Good morning, ladies and gentlemen. Welcome to our nine months press conference here in Vevey. The 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. Let's start. Paul, you have the floor.
Thank you, Robin. Also from my side, good morning and welcome to our nine months sales conference. I thank you all, the people present in the room here, also the people following us over phone and webcast for the interest in our company. I'm sharing the podium here with Wan Ling Martello, our CFO. We have all the members of the Executive Board here in the front line, and some with renewed or new responsibilities. We're going to go back to that later. We have for the first time also here, Heiko Schipper. Heiko, who has assumed as Deputy Executive Vice President for Nestlé Nutrition and is member of the Executive Board. We have also for the first time Greg Behar.
Greg, who has assumed as CEO at Nestlé Health Science, and Humberto Antunes, who has been linked with the company for quite a while, 50% or 100% responsible, Nestlé Skin Health. Welcome to you too. You will all join us later for the question and answer session. You have seen the results, our sales results for the nine months, the year to date, September, Wan Ling is going to get more in details with you on this. I would say these are good and solid broad-based figures. Growth of 4.5%, organic growth of 4.5%. That in an environment that if I would be asked to say there is no tailwinds. A lot of volatility. We hear, read, so I don't have to get in details there.
I want to center this press conference in that sense, in the sense of how do we as a company deliver today, every day? Delivering results in short term, yet at the same time, not being pressured by the pressures of the outside, of the externalities of the environment, of the volatility, and keeping also the line on the strategic direction. Keep the long-term view in spite of the short-term pressures. Before that, I want to give now the floor to you, Wan Ling, to get us and walk us through the nine-month sales results. Please.
Thank you, Paul. Good morning to everyone with us here in Vevey, and good morning and good afternoon to those of you tuning in to the webcast. I will take the safe harbor statement as read. As Paul has already mentioned, the nine-month sales were CHF 66.2 billion. Currency continues to be a factor. The strong Swiss franc had a very meaningful impact on our sales. FX year-to-date was -7.5%, albeit slightly lower than the -8.8% we saw at the half-year. As I said at the half-year, we are operating in a tough and volatile environment. An environment in which we have delivered a well-balanced organic growth of 4.5% with 2.3% real internal growth. Where necessary, we have taken pricing. As you all know, the currency moves we have seen this year have been extreme, and we have also seen some input cost inflation.
The necessary pricing actions have therefore had an impact on real internal growth. You have got the continued deflationary pressures and weak consumer sentiment in developed markets. We have also seen a continued slowdown in some emerging markets. Take all this together and you have a very challenging environment. As Paul said, an environment that is lacking in tailwinds. Having said all that, the actions we have taken and the fact that we continue to do the right things will sustain our long-term growth path. Despite the tough environment and in view of our year-to-date results, we are still aiming for organic growth of around 5% for 2014, with improvements in margins underlying EPS in constant currencies and capital efficiency. First, let's take a look at what contributed to our growth from a regional perspective. Organic growth in Americas was 5.1%. In Europe, we had 1.4%, the same as half-year.
In Asia, Oceania, and Africa, we had a slightly slower growth of 6.5%. Real internal growth was 1.9% in the Americas, 2% in Europe, and 3.1% in AOA. Each region has its own opportunities and challenges that we will look at in more detail when I discuss our zones and globally managed businesses. Before I start with the zones, here we have our usual split by emerging and developed markets. We have seen a continuation of the emerging markets growth at 9.5%, and our developed markets still positive at 0.5%. At the risk of repeating myself, especially since we discussed this just a couple of months ago at the half-year presentation, you know that the consumer sentiment around the world is weak, and in many cases deteriorating. In the developed markets, the trading environment is difficult. Many countries continue to be affected by deflationary pressures.
When you look at our growth of 0.5% in developed markets, it really is a good result given the context. However, it is our intention to continue to improve and make sure that our business evolves to accommodate the consumer's needs of tomorrow. You only need to look at the great growth rates of our innovations to see that we have the formula to grow even in the most challenging of circumstances. Looking at the emerging markets, the 9.5% organic growth at the nine months shows a similar performance to the half-year where we delivered 9.7%. Many emerging markets continue to perform well, particularly in South Asia, Southeast Asia, and Central West Africa. We have seen a subdued consumption in some of our larger markets. As we said at the half-year, China remains soft in some categories.
