and summarize. Nestlé Health Science is a unique company that's shaping new approaches to health management for consumer and patients.
Nestlé Health Science is playing a key role in nutrition, health, and wellness and is well positioned to succeed. We're accelerating growth, and we are accretive to Nestlé. Thank you very much. Paul, back to you.
Thank you, Greg. You see, it's fascinating what good food can do. That is what Nestlé Health Science is all about. It's already a business, because you're looking out a frontier in the future, but it is a multi-billion business today, accretive to our performance, and that is the base where you build upon. You have strong brands, and you have a fantastic pipeline building up. There's so much to be discovered still in how nutrients interact with health, and we are there. There's so much value to be created in that equation. That is what we embrace. Yet again, that's Nestlé, an AND company. Short term today, and yet also reaching out for the future and building these platforms. Actually, Nestlé Health Science has both of them.
You have a business today thriving and growing very nicely and profitably. Yet, reaching out for also building that and for the future. It is all about, I have mentioned it, and I stop here, about consistency. Consistent and sustainable profitable growth with returns. I wanted to share with you how we go proactively about portfolio. At the end of the day, it's all about portfolio, building the right platforms, building the right arguments in the existing brands, building the right signs so that we can create value differentiation versus competition, giving us the winning arguments. I think that is what helps us. We have a broad portfolio. We have a spread, geographic spread that is unique. I think that's our strength that we have today. At the same time, we go also of doing that very efficiently.
Driving waste out and bringing efficiencies in the operations. I didn't want to focus this time on this. We're going to have opportunity to do that. With that, I think we are ready for questions.
Thanks, Paul. For those of you on the call, if you want to ask a question, please press star one on your phones to join the queue. If you want to withdraw your question, please press star two, and please limit yourself to two questions. Now let's take the first question from the call. The first question is from Eileen Khoo of Morgan Stanley. Eileen, go ahead, please.
Morning, everyone. Really good to see all of you. Two questions from me, please. First of all, on China and Zone AOA, is it possible to give us more color? For example, in China, did you see a sequential improvement in your organic growth versus the previous quarter? Regarding recovery being slower than expected, is this category specific or are you losing share? For infant formula in China, can you just give us a bit more color on the dynamics you're seeing there? For example, promotional intensity, market share, e-commerce development. Just for Zone AOA, generally, what's driving negative pricing in this region? That's my first question. Secondly, on U.S. frozen, it sounds like you've had some encouraging results so far. What kind of sustainable growth rate do you see for this category longer term?
Would you be happy with stability? Does that constitute a recovery for you? Are you happy with the results to date of your joint advertising campaign with your competitors in frozen? Thanks very much.
Well, China is actually three questions, but we do see sequential improvement in China. We have mentioned that we have different categories that are really going strong, like the big businesses in Nescafé and be it in instant coffee and RTD. We see also Yinlu Xiaoyang Joint Venture getting good momentum on that. With this specific, we see infant nutrition and Nestlé Nutrition. We see Nestlé Health Science going well in China and getting traction. It is a slow increase. We were more optimist, but you see also the environment of China is playing there. Yinlu is where we have done quite a bit, but still a few products and innovation to go for.
The negative category specific, I would say that it has a general undertone of China that is a little bit in slower growth mode, that we have specifics category by category, there's many categories going very well and getting back to what we're used to. On negative pricing, the milk arguments and coffee per se, you've seen the raw material pricing there, so there's a little adjustment to keep the pricing competitive, I think. I don't know, Wan-Ling, if you want to say some more on this.
In terms of negative pricing?
No, in general, if you want on China, because you're very close to China.
Yes. Hi, Eileen. Nice to hear from you. No, let me unpack China for you. Like Paul said earlier, we have our core F&B business that actually is the fundamentals. It's very encouraging. When Paul talked about soluble coffee, we're growing at 8%. When we talk about RTD, we're actually growing at 26%. Also from an e-com standpoint, it's interesting. You look at, Paul, you talked about the F&B, where 5% of our sales now is going through e-com, growing at 70 some percent. If you look at e-com for total China, it's now 14% of our sales growing at about 50% year-over-year. A lot of encouraging signs, and Paul is right. Where we need to improve and where we continue to work on is Yinlu, the Yinlu business.
Even in the Yinlu business, we have new innovations coming in the pipeline. We should start to see the impact of that coming up in Q4 and going into next year. I am very optimistic about China and about AOA. In terms of pricing, the other question that you have in terms of pricing for AOA, Paul is right. We do have commodity price benefits that we have in order to stay competitive in the marketplace with lower pricing. We have launched a whole slew of new products in the zone. Anything from KitKat Green Tea in Malaysia to Nescafé Creamy White and Nescafé Barista Style. I mean, the list goes on, and obviously as we launch these products, we do have support in the retail trade in order to get them going. Was there any other questions in terms of that?
That was it?
That was all.
Okay.
We had USA, Wan-Ling. In USA, the frozen, we not only see motivating growth coming back, we have seen some good growth, double-digit growth in our frozen business in the last week. We're not going for stability. We're going for growth. It's a fantastic category. We have fantastic brands in there. We have the complementarity of the different offerings in that category. We have leading positions. We have the best knowledge and the best development center there to really go and link that category, our brands, with the consumer expectations. Actually, it's very strange that the frozen food was under pressure over the years because there's no better category to answer exactly what the consumer is asking for, which is clean labeling. Frozen allows that. The technology is the best technology to conserve all nutrients and to offer combined offerings that give a balanced diet.
It is for us to connect that with the consumer, for us to link this category with these arguments to the broader population. That is what we did as brands, as a company, and together with other players in that category, because we believe it has all the right arguments. That is what we are doing. We are not going for stability or say keeping over. No, we are going for growth. This category has all the arguments to grow, and it is showing. It is not one time effort. I think what we have to do there in that category is stay always sharp and connect permanently with the consumer. We lost it a little bit because the consumer have moved dramatically fast, call them millennials. I think we are now there and have the capabilities to stay really attuned with what they expect now. Next question.
Yes?
Yeah. The next question from the call is from Celine Pannuti of JPMorgan. Celine, please go ahead.
Yes, good morning. Sorry, I am going to go back to AOA because I still cannot manage to reconcile your performance in Q3. So you are down 3%. I think you mentioned Maggi being a hit. We think it is about 280 basis points, so that would make you flat ex Maggi. I understand that China is improving versus Q2, so can you help me with the moving part there to understand why AOA, even ex Maggi, was weak despite the weaker comparative? That would be my first question. My second question is on Americas. Two points here. You said Brazil was flat, which sounds like a pretty deceleration versus H1, if you could explain what is going on, and why was pricing so low in Americas? Was as well this driven by Latin America? Thank you.
In a way, I must say Maggi India has an impact. We do not overblow it, but it has a dramatic impact. We have no Maggi noodles on the shelf for the whole quarter, now for more than five, six months. So it has an impact. Then you have also the negative pricing on organic growth that weights dramatically because milk and also coffee is very strong in our portfolio, and I would think that is the main reason. We thought a faster recovery in China would compensate. It is slightly slower in there. That is why we are. Underlying, I am optimistic for the future. It is not going to be a flip-flop all of a sudden. There is a momentum that is building up, but once we are going to have that, it is going to be solid. Latin America, Brazil flat.
Well, more or less, if you see Brazil and you read that the environment is not going so well, yet at the same time, we have been very resilient in Brazil. We have very good underlying categories there. Milk is a little bit more under pressure, coffee and compression is doing well. All in all, Brazil is not Latin America. It's big. It's not Latin America. We have Mexico. We have Chile. We have Colombia. We have Peru, really going very well, close to double-digit growth. That is what gives the strength of that continent. The pricing is low because, again, there's so many milk arguments in our portfolio, coffee too in Latin America, and that plays in. Basically, to stay competitive, we have rolled out some of the softer pricing into our pricing. Basically, that's it.
The underlying growth, taking Brazil that is neutral, which is actually a good performance if you see a little bit the general macro environment of where Brazil, I think is a good result.
Celine, if I may add something regarding the pricing dimension in zone AMS. Obviously, the adjustment that we did, the one-off on Nestlé Skin Health is impacting AMS, which is the reason why you see a lower component of pricing in the third quarter. Thanks. The next question from the call is from Warren Ackerman of Société Générale. Warren, please go ahead.
Good morning, everybody. It's Warren Ackerman here, Société Générale. Two questions from me also. At the first-half stage, you were pretty clear that there would be an acceleration in the organic growth in the second half of the year. That was a clear message. Obviously, we're sharply lower in organic growth terms in Q3. I know you've called out the two reasons, Maggi noodles and Skin Health. I'm a bit confused because the Maggi India issue was also the case in Q2, given it was off the shelf for 6 months. Was it worse in Q3 versus Q2 for Maggi noodles?
The changes in your assumptions you've made in Skin Health, can you just go through what those are and what impact that had on the organic growth in Q3 or maybe some impact on sales so that we can understand why really there's been this slowdown in Q3? I can't really triangulate it all up. Second question, again, one for Wan-Ling, if she can. It's good to hear, Wan-Ling, you're positive on China. At the end of the day, this is another very weak quarter in zone AOA, and it's now five or six weak quarters in a row. I hear all the improvements on e-commerce and the India issues and everything, can you maybe just walk us through what your priorities are for the zone in the next sort of 18 months, 24 months?
Do you genuinely think that you can get the growth back to mid-single or high single digit organic growth? Maybe talk about some of the other countries around China. We're hearing from other companies that Southeast Asia has been significantly impacted by the devaluation and the slowdown in China. Your kind of general priorities in zone AOA and what you think you can do with the zone would be great. Thank you.
Okay, Warren. On the Maggi noodles, first, second quarter, third quarter, actually, the hit was fully in the third quarter because we still had products on the shelf, and we have been retaking it more or less at the middle or the end of the second quarter. That goes double in accounting because you have to bring it back in. You retake from the shelves. The full hit, the full blast on the organic growth was definitely in the third quarter, and now we're not back on the shelves yet, so it's not helping there either. That's the explanation. Unless Skinna[uncertain], have you talked on China? Growth of China, five to six quarters, well, one thing, it's only one quarter in, and her priority is to bring growth back. Maybe you want to say a few things more. What are your priorities?
They're very clear, share them.
Thanks, Paul. Clearly, my priority is to get growth back. I thought I was impatient, but my boss is even more impatient. Let me go back to the India Maggi noodles thing. In Q2, we still have sales of Maggi noodles. In going into Q3, we not only had the impact of Q3 of noodles not being on the shelf, but also taking back the whole pipeline coming back. I think it was François who said in his discussion earlier that it was actually worth six months that basically hit Q3. That's setting aside that's what's happening to Maggi noodles. Also, we had mentioned earlier that we're really pleased that the honorable Bombay High Court had ruled in our favor, and we are testing. We have actually gotten some results, and it's been clear.
We are hopeful that we can get back on the shelf sooner than later. That's India. If you think about the challenges that we've had, it's Maggi noodles in India, it's China growing, coming back, even though the fundamentals are really encouraging. We do have some construction sites, so to speak, which is an example that we've given is Yinlu. Let me walk you through the rest of the AOA. It's amazing to see the growth that we're seeing from developed markets. Japan, for instance, is growing year-to-date at 5%, which is amazing for a market that has been long perceived as static, and I'll come back to that when I talk about priorities going forward. Australia, the same thing, about 4.9% growth. For two developed markets, that's really encouraging.