I know Paul is going to talk in more detail about how our company is evolving to meet the challenges of tomorrow. While we're also adjusting quickly to make sure we can deliver today. It is this balance that we strive for in every market, delivering today, while at the same time maintaining the longer-term perspective. The fact that we're still growing in emerging and developed markets is testament to the successful execution of our strategy. On that note, let's now take a look at our business in more detail, starting with the zones and Zone Europe. Zone Europe had an organic growth of 1% with real internal growth of 2%, showing an improvement in pricing as we've gone through the year. Western Europe was a mixed picture in terms of growth.
The consistent factors each market shared were great growth from Nescafé Dolce Gusto and frozen pizza compensating for a generally tough season for ice cream. France and Iberia have performed well year-to-date, especially in chilled for France and ambient culinary for Iberia. Benelux and Austria are another two areas where we've seen good growth. In Germany, we had slow sales in ice cream, chilled culinary, and to a lesser extent, our largest category, ambient culinary with Maggi. This was partially offset by growth in frozen pizza. The Great Britain region continued to see declines in the confectionery category, and Italy had a very poor ice cream season. The growth in Eastern Europe was again driven by Russia, with a strong performance in most categories there, most notably in confectionery and coffee, where Nescafé Gold and Nescafé Dolce Gusto are both performing well.
Hungary also had a good performance in coffee and ambient culinary, in particular the soups and seasonings. Ukraine maintained a resilient performance despite the geopolitical situation. Other parts of Eastern Europe, including Poland, the Czech, Slovak region, are seeing some signs of improvement, overall the growth is still slow. I've already mentioned Nescafé Dolce Gusto more than once, pet care is another category worth calling out as a highlight across the zone. The innovations we've rolled out, especially with Felix, ONE, Gourmet, and Snacks, continue to drive the growth in this very dynamic category. Now looking at Zone Americas. The zone had organic growth of 4.8% versus 4.9% at the half year and had 1.1% real internal growth. The different growth dynamics of North and Latin America remained. Overall, the positive growth came mainly from performances in pet care, ambient dairy, and creamers.
Pricing mainly in Latin America reflected the general economic environment and had an impact on real internal growth as expected. The North American business benefited from innovations across several categories. To give you a sense of our range of innovations, they included crispy thin crust frozen pizzas, super premium gelato ice cream, Outshine bars at 35-40 calories only, my personal favorite, the continued rollout of new flavors for Coffee-mate, and the launch of Beyond in the natural segment for pet care. I also have to add that unfortunately, the trends we've seen in frozen food segment remain unchanged and continue to overshadow good performances elsewhere in North America. In Latin America, the overall trading environment was subdued. Brazil had good growth in the largest category, which is ambient dairy, particularly in growing up milks.
We had double-digit growth with KitKat in a highly competitive confectionery category. Nescafé had solid growth, and coffee, in particular Nescafé Dolce Gusto, also performed well. As we said at the half year, Mexico was affected by the changes in fiscal legislation. In addition, ice cream did suffer due to the poor weather there this summer. On the positive side, across the region, pet care continued to perform exceptionally well, and Dog Chow and Pro Plan led the growth. Moving on to Zone Asia, Oceania, and Africa. We had 3.5% organic growth and 0.7% real internal growth. Obviously, a slowdown from where we were at half year. If you look at where we have our main challenges, they are in China and Oceania.
It is important to emphasize, though, that while the softening we have seen in China in several categories is not showing signs of real improvement yet, we remain very confident on the long-term prospects for the businesses there. In fact, if you look at the food and beverage sector as a whole in China, it has been slowing, and we obviously do not operate in isolation. Oceania's challenges are very different, and they are in the form of very difficult trading environment. Overall, though, with the exception of China and Oceania, we can see the growth across all markets was in the mid to high single digits. This was even despite the political unrest in several countries that obviously had an impact. Real internal growth was also affected by increased pricing taken to compensate for currency movements that we have seen, as well as some input costs of some commodities.
For emerging markets, Philippines, Turkey, Pakistan, many markets in Central and West Africa, we saw strong performances. Ambient culinary grew well in the majority of the markets, the Maggi brand being the category champion in many places around the world. It's something that's doing well, that continues to do very well. In cocoa and malt beverages, I'm happy to report that MILO has had another good period of growth. It was one of my favorite brands growing up. Another large category for the zone, which is coffee, also delivered solid growth. For confectionery, the Middle East and Africa grew well, helping to compensate for the slower businesses in China as well as in Oceania. Looking at the zone's developed markets, Japan continued to deliver positive growth, thanks to really innovative new business models such as our ambassador program for the Nescafé Barista machine. We now have over 100,000 ambassadors.
Over 100,000. I'm also happy to report that KitKat in Japan continued its growth momentum despite very tough comps in the last year. For Oceania, I have already mentioned the tough trading conditions, but I'd like to add that we continue to bring value-added innovations to the market. In fact, for the zone as a whole, the premium businesses and innovations were again the highlights. Nescafé Dolce Gusto continues to be rolled out across the zone and delivered double-digit growth. Other new launches like Yinlu Walnut Milk in China, new portion packs of MILO, and low-fat Carnation cooking cream in Australia, and Felix cat food all performed well. Moving on to Nestlé Waters. With 5.1% organic growth and 5.8% real internal growth, Nestlé Waters developed in emerging markets, again, delivered a solid performance.
The good growth in U.S. retail came from our regional spring waters such as Ozarka and Deer Park, and of course, our international sparkling brands such as Perrier and S.Pellegrino, even though the U.S. remains very competitive and price sensitive. Here in Europe, I think we all have felt the impact of the cooler summer weather, so it's remarkable that our waters business in Europe continued to show resilient growth year to date. The U.K., France, and Belgium were the highlights. Pricing is also a challenge in Europe as it is in the U.S., our portfolio of strong local brands, premium international brands, and Nestlé Pure Life is delivering solid real internal growth. Our emerging markets delivered double-digit growth with strong performances in Egypt and Turkey and Nestlé Pure Life. Nestlé Nutrition. Nestlé Nutrition had an organic growth of 7.8%, 3.4% of which was RIG.
Infant formula and infant cereals both delivered double-digit growth. Emerging markets sustained their double-digit performance, even though there were impacts on our supply chain in the Middle East from the political unrest in the region. The developed markets saw some softness in the meals and drinks category. For those of you who missed our last two calls, one of the contributing factors to a slower RIG in our U.S. business is that we have refocused attention to value generation. This is reflected in tough comparisons for our real internal growth. From a brand perspective, the Gerber pouches for meals and drinks continued to do well, and Cerelac in many markets drove the growth for infant cereal, especially in South Asia and Africa. For infant formula, the innovations behind NAN, along with our premium and super premium brands, which S-26 and Illuma continue to differentiate us from competition.
Moving on now to our other businesses. They delivered 6.6% organic growth with 4.9% real internal growth. Starting with Nestlé Professional. Nestlé Professional's emerging markets continued to compensate for the low growth environments in Western Europe and North America. The beverage solution business delivered good performances with Nescafé Alegria, and the dessert solutions drove growth for the food business. Nespresso. Nespresso continued to grow in the markets where it's well-established, in addition to the growth from geographic expansion with new boutiques opening around the world. I'm happy to report that both the Inissia machine and the VertuoLine launches are on track, and so far have been very well-received by consumers. We've also continued to enhance the range of Grand Cru coffees with new limited editions such as Cubania. Nestlé Health Science grew in all regions. This global growth came despite the pressure on public sector healthcare budgets around the world.
From a product and brand perspective, the key drivers included Peptamen, Impact, and BOOST. And just a quick comment on Nestlé Skin Health. The numbers are now included as of July 1st. Galderma had a good performance, very much in line with our expectations. In summary, 4.5% organic growth in today's environment is solid growth. 9.5% in growth in emerging markets is solid growth. Even being able to achieve 0.5% in developed markets, despite all the headwinds, is a credit to our people. We have achieved this growth by doing the right things for the long term, taking pricing where we need to take pricing, continuing to invest behind our brands, and staying the course of our strategy to increase our category focus.
At the same time, we're reshaping ourselves to ensure that we have the right dynamics and the internal organization in place to continue to deliver over the long term. With all that in mind, with the figures we have presented today, we aim to end 2014 with organic growth around 5%, improvements in margins, underlying earnings per share in constant currencies and capital efficiency. With that, I will hand it back over to Paul.
Thank you, Wan Ling. Well, I don't have to repeat it. No tailwinds out there. Growth is not picking up in the developed markets, and some of the engines are actually starting to sputter there a little bit, too. In the emerging markets, we see some softening. We have political turmoil, unrest, conflicts. We have Ebola, too, so many reasons. Actually, in these situations, the biggest challenge a company has is how do we cope with that short term and keep the eyes on the long-term perspective, the strategic direction of a company? That's something I want to dedicate some time with you. Our strategic direction as a company is well-known. We have been able to share that with you in several occasions.
Nestlé is all about we want to be the preeminent nutrition, health, and wellness company, and that translates in looking for enhancing people's quality of life and to do that through that agenda of nutrition, health, and wellness, and drive that with science-based innovation. That is what we want to be. That is actually what we do with our food and beverage business. That is what we are. That is what we have been doing for almost 150 years now. It is driving or enhancing lives by offering tastier and healthier food and beverage choices for all stages of life, for every moment of the day, and allowing so the consumer to care for himself and the family. That is what Good Food, Good Life stands for. A few phrases only, a lot of work.