Moving on to emerging markets, if you think about Sub-Saharan Africa, I think the World Bank has lowered the growth projection, yet we're seeing really good growth. If you look at the west of the continent, our business in Nigeria was really slow in Q1, but came back. Q1 was because of the impact of election, but it's come back despite the falling oil prices. We're really happy with the performance in Sub-Saharan Africa. In terms of Southeast Asia, which you mentioned, it's so exciting to see in markets like the Philippines, where our trust rating is so high, highest even in all of Nestlé World, and we have share of wallet is really high. All of our categories are really growing faster than market. Yeah, we have some challenges, but countries like Malaysia, where there are some market issues.
Overall, I'm very bullish. Going forward, obviously, I have been visiting a lot of markets the last four or five months and really encouraged to see the caliber of people, the critical mass of people that we have, the passion. I spent seven days in India, for instance, in Delhi, in one of my trips, and it was amazing to see the dedication of people, the passion of the people to grow the business. People, obviously, is leveraging on the strengths we already have, the brands, the products. The thing to also share, I'll come back to Japan. To be able to grow in markets like Japan at 5% and transform a Nescafé brand.
The innovation, not just in terms of product, but also in terms of business model, and how do we replicate those types of successes to other parts of Zone AOA is going to be key. People, leveraging people, leveraging brands, making sure that we continue to develop the e-commerce channel is going to be a lot of the things that we'll focus on. Going into the balance of the year and going into 2016, we'll be focused on a few things that's really going to move the dial. I think, was there anything else?
No. I think AOA is a growth zone for us. We're confident it will. It has to come back soon. I think also e-commerce is very important in a way, and expect it's like a silent grower that we are embracing there. That's going to come back. Just on the Maggi, the product is safe. We always stated that. It is now proven true, and it's going through the process of reproving that through accredited and accepted labos. That doesn't mean it's back on the shelf. There's so many administrative hurdles there. We don't like them, but they are there. We have to pass, and we're working very intensively from our side to have the Maggi noodles back on the shelf. It's not because they are okay and safe, and that we have them, and that's a pity, but we're working on that.
There was a question on Nestlé Skin Health.
Maybe before I move to Skin Health, for Maggi noodles, just to give you a little bit more color. Actually, in H1, we did not have sales for 40% of the time, and in the nine-month period, we didn't have sales for 60% of the time. The impact was actually stronger in the nine-month period than it was in H1. Coming back to Nestlé Skin Health, let me just recap on what it is exactly. We had low sales, which is purely related to our prescription business in the United States. As you know, we are providing discounts both to the trade and to consumer through rebate cards, and the U.S. system is structured with a co-payment between the patient and its insurance company usually.
Such discounts are reflected in our accounts on a monthly basis, we have to take a view on what the discounts are based on a certain set of assumptions. In Q3, when reviewing the issue, we decided to have a more conservative view on the level of the discount on rebate that we are providing. Once again, this does not alter in any way the fundamentals of the business. Important to understand that Nestlé Skin Health is strongly accretive in terms of sales growth to Nestlé. You are asking what is the impact. The impact is lower than it is for Nestlé noodles. We don't provide the detail of sales for each business. I cannot give you the detail, but be aware of the fact that it is lower. It is significant to the group, but it is lower than for noodles.
Okay. Thank you, everybody.
Thanks. The next question from the call is from Jon Cox at Kepler Cheuvreux. Jon, go ahead, please.
Yeah, good morning, guys. Sorry, I just want to come back into that Skin Health. If you look at the others line, it looks like you've gone from 8% to zero quarter on quarter. That would actually indicate something like 125 basis point impact from that Skin Health in the quarter. Could you maybe just talk me through where I'm doing something wrong there? You mentioned it's not as bad as the noodles. I think you've mentioned 30 basis points for noodles year to date. That would be lower than I assumed in the quarter. You could just talk us through that.
Just in terms of will we see this impact now in the upcoming quarters as the whole business is restated in the skin business, or is it, as you say, just a one-off now, that gives you the confidence, obviously, to talk about 4.5% organic sales growth for the year, which would obviously imply somewhere around 5.5% organic sales growth for Q4. Thank you.
Yes. Okay. For the Skin Health division, when you look at the category Other, it includes other items as well, because as I mentioned, we had the impact of the generic launch of Lotronex as well, which impacted our sales in Q3. Be aware as well of the fact that the comps were not really favorable in Q3. There are other factors than purely Skin Health in what you see as Others.
Things like Lotronex, it's nothing to do with our strategic purpose. It just came with an acquisition, and generic comes in, and these businesses that has a material impact. Straight away you go to minus 50%. These are things, these are excuses. Fact is, we have to have enough power to compensate for that. It is more the Skin Health correction, which is just a once up, and that's it. It's not something we're going to have over time.
Thanks.
Next question.
The next question is from James Targett at Berenberg. James, go ahead please.
Oh, good morning. Thank you. Two questions from me. Firstly, just on Maggi India quickly, just to manage our expectations. I appreciate there's a lot of bureaucracy which needs to go through in order to get the noodles back on the shelves. Just in terms of timing, are we talking by the end of Q4, or could it be a Q1, Q2 thing next year? Just give us an idea of timeframe. Secondly, just as we have Greg on the line, just on the CHF 10 billion of Swiss franc business for Nestlé Health Science. I was wondering, what are your market size expectations, assumptions, sorry, for that sales figure? What do you expect that to be at the time of the CHF 10 billion sales? What are they now? What sort of timeframe do you expect to get there? Thank you.