We have many portfolios, we have many products, and actually that is where our whole agenda of 60/40+ is being driven through. That is bringing taste and pleasure through food and beverages and do that in a responsible way, bringing in nutritional benefits in these products. A lot of R&D, a lot of investment going into that. The last five years we have, for example, reformulated over 30 or almost 35,000 products in the direction of more nutrition, more nutritional arguments, and better taste. microfortification is linked to that. Our communication and transparency on labels, GDA, is linked to that. Our policies of reduction of salt, fat, saturated fat, and sugar is linked to that. Many, many actions are linked with driving that agenda. That is what we are known for. That is Good Food, Good Life. Can we go back one?
No, that's okay. Four years ago, we announced and started, created Nestlé Health Science, at the same time also Nestlé Institute of Health Sciences. That was actually playing into two dimensions. First, in society we saw, there are trends and needs in society that are shaping and framing in such a way that it creates an opportunity for us. Just think about health and how health is treated and how healthcare systems are costing to society increasingly more. Also aging population, demographic trends are playing into that. Another trend was that science and scientific platforms inside are converging in such a way that they allow answers to many of the challenges society is facing, where we can play into. That is the opportunity we want to play into.
With science-based nutritional solutions that will transform health and the healthcare continuum, and the way consumers, also patient and professionals are using nutrition in managing health. That is what Nestlé Health Science stands for. In the last four years, we have made good progress. In a few years' time, we have, first of all, built upon the existing medical nutrition that we have. We have set up Nestlé Health Science, built in and brought in the people, the talent. We have been defining our strategic direction and the different platforms that we want to focus on to develop gastrointestinal, aging, metabolic and others. We have built Nestlé Institute of Health Sciences, where we want to bring in the R&D, the knowledge, the links with the knowledge in the world, the nutritional science that will be the base of development later on.
Actually, in the same time, we have been driving the business we had with quite a lot of innovation. In other words, we have been building our capabilities, and that is what Luis Cantarell has been helping to set up there. This year, we have another announcement and another important building stone for the future for us. This year we are by bringing in Galderma that we had in a joint venture with L'Oréal 100% into Nestlé. We had the base of creation of Nestlé Skin Health and further extending actually the boundaries of our agenda on nutrition, health, and wellness. Skin is being the biggest and the most obvious barometer of the health, the perceived and real health of people.
With Nestlé Skin Health, we are going from merely treating the skin to truly caring for health of the skin with scientifically proven products and solutions over the course of people's lives. That is pretty much also what our base strategy of Nestlé is. We can build upon a fantastic portfolio of products and brands, prescription self-medication in the dermatology with Galderma. Galderma, that is a business that is leading in its field, which has six manufacturing facilities in the world, has five R&D centers that is driving their innovation pipeline and also their differentiation from competition. There's 5,000 employees, passionate and employees in 80 countries, and 34 affiliates. It is something that has presence, has leadership in their category, in their field. Again, it's a profitable growth platform.
If you just see today the market is approximately $135 billion out of a global market of skin care of $250 billion, $260 billion. It's a promising market that is growing also. The fundamentals of growth are there. Population growth, but also aging is linked to that. The skin is indeed the largest organ that has to be cared for of the human body. It represents for Nestlé, this interesting intersection between food genetics and the environment. That's why we have this keen interest. With Nestlé Skin Health, we have a concrete, factual leading position with a complete range of innovative products to maintain, nourish, treat, enhance, and restore health of skin. We have been quite very active in the few months. We have it already with launches like Mirvaso or the expansion of Daylong.
We have acquired also the full rights in the meantime of Restylane, Perlane, Emervel, and Dysport in USA and Canada. We have been building also additional partnerships with third parties and others for R&D. Indeed when we put together our food and beverage business, which is what we are known for and what we do there, and bring in nutritional elements, by setting up Nestlé Health Science, by now having Nestlé Skin Health, that is really our strategic direction that we're building up. Building the capabilities, building also the possibilities to be effective and winning there. That is what's at the center of our roadmap, the famous roadmap that I shared with you over the last years. That is actually shaping what we want to be as a company.
It is also defining what we're going to leverage, the competitive advantages, where we want to grow. You see it, Nutrition, Health and Wellness was the growth pillar that is actually has a tremendous value promise for the future and growth promise. Also then saying, how are we going to do that effectively and efficiently? That is what keeps ourselves sharp on the long term, yet at the same time allows us to deliver on the short term. It gives us our priorities. It gives us our alignment internally. At the same time, we said with the pressures of the last so many years, six years of crisis also, and we have to have our priorities right.
The new reality, as we have called it at the time, the new reality linked with all the trends, all the tensions, all the possibilities and opportunities that are facing us. I'm not going to walk through them, but last year I was sitting here in front of you and saying, considering what we want to be and our strategic direction, considering the six priorities that are answering a reality that is different than yesterday. Well, we have, and I have personally three focus areas on my desk, and that was strengthening our portfolio, really also well allocating our resources, and then also the complexity, mastering the complexity. The complexity that we have by what we are, play in different categories, also geographically playing in every region and seeing the externalities. There is complexity. How do we manage that? How do we master that? Not only managing it.
The last 12 months, we have gone quite a long way already on these focus areas. I want to share with you a few of them just to illuminate, to show what is strengthening this company also, short-term and long-term. The first one was strengthening our portfolio. We have been working on portfolio quite many years, but we have sharpened the portfolio management tool that was going after these three dimensions. Approach the strategic fit first. How do our cells, you know that we are covering now more than 2,200 cells. Cells being a business in a geography, in a country. First of all, is there a firm strategic fit long term again? Is it fitting in our Nutrition and Wellness agenda? Does it allow to project profitable growth? What is the intensity of resource that it needs to get there?
These are the three main criteria that we have for judging our cells in our portfolio management tool. The first thing that we have to answer is our SKU management that we have been driving for many years now. In the last, for example, three years, we have reduced 30% of our SKUs, and that in spite of innovation and new launches. On the cells, where we use these three criteria, there are three possible outcomes. I shared them with you last year. We had to divest something that doesn't work and doesn't project potential of working, or fix it, or invest. We have done quite a few things already in that. You see the divestment. These are the visible ones. We have divested Jenny Craig, Alete, Milasan, a few days ago we announced that. Also PowerBar, Nestlé Waters Direct Europe, et cetera.
We have reshuffled also some joint ventures like DPA. Really going for that correcting in our portfolio. Yet at the same time, the most important part of it is to identify the businesses, the brands, these cells where we want to accelerate because they have and they entail a lot of promise and they do really deliver on our strategic direction. You'll see it basically going back to our strategic billionaire brands, the big brands where we have created and put in acceleration plans to actually drive or increase even better their growth performance. We have defined where we want to put the resources and allocating resources was another one. There again, thanks to the cell methodology that we have, we are able to really allocate where it matters, where it delivers profitable growth.
Just a few dimensions of resources, there are many more, but CapEx, the capital expenditures or marketing support that we put behind brands and R&D. You see there how we are also plotting to move our R&D spends or CapEx towards, I would say, the Northeast from lower growth and low return to higher growth and higher return. For example, in CapEx where we have capped last year, the capital expenditures to 4.5% on sales. We have had a discipline there actually coming in slightly lower. We've maintained that capping because it creates and it drives discipline and also discerning evaluations of where we put our money. While we have moved, for example, from the red box to the green box, over the last year, more than 10% of our capital expenditures have been allocated, I would say, in a better way.
Same with R&D where we moved to the Northeast, putting the right R&D efforts into the dimensions that matter. You see also the marketing support. The more you go on nutritional fundamentals, the more you have rational arguments and science into your portfolio, the more you have to communicate. Our marketing direct consumer facing marketing support has increased over the last years 25% in CHF. These are quite sizable support increases in the right places. They have been more and narrower and more discerning. Another decision that has been taken or that we are in the process of taking is we have reconfirmed that the importance and the commitment of this company to where we actually started, which is with children and the first 1,000 days of life. See that as a cornerstone of our agenda of nutritional fundamentals.
It is what we say, start healthy, stay healthy. A good start in life is the cornerstone, is the premise of a healthy life. We have, again, and the best example for that is the acquisition of Wyeth, where we really reconfirmed by acquiring geographic complementarity to what we already were, and also the scientific and consumer benefit platforms with also development arguments that Wyeth was really embracing very well. We want to strengthen our category focus on that start in life. We want to bring in actually our growing up milk. Our growing up milk, best known with the brand NAN, which is one of our top billionaire brands, NAN, that is covering the 1 to 5 years, and bringing that under the management of Nestlé Nutrition.