Let me answer that. Maggi India, when do we want it? As soon as possible. When is that? We don't know. We're working very intensively with the authorities. I've said product's safe, test is done. I think there's one test to come in still. Hope and confident it's going to be positive. Still, we have to go through quite a lot of administrative hurdles to get it back, I don't want to express I'm an optimist, I hope as soon as possible. Is it going to be this year still? I am not going to say because I have learned a lot, I'm not going to express whatever, because it's not only in our hands. We do whatever we can to have the product back on the shelves so that we can serve the Indian consumer there.
I will leave it there, with a little tone of frustration. On the market size, CHF 10 billion, I took note, Greg. I think CHF 10 billion is a number. It's just to say, this is big. This is not small. I think that is what you're up to. This is a market in the making. This is not a defined market still. There's lots of dust to settle. This is all new. If you think about it, we're speaking health, that's big. Value creation linked with health is tremendous. You just think about the pharmaceutical industry and all that. We're not going there. We just want true nutrients, bring health arguments. What is the market? What we have calculated internally is a little bit, the playing field of Greg goes between CHF 30 billion and CHF 50 billion for the time being.
That is the narrow definition for the time being. It is shifting and growing. The CHF 10 billion is actually more a mindset focus area to say, let's game for that. Don't think too small. How many years is it going to take? I hope not too many. We're going to sort that out. We have our timelines. We have our plans. We have our pipeline. We have our launch time frames, it's going to build up. The CHF 10 billion is more to give you a feeling a little bit. We're not thinking small here. We think in quite sizable dimensions.
Thanks, Paul. The next question is from Adam Spielman at Citi. Adam, go ahead, please.
Hello. Thank you for taking my question. I'd like to come back to a question that was asked previously. At the half year, you said or implied organic growth was going to accelerate, clearly it didn't. You knew when you made that statement that Maggi noodles weren't going to be available, that can't be a change in your expectations. I'm just wondering precisely if you can tell us what did change. That's one question. I've got a follow-up question as well, if I can.
First of all, we were confident, et cetera. I was confident to have the Maggi noodles back on the shelf as soon as possible. We knew they are safe, we thought that we would have them back. We don't. There's hurdles, there's complexity, that's the reality came in there.
Yeah.
We didn't like it. That component then with a specific other issue, et cetera, that's it. That's the reality. What is important to me is that the underlying businesses, even the businesses that were challenged, like frozen food, we have answered them, and they're coming back. In geographies, we have a worldwide spread, exception made of a slower recovery. It's not that there's no recovery. It's a slower recovery than expected again. Maybe, yeah, you're right. We were too optimistic, maybe, in the Maggi case of having the timeline, in maybe China. Underlying, I'm very confident and optimistic.
Okay. Thank you. That's very clear. Then the second question is about, really, I suppose the accounting again on this one-time charge in the U.S. I'm wondering particularly how that will affect your margins and profit. Is it that you are effectively reducing sales, but trading operating profit will be unaffected, which I guess means to say that the margin will go up, underlying cash flows unchanged? Will there be a profit impact as well when we're thinking about that for the full year?
The impact is top and bottom line, the business is accretive to the Nestlé. That is what matters to me. Active portfolio management is moving the proportions of that accretive dimension in your portfolio in the right direction. Skin Health, in spite of even that one-off charge, is accretive to the Nestlé model, which is what we're looking for.
Okay.
Thanks. The next question from the call is from David Hayes at Nomura. David, go ahead, please.
Thank you very much. Morning, all. Just coming back to Nestlé Health. Thanks for the presentation. It was very useful. I just wondered, picking up some of the dynamics we've seen in the quarter in terms of the rebates. We've seen, I think, mention of generic entry you mentioned earlier. I just wonder if you can talk about the risk profile of Nestlé as it changes, as that health business gets larger, whether there is more volatility to come into the Nestlé model, whether that can be managed, and how can that be managed? My second question was just on water. Obviously, a great quarter, nearly 10% growth, it looks like. Some of your peers have called out the weather dynamic and sort of adjusted for that.
I wondered if maybe you could give us some indication of how much of that was just weather comps and how much of it is underlying improvement in the water division. Thank you.
You spoke about do we have a higher risk profile as a company. I think we have a higher risk profile as a society in general, if you think where we are moving as a society, our markets, et cetera. I think we have been building, actually, to compensate for that portfolio spread, and that is actually what we're doing. In certain areas, yeah, you have higher risk, and in certain businesses, you do have risk. You have also higher upsides. For me, the most important part is how we hedge through portfolio, through geographies, through the right arguments, through differentiation. I think that is what we're doing. We have this one time. I would not extrapolate this one time as, oh, that's going to be Nestlé for the future. That is actually what we're doing, building portfolios to balance things out.
There is higher upside, and I go for the upside. On weather, yeah, we had a good summer. I think the fundamentals are deeper than that. I think the brand dimension we have with Nestlé Pure Life, it's the biggest brand, strong in argument, strong in personality, strong in footprint worldwide, and rolling out and going deeper. Then you have our international brands like S.Pellegrino and Perrier, going almost double-digit growth very profitably and rolling out further and having that stronger, more intrinsic dimension. At the end of the day, water is the best hydration. There's lots of those, people know that, and they embrace that, and they go for healthy hydration. Healthy hydration, Nestlé is working on healthy hydration through its water business, and it reflects. Then you have a sunny day, and it helps a little bit more. Yeah, we take it.
Thanks.
Okay. Thank you very much.
The next question from the call is from Alain Oberhuber at MainFirst. Please go ahead, Alain.