Nestlé Nutrition didn't manage that brand, we felt it would be, really engaging in that good start in life to bring it in there because to create a continuum, a brand continuum, if you want with our consumers, but also the logical continuum of R&D capabilities that are focused on these first years and ensure category focus and execution also in the markets of a complete portfolio. That is going to move to nutrition. We are in the process of foreseeing the consequences, working on that, and the reporting on that, and that redefined Nestlé Nutrition is going to be beginning of next year. In the same vein, a few weeks ago, we communicated a redefinition of the zone. That is actually a redefinition of the zone after many decades. That's to respond to the new reality.
These last so many years, socioeconomic developments have changed basically dramatically the face of the world. Countries, regions have developed in different intensity. They had and they do have different growth perspectives that need to redefine and realign the dedicated resources to develop the different geographies of the world. That we also allow in each geographic zone that we have defined the same, I would say, different dynamics of consumers emerging and developing market dynamics, et cetera. That's why we have taken the decision to put in Europe, Maghreb region, the Middle East, Turkey, also Israel, and the Northeast African region as that under the leadership of Luis Cantarell. That we have these dynamics all in one zone also.
At the same time, it will allow, also in the Zone AOA on Nandu, to really focus on the enormous potential that we have and the enormous complexity that we have in what is AOA. That is key, I must say, that we go and have the right resource, the right management time, et cetera, to develop the huge potential. Just think about the huge potential or the percentage of the world population that is living in that region, which is 75% of the world population, and they're working for a better tomorrow. The reporting of this new structure, of this new alignment, is going to be also the 1st of January 2015. Also communicated, and as a last point, is the creation of Nestlé Business Excellence, and to put that on executive board level under the leadership of Chris Johnson.
We're going to bring in GLOBE, Nestlé Continuous Excellence Initiative, and Nestlé Business Services under one executive board member level. That is to basically two dimensions. First, lever our scale better and more effectively, but yet at the same time allowing really the markets, the frontline to execute and to go for growth in their business and to compete effectively in the market. You know that Nestlé, we privilege and we will always privilege a decentralized structure to have the decision making as close as possible where the consumers are. That's the right structure. It use complexity, but it's the right structure to have decision making as an understanding of the market, competing as close as possible where the markets and where the action is. We have structures in 150 countries. We almost sold in every country. We have 450 factories. That has a certain complexity.
Actually 14 years ago, that was the whole meaning of GLOBE. 14 years ago, we established GLOBE with basic the famous three key objectives. It was to harmonize the business processes. It is to standardize the data management and align or raise IS/IT systems. It was a key enabler for transparency. It was a key enabler for rolling out best practice cross-fertilization. It has become part of our DNA to run this worldwide Nestlé effectively and efficiently. That is actually allowing what we called at the time also this plasma, the networked organization in a very effective way. GLOBE per se continues to evolve. It continues to adapt to the new technologies and new ways of working, the new needs of the business per se. Just think also digital, et cetera. GLOBE also has, by the sideline, has allowed us to also do that very cost effectively.
As you can imagine, with our complexity, how that would have been. GLOBE is also the key enabler of many things in this organization. It has been, I would say, the precondition and enabler of, for example, our Nestlé Continuous Excellence. It's a huge initiative, Nestlé Continuous Excellence. We started seven years ago in factories. We extended it four or five years ago beyond operations. It is now covering all functions. I would say 80% of the 340,000 people that Nestlé has are directly involved in projects. We have over 30,000 NCE, Nestlé Continuous Excellence projects, improvement projects running. It's a new way of working. It drives waste out, and it has been the base of our permanent each year delivering of savings of over CHF 1.5 billion. It is bringing Nestlé to a lean enterprise with a focus on the consumer in the middle.
At the same time, we have also, that's now as from, I think something like seven, eight years ago, established Nestlé Business Services to level up basically our, what we have actually in a decentralized structure, organized locally in each market to start leveling that up in five regional shared services and one global corporate shared service here in Switzerland. The service they cover, we see there are employee services, financial, workplace solutions services for procurement, also digital and e-commerce and media. Many areas that they are covering more or less to a certain depth. We still see significant opportunities to increase the, I would say the scope, the breadth and depth of the covering of lots of activities by the shared services. That is why we have created Nestlé Business Excellence.
Bringing these three building blocks that do have their place, that are part of our company, bringing that under one leadership of Chris Johnson. GLOBE, Nestlé Continuous Excellence, Nestlé Business Services. Definitely there, the equation is going to be not only one plus one plus one is three, it's going to be five. That is what we're looking for, to really drive, to leverage our scale in a much deeper way. We have done strides in it. There is still a lot of upside. Leverage our skills and drive faster best practice through the organization, serving our markets in a very efficient and effective cost-efficient way. For me, one of the most important objectives is to really have them, the markets, their back free so that they can really drive their growth, drive their markets for better performance, compete even more effectively and efficiently.