Good morning, everybody. Thank you very much for taking my question. I have two questions. The first is regarding Nestlé Nutrition again. When could we expect that the growth could come back in China in particular, at a similar level? Then on that issue, could you talk a little bit more about the three different channels? The other question is about milk and ice cream. Obviously, you talked about milk being weak, particularly because of Latin America. Regarding the hot summer, ice cream, I felt, could have been much stronger. Could you give us a little bit more insight about your ice cream business?
Are you speaking Nestlé Nutrition specifically in China? Is that your question, or is it in general? Are you speak about the similar growth of what? Can you be more specific? Because I
Yeah, just regarding, you gave us a couple of insights regarding China about the different channels. Could we get a little bit more which channels are performing currently well? I assume you talked about e-commerce, but talking more about the other channels, like the modern trade channel or also the baby and mother store channel.
Yeah. Well, Nestlé Nutrition in general is saying, are we going back to similar growth we had before? I think we had that accelerated growth. It was because it was really going very fast, starting to be part of the landscape in China. To get back to these growth figures on a slower base, it is much bigger base now, I think, no, it is going to be vigorous. I absolutely believe we have the arguments. You have also the price setting a little bit to more acceptable levels because the price differentiation in China was quite huge. We weren't there, but in general, the competitive landscape was quite high prices. That is resetting somewhere.
The three channels, we do see a shift from modern trade, the classical modern trade, towards baby stores, where you have more specific added value, the premium products talking more directly to the consumers looking that in the baby stores. E-commerce is definitely a channel that has, I would say, grown very fast. It is not even e-commerce per se. It is e-commerce, but bringing from the outside in. We with Wyeth are embracing that and with Nestlé increasingly. There is a channel shift definitely towards these baby stores and e-commerce in Nestlé Nutrition in China. Milk and ice cream, I don't know. You speak about pricing or ice cream is not growing, but we don't give you specific on ice cream. Ice cream has gotten, in United States, a good exploration. We had a relatively good summer in Europe too, and have been working there too.
We have disengaged from certain parts of the ice cream business in certain parts of Europe too. What matters is that we are building up a winning leader there together with Arnold Arnold. I am really enthusiastic about what we are building up here. The complementarity of capabilities of both companies, the fact that we have been working with them for 14 years, this fundamental trust relationship of going forward. The purpose that we have together and share that purpose very vigorously is really a very inviting promise, I hope we can land that as soon as possible. We are in advanced talks, I am confident, we still have to land the talks and then start rolling out what we see in 2016. What do we do here? Well, we want to have a leading, growing, profitable business here. I really think we have the ingredients to do that.
Looking forward to it.
Thanks, Paul. The next question is from Patrik Schwendimann of Zürcher Kantonalbank. Patrik, please go ahead.
Good morning, Paul. Good morning, everybody. Do you think the current consensus of an EBIT margin improvement of 10 basis points in Swiss franc is realistic, bearing in mind the current Forex environment? That's my first question. Second question, again, on the Skin Health rebate adjustment. Could you give us the impact on earnings for the full year? This would be very helpful. Thank you.
Jean-Nicolas.
No, we are not disclosing the detail for the Skin Health adjustment, as I mentioned before. Regarding the margin, you saw our guidance, which is what we had before, which mean that we expect an improvement in our operating margin for the full year against last year.
In local currencies, right. Do you also think in Swiss francs it would be realistic to have a slight improvement?
No, our commitment is improving margin in constant currency because we don't have an impact on the Swiss franc I would like to, but we don't. You see the Swiss franc again has almost a 7% negative for the year to date. It's real money.
You will help in the second half, definitely.
Sorry, can you repeat your question? We didn't hear the beginning.
But-
Patrik, yeah
You also will have the help of lower input costs in H2, as you have mentioned, lower milk prices, lower coffee prices. In terms of margins.
Yeah. You see, that's a little bit the advantage we have. It's a bag of things, positive, negatives. Also our raw material and packaging basket we have is positive, negatives. We have milk, yes. We have coffee, yes. We have coconut milk, actually, give and take, it balances things quite out. It is no such a thing that you have lower raw material prices, lower milk prices although they're coming back, they're going up again, that you're not isolated. You have to react. You have to be competitive in your pricing. All in all, what we say is we go for increased margin in constant currency, and that is what matters. It is what we're aiming for. That is what we promise.
All right. Thanks a lot.
Thanks, Patrik. The next question is from Jean-Philippe Bertschy at Vontobel. Jean-Philippe, go ahead please.
Good morning, gentlemen. I would have a question on the capital allocation. Your buyback is completed in a couple of weeks or days. You are not too active in M&A. Your CapEx is quite low with regard to your volume growth as well. I don't think you need some extra capacity. You're generating more than CHF 10 billion free cash flow probably in the coming years. You had some divestments as well in the past months or years. If you can share with us your plan for next year, you have as well your 150th anniversary, what you're planning as cash to shareholders. The second would be on.
Tom, except another 50 years and these [inaudible].
Yes. The second one would be, if I may, on M&A, what is your plan in Nestlé Skin Health? You invested, I think something like CHF 50 million in Brazil. If you can share with us as well, maybe your priorities in different regions of the world.
Do you want to talk about our problem we have with cash?
No, we don't have any problem with cash. I think that the share buyback, we are just completing the share buyback program as you know. We have not communicated anything for next year. That being said, you know that our priority is clearly to support the need of the business, invest in renovation, in innovation, invest in CapEx as well. We have a clear dividend policy, which is well established and which we maintain, which is to increase or maintain the dividend in absolute value in Swiss franc. We have not communicated further than the current share buyback program for the time being.