I hope with that I could share with you a little bit of insights on this, how does it all work? We have our roadmap, we're building our nutritional fundamentals agenda. We are building new platforms that are promising for profitable growth for the future. We are, at the same time, doing the right things on the longer term. We're never going to do something now that is at the cost of the long-term strategic direction. We keep the discipline and alignment short term while delivering long term. These steps are really defining how we are structured, how we work together, that's a continuous way of doing it. That is people who are doing that.
Results and success of a company is people, underlying is always this caring about the right talent, the right mindset, the right attitude, the right values and principles. We always have used this term, Nestlé is an and company. We have said that Nestlé is a company that is going into developed and emerging markets. We are a company that is going for premiumization and also PPP, the Popularly Positioned Products. We said modern trade and traditional trade and additional e-commerce. We said local and global, while also we are a company that is long term and short term. Long-term projection and direction, yet also with short-term intensity. With that, I come to the end of my presentation. Thank you for your attention, now I think we open up for question and answers.
Yeah. Thank you, 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. Please limit yourself to two questions. Now let's take the first question from the call. The first question is from Jon Cox from Kepler Cheuvreux. Jon, go ahead please.
Yeah. Good morning, guys. Thanks for taking the call. I just have really one question on the Nestlé Business Excellence, and what you plan to do there. Wonder if you could give some more meat on the bone, because obviously the Nestlé Continuous Excellence you've been delivering sort of one and a half billion in savings annually. You talk about one plus one plus one is going to actually equal five. Should we be looking at a couple of billion more in savings annually? Maybe just a second question for Wan Ling on China generally. You talk about struggling somewhat there. Whenever I look at the monthly retail sales coming out of China and look at that food and drink segment, it tends to be double-digit growth. I'm just wondering, what is the disconnect there between that data, and what you're saying there? Thank you.
Thank you, Jon. On Nestlé Business Excellence, you're saying, well, what is it going to bring more than Nestlé Continuous Excellence brings? Well, you have to say also, Nestlé Continuous Excellence has now bringing for several years over CHF 1.5 billion. It is exactly by bringing in these three dimensions that we go further and continue bringing CHF 1.5 billion. I must say, the whole Nestlé Business Excellence is not about cost saving per se. It is about bringing more effectively and efficiently, yes indeed, services to the markets. You see, I said we have financial services and we have employee services already to a certain extent work through shared services. Yet at the same time, you will see the differences between countries. Some are using it more in-depth than others for whatever reason.
If you see the scaling up, that's still possible to do even between the shared services, et cetera. It is clear that there's a tremendous upside for effectiveness of driving all best practice, et cetera, but also of cost efficiency over time. There is a promise of effectiveness and efficiency dramatically there. That is going to be driven by Nestlé Continuous Excellence. Nestlé Continuous Excellence is not per se. It's a way of going about effectiveness and efficiency and allowing the people to own it. It is more a mindset than actually something specific as a department. I don't know if you, Chris, who was going to look into that can already talk, but I think it is definitely this bringing together on the right level, giving the authority in the organization of the market to buy into it.
There's still too many possibilities of taking out shadow organization in the organization. Chris.
Sure. Well, thank you for the question, and it's good to be back. It was 14 years ago, as Paul had mentioned, that I was given this challenge to kick off the GLOBE project. Back at that time, the main objective was to leverage our size as a strength. As Paul mentioned, with GLOBE, we're able to harmonize practices, standardize data, and standardize systems to allow us at the end of the day to focus on what really matters, to maintain our decentralized approach, but not do everything decentralized. Moving ahead, if I flash where we are today, and this is now 14 years since I started GLOBE, it's a different world. Nestlé has changed. The external world has changed, but some things remain the same. Decentralization and focus on the business still remains to be very clear.
We have great opportunities across the organization to be more efficient. We have shared service, and we have a great network that's set up. We have a great chance to take this now to another level. Also now with Nestlé Continuous Excellence, we have the tools and processes to drive this even further. I guess at the end of the day, if we're successful, the best measure of success will be enhanced growth. At the end of the day, this will enable us to grow, enable us to make the efficiencies, make the savings to reinvest the business to growth. That ultimately will be the decision.
Thank you, Chris. Actually, you're not going back because you have much more now, and it's a little bit bigger. Wan Ling, maybe on China?