On Nestlé Skin Health, I promise we're going to dedicate some time in the future about the Nestlé Skin Health, just as we have done with Nestlé Health Science too, so that you get more insight there. It's clear Nestlé Skin Health, maybe I've mentioned that there's a creative in growth. This is a growth platform. It has to be a profitable growth platform. Growth equals investments also in the future. We have done some acquisitions, basically when it was still Galderma, quite important acquisitions to bring in capabilities and platforms, and that is what we are doing. We're going to be wise there because, this is a new field, although we have very experienced people who know the category very well. We want to embrace the health, nutrition, health, and wellness equation there. It's about skin health, and that is what we are investing in.
Investments in Brazil has to do with capacities, building up capacities, and bringing also efficiency in our operations. That's basically what we're doing. Promise we're going to get back to this in more detail in the future.
If I may, with regard to M&A.
Thanks, Jean-Philippe. We now have a question from the room. Over there, please.
Ralph Atkins here from the Financial Times. I have a question about your sales targets and expectations. You've lowered your forecasts for expected sales growth again this year. Do you not think that with economists expecting slower growth globally, talk about secular stagnation, that you need to be perhaps less ambitious with your goals and forecasts in the years ahead?
Look, yes and no. I mean, there is a slower growth environment projected, and yet at the same time, I think our company should be ambitious and engineer and build in the drivers to go for growth. We want to outperform, and actually, yes, we adjusted actually to a reality that we had. Now this year, our expectation, which is an expression of reality. The fact is that this is outperforming the market big time, and strongly, and that is what matters. It's a relative game too. It is outperforming the global GDPs. I'm the first to say we don't sell GDP. You see what is projected worldwide growth for the next year. The IFEMA has projected again, 103%. Well, we're going to see. I feel we have to have an engine and build the engine to have good growth. We are adjusted to reality a little bit, yeah.
The ambition is there.
Thanks. We have another question from the call. Gerry Gallagher of Deutsche Bank. Go ahead please, Gerry.
Morning, everybody. Thanks for taking the call. I just had two questions.
Sorry, can't hear you.
No, we don't hear.
Can't hear.
Hello?
Hello. Can you hear me?
Yes.
Hi. Good morning. Apologies for that. A couple of questions from me, please. Firstly, just on the U.S. frozen business and the recovery there, are there any comments we need to be aware of in terms of pipe filling there that maybe inflated the performance through to the end of the nine months we should consider? Secondly, if I look at the business on a product basis, and I appreciate that there's a regional dynamic here as well, but the confectionery business stands out in terms of the price you've been able to achieve there relative to the other categories. Could you comment about that a little bit, please, and how sustainable you see that? Thank you.
On confectionery, I'm going to give you Laurent. Laurent was responsible for Zone Americas to give some more light and color to our frozen business. On confectionery, first of all, we have a little bit of a bias of confectionery in slightly higher inflation countries like Russia and all that. That's why you see that pricing dimension in there. That's no more than that. On frozen, Laurent, can you give us some more light on the pipeline, the ideas you have?
Thank you, Paul. This is way beyond the pipeline. Of course, there is a selling impact at the start. We are now five months into the relaunch. We see market shares, and market shares is sellout. We see market shares improving. We see the growth, and that's also sellout of the category growing. Actually, the biggest concern today, and that is to show the impact and the magnitude of the relaunch, is not so much the demand, but to supply the demand. We moved in a matter of weeks from having a demand issue to having supply issues. The demand is coming extremely strong. The market shares are improving steadily, and we are confident with the pipeline of initiatives and the investment that are lined up that we can keep the momentum going forward.
Thank you.
That's a good problem to have. Capacity, it's a pity, though. Anyhow, it's proving it's solid. We have another question from the room over here.
I remember just a year ago, you said it's dangerous to change the targets, the aim. Now you do it exactly. You expect 4.5%. You changed the Nestlé model and the strategy, or what does it mean?
No, we don't change the Nestlé model. The model is growth, and there is numbers, you can have them. Actually you're right. It's dangerous to lower your target, I do dangerous things. I'm convinced also, if you lower, an organization reacts to that. I always want to, but I have to have a sense of reality, too. We have some manuals. You cannot overpour that. These are the things, adjusting to. For me, still, the pride of objectives, of ambition is there to outperform the market. Even the 4.5% is part of the Nestlé model in the sense that the Nestlé model is a line we want to walk over time. I've said that over and over again, that this saying, "You failed." I don't feel. 4.5% is also part of a line you walk.
In a situation like slow growth, the environment, we got some questions in that direction, how do you, et cetera, I think this is quite commendable to maintain. I want the whole organization to focus on that, to aim at that. Guess what? We have done that over time. We're just in another reality temporarily. We have another question from the call from Karthik Swaminathan of Bank of America. Karthik, you have the floor.
Hi, everyone. Thank you for taking my questions. Just two small ones, if I may. Number 1 was on the potential changes to your European and other parts of your global ice cream business. I wanted to come back to that point and ask why now? Secondly, why specifically have you entered into negotiations with PAI as a partner? Specifically, what do they bring to the equation that Nestlé is not capable of by itself? On the second question, I think there's been quite a lot of discussion on the top line, but in terms of reacting to the slower than expected recovery, should we assume that Nestlé will put more investment behind advertising and promotion to recoup that position? Or is this still within the bandwidth of your business plans? Thank you.
On ice cream, Europe, why now? Well, because we feel the conditions are there to do it. To tango, we have to be two. We have been working with R&R for quite a few years, 14 years, I think it is. The environment, the mindsets, the possibility to engage, their openness to do that, the trust, all the elements are there to converge towards a joint venture. We are in the process of that. We are in advanced discussion. Why R&R? Exactly for the same reason. First of all, there is a trust relationship. There is a sharing of common purpose. There is 14 years of working together and knowing each other. There's the complementarity of capabilities. We have strong brands. We are very good in impulse. We are very good in out-of-home. They are very good in traditional retail.