Hi, Jon. In terms of China, you have to remember our business in China as a market for us is actually growing. We're growing in nutrition, we're growing in waters, we're growing in professional. Where we have challenges, like I said in my presentation, was in specific categories. We saw that even before this year when China had austerity measures in place, we saw gifting coming down. Some categories were affected as the economy slowed down. We also saw a pulling back in terms of the trade inventory. The good news, even in those categories where we're challenged from a growth perspective, market share is actually growing. That's really good to see. Again, it's a mixed bag in China.
We cannot paint it with a broad brush saying that China is a challenge as a market in general, but just certain categories.
China, it's an important question because China is big. In China, actually, I feel personally that the fundamentals are there, our investment and platforms are there. We are somewhere in stepping one step back to jump better. We are correcting certain things that are, I would say, homemade. Nandu, maybe you want to say a few things?
Thank you, Paul. Thanks, Jon, for the question. To begin with, as Wan Ling correctly identified, and earlier on in Wan Ling's presentation, there's been a lot of data available in China from various sources. We've seen published information from our peer group companies, from local companies, and in general, we see performances have been mixed. In this context, the good news is our market shares are growing. Across all categories in China, we are growing market shares. In this context, it's good that we have many categories which are in fact growing in China still. We do have some categories where growth has been challenged, where the recovery has been slower than what we expected. What we are doing is understanding, in fact, because of market share growth and when we do research, our brands are continuing to be strong. Our brands are still strong.
We are leveraging some of the learnings from the businesses that are working into the businesses where we need some improvement. We are looking at the basics, fixing the basics, and leveraging the strong fundamentals, to make sure that we are in a good position to grow the business, to return to good growth as soon as we have some recovery in the economy.
Thank you, Nandu. Okay.
Thank you. The next question from the call is from Alain Oberhuber of MainFirst. Alain, go ahead, please.
Good morning, everybody. I have two questions. The first question is about the European pricing. You mentioned that pricing is now more or less flat at Q3. It was -1.5% in Q1, +1.3% in Q2. Could you give us a little bit about the environment, what you expect for Q4, and if you could even see a positive pricing next year? What are the main drivers for the improvement in pricing in Europe? Second, about North America. When you go into the different categories, in particular in frozen category, which are out of these four categories, pizza style,
Buitoni, Lean Cuisine, and Hot Pocket, where do you see is the biggest potential for upside? What was the disappointment also in Q3 in one of these subsectors?
Okay. Thank you, Alain. On European pricing, indeed, we saw some flattening, from negative to flat in pricing. Europe is not the place where you have easygoing pricing, and the pushback from retail is tremendous. Maybe, well, I would still ask Laurent, who is moving to the Americas, but he has managed until a few days this zone and has been very close to this. This is one of the major challenges, the deflationary environment of Europe. Please, Laurent.
We see clearly an improvement in Central and Eastern Europe, and that is driven by both input cost pressure on the one hand and FX. We have been capable to price up, and that reflects in the better pricing. In Western Europe, we start to see an improvement, but there, the deflationary pressure, which is triggered by the price war ongoing among the retailers, continues to prevail. We should continue to see an improvement, but it will be slow and will certainly take a little bit of time. What are the drivers? Indeed, the input costs and especially coffee and cocoa, which are extremely relevant to Europe, will continue to have their impacts. That's one. Second, our drive behind the innovation renovation helps us as well take some pricing. We should continue to see some improvement going forward.
Okay. Thank you, Laurent. On North America, I would ask also then Chris maybe to talk the potential
Okay
The trouble area.
Of the trouble area. Just to give some context, as all of you know, let's talk specifically about the U.S., is clearly very important for Nestlé, about a quarter of the sales. If we look at the business performance, we have a mixed picture, but I would say primarily some very positive notes. If we look at pet care, as Wan Ling had mentioned, we're seeing growth across all seven segments where we compete. That's the largest category. The second largest category is frozen, and was mentioned. Here we are facing some challenges. Four segments, each segment has its own issues and its own challenges and its own opportunities. If we start with the largest of the four that we compete in, is pizza. On a positive note, we're seeing some positive growth in the first nine months of the year.
We are seeing growth in our premium areas in pizza. We're seeing growth with our value brands in pizza. There are opportunities still to grow in DiGiorno, we're seeing where we have innovations like our thin and crispy crust, we're launching new items in this area. We have optimism that this, we see, will come back. If we look at Stouffer's, which would be the second largest area that competes in the, we call regular meal segment. Here Stouffer's is also, if you dig a bit deeper, a bit mixed. We have the multi-serve meals doing quite well. We have innovations like the meat lovers lasagna doing well. We have innovations like the macaroni and cheese cups doing well. We are struggling a bit on the single-serve side. Hot Pockets, the next in line, is competing in the handheld snacks area. This one we're struggling.
We had a recall