They have strong capabilities in profile, production, and operations, et cetera. Bringing that together is going to be creating a very strong leader in that category. We're looking forward to it. That's why the stars are aligned, and it goes, because these things are based on trust. There's two dimensions, trust and common purpose, and that's what we have now on the table. We're embracing it. More advertising. We have been increasing our support behind our brands in the last years, and I project to see that going forward. Why? Because think about it, the more you have science, nutritional arguments, the more you focus on strong brands and you do rollouts, that comes with communication, comes with connecting with. That is what we are doing. e-commerce is linked to that too, the embracing the new digital media. We are embracing that and investing in there.
I do see intrinsic to our Nestlé strategy, it's intrinsic to our strategy that we're going to connect, communicate, engage, dialogue much more with consumers than even before. That's why we have to free up the resources. When I say the resource allocation, it's all about that. It's not only investment, financially, it's also PFME, as we call it, brand support. It is linked with R&D time. It is how do we use our talent? Talent is limited. Where do we put them behind? That is linked with this fundamental priority focus areas, as we say, resource allocation. PFME is definitely one very important one, and it's going up.
Thanks, Paul. We have another question over here from
John Revill, The Wall Street Journal. Mr. Bulcke, this is my normal question. You say, obviously, with the organic growth, the path you like to take over a long period of time, but with this year, that'll be the sort of third year in a row that you don't make it. I was wondering, is there any kind of considerations for having maybe a new model to reflect the sort of tougher economic situations out there? Because also you're a global company, you're constantly going to be facing problems in some part of the world, obviously, the Maggi this time around. There's always going to be some constant thing on top of that. I wondered, is it time to look at a new model or what's going on there?
My second point is, this partnership you're working on now with R&R, is that the model you're going to be looking towards now with your kind of your portfolio pruning? Are you going to be looking more towards joint ventures and that kind of thing, as opposed to divestments? I know you said that that's also you want to improve your businesses, ultimately, there could be some divestments. If the divestment route is followed, will that be down this joint venture route, preferably?
You're always taking my ambition against me. Look, what we have is the model is over time. I cannot stress that enough. I do believe we have to organize ourselves. Then you have doctors in general. You have an environment. You have, et cetera. I'm the last to lower my ambitions. I feel we owe it to ourselves as an organization. Actually, we externalizing internal ambitions. Well, you can take that against me, but I'm not going to back off in the longer term, you see. I have to have a sense of realism, and that's what we have expressed now, because of specifics. Models, partnerships, is this a new model? You see, you move straight away from, yeah, selling off all new models. No, we embrace different, and I have been sharing that a few moments ago. Portfolio buildup.
How do you strengthen portfolio? It is first of all embracing what you have and give arguments and connect with the right differentiation, creating value inside what you have. That is building strength in your portfolio. What you have, and it's really promising, invest even more or protect what you have. It is you have certain areas that don't fit, and you have certain criteria, strategic fit. Is it going to have returns? What is the resource intensity? What is the profitability and profit growth we projected there? Well, if it doesn't fit strategically when it doesn't fit strategically, I would be inclined to alienate over time because we should have products and we should have categories, we should have brands that add to our strategic direction of nutritional health and wellness.
It does not have a promise of being enjoyable in the future, means financial returns. Yeah, you separate. If you see something that you have, something that is precious, brands, capabilities in out of home like an ice cream, and you see that you can combine that with another, then I go for joint venture. It is not new. We have joint ventures. We had beverage partners worldwide on beverage. We have a joint venture with General Mills on breakfast cereals for many, many years, over 25 years. I think that is a strength of Nestlé, to be able to not have one size fits all, and we have expressed in our businesses. We have different business models. We have locally managed businesses. We have regionally managed businesses. We have globally managed businesses. We have startup-like businesses, Nespresso.
We have now two platforms that we are building up in another business modeling. I think that is a strength of our company, that we can embrace different ways of answering opportunities in a meaningful way. I am really looking forward to that joint venture because speaking about common purpose, I mentioned it before. It is to have this be complementary and have the same purposes and trusting each other is a good combination, and that is what we have.
Hit that 5%-6% again in the future?
It is a line we have walked, actually, over time, we have walked over 6%.
Okay.
Nobody says you shouldn't. We are way between that over time.
Okay, we will have another question from the call this time. Mitch Collett of Goldman Sachs. Mitch, you have the floor.
Great. Thank you.
Very gone actually.
Sorry, can you hear me?
It's a terrible line, I'm afraid.
Is that better?
Nope.
Is that better?
A short question.
Hello?
Short question.
Okay. Given that you can't give us an exact number on the impact of Nestlé Skin Health, can you perhaps give us the growth rates for Nestlé Professional, Nespresso, Nestlé Health Science, and Nestlé Skin Health? If you can't do that, can you perhaps just let us know whether each of those businesses accelerated or decelerated in this quarter versus last quarter? Secondly, given that the growth model is slightly slower now, I would just like to ask François-Xavier if he thinks that there might be an opportunity to more aggressively target costs. I know previously you've said you don't think so. I wondered if that perspective had changed. Thank you.
You are asking if we could disclose the detail of the other categories. We do not disclose it. The only thing I can tell you is what I shared already, is the fact that we saw an acceleration in the growth in Nestlé Professional. We saw a slight acceleration as well for Nespresso, and we had good performance for the nine months for Nestlé Health Science. You know what the issue was for Nestlé Skin Health. We don't provide the breakdown by category. With the rest of the question, we could not hear what the question was. Sorry about that.
Okay. Let's take another question from the floor over here, please. Sergio Aiolfi.
Sergio Aiolfi from Neue Zürcher Zeitung. Sorry to nag you again about this Nestlé model. Is the range 5% to 6%, which was something that I think Nestlé has proclaimed, and it's not something that the media or the analysts have demanded. Is that range 5% to 6% still valid now?
No, we have said that for the year, we're going to do 4.5%. I would say the Nestlé model is valid. Growth over time, I do believe we should have an ambition of 5% to 6%.
Okay, we have another question from the call. Alex Smith from Investec. Go ahead, Alex, please.
Hi, good morning. I had a follow-up on Adam's question in terms of what has changed with regards to your expectations since H1. You mentioned Maggi, and you mentioned China. I was just wondering the price deflation or the competitive pressures that you're seeing in milk and coffee, does that come into play in terms of your changing expectations? I guess it's just that Q3 pricing at the group level was much softer than what we saw in H1. Similarly, are there any other categories that you're seeing price deflation? Because again, that Q3 pricing seemed a lot softer versus H1 across the majority of your zones and your categories. Thanks.
Well, it's a combination again, I have to say. It's clear that the softer pricing is a result of many things we have mentioned already, the specific correction that we had. It is also a reflection of milk prices going down and reflected in our pricing to stay competitive in coffee in certain regions, too. Yet again, it is compensated then with some inflationary environments in certain other countries. Again, this is a mixed bag. Fact is that in general, for the quarter, we saw softer pricing because of all these events. Part of these events are not going to be repeated in the fourth quarter.
Okay. A question from the room over here, please.
Katsuhiko Hara from Nikkei. Hello. When Maggi returns to the stores in India, will you ask the authorities for the compensation for the loss you took in or out of the court?
Oh. You want me to be combative. My focus goes in getting the product back. There we have to engage. We're working with the authorities to get them back. Actually, we got just news that we had three labs to test, and the third lab came in safe too, again, 100%. The product is just confirmed, as we always said, the product was safe, and it's a pity to see that we had to do and go through this, but that's how it is. We are engaging with the authorities, and we want to do that in a good mood.
You will have to.
You really want to see combative attitudes, and I'm not going to answer that. I don't think we win by combating with whom we have to work together.
We have time for last question from the floor over there, please.
Ueli Hoch, AWP. A question on Cailler. How much time do you think you need to get really successful with this brand outside Switzerland?
Depends how you define success. Cailler is a brand in Switzerland. We know that. What we are doing here is positioning it with a specific offering on the international platform, although narrow, and through a specific, which is e-commerce and some airports. There I am very ambitious over time, but I think we have to be humble. This is a market that is established. We don't want to go frontal. We think we have an angle. The arguments are the origin, the Swissness of the thing, the flavor, the quality. I want to go gentle and firm and deep rather than broad and loud of noise. I think I'm confident, though, that it's going to gain traction over time. My people they know that I have a special emotional relationship with this brand.
It is the most traditional, iconic brand in chocolates in the world. We left it there. We're going to start to make a change. It'll take some time. Somewhere we have a good relationship with time. We are very nervous and short term. We want to, and at the same time, we can pace certain things out.
We have time for a final question from the conference call. It's Adam Spielman again of Citi. Adam.
Hello, thank you. We've had a lot of questions about sort of what's gone wrong, I guess, but I'd like to focus on what's gone well. Can you tell me if Dolce Gusto is accelerating, or is it just continuing its growth? That's one question. Secondly, Pet seems to be doing well in a lot of markets, and I was just wondering if you can put your finger on why it appears to me to be accelerating. What's really driving that? Thank you.
Pet. Okay, sorry. Didn't hear that. Dolce Gusto accelerating. Well, actually, it is maintaining pace on a bigger and bigger base. We started almost 10 years ago in Europe, and it is still going strong in Europe, growing double digit in Europe. It is a fantastic story. A little bit overshadowed sometimes with another brand, but it is something that we're rolling out. We are in 70-plus countries now and growing very strong on a much bigger base. It's over a billion and growing more than double digits. Accelerating, well, actually, yes, the value it adds to the company and the importance of being accretive to the company, it is accelerating. Pet is doing well. Pet is doing well because it is one of these categories that has embraced the nutrition of our wellness agenda very deeply.
The relationship of pet owners to their pets is that argument, nutrition and wellness. There are different arguments, but the science we have, the products we have, the brands we have, in spite of some brand issues, not issues, but challenges in certain areas, but that is so strong, the profile that we have, the innovation and the renovation that we have. On that premise of nutrition and wellness is very strong. Good alignment in the organization, working well. Europe, double-digit growth, very strong. AOA, good potential to be built up. Latin America, growing strong, gaining market share, and having now new capacity to answer our success. North America, continuous, consistent growth. We had there a specific unfounded accusations about the brand and all that, but that is what brand and leadership is all about. You have to live with that.
We have to answer that, and I think we do. Why is Pet going strong? It is because it is embracing as a mono category with strong brands, the nutrition and wellness agenda, just as we are doing with the rest of our portfolio. It is actually the best proof that when you go about good arguments and you build them into your brands, you connect, you create value. All the products that we have in our portfolio, that as a side comment that do have an answer very well to nutrition and wellness framework that we have set up are actually having higher growth, organic growth than the rest. Nutrition, health, and wellness translate into a product is a growth driver. That was actually the undertone of my presentation today. That is what defines our portfolio.
That is what defines our underlying strength of our presence in these categories. That is proactive portfolio management. With that, I think we coming to an end. Thank you very much for the attention. Also, all of you following us through the webcast and, well, looking forward to a fourth quarter. Thank you very much.
Thank you, Paul. As usual, we are happy to take any follow-up questions via email or Twitter. I'm sure you know the addresses. Thank you very much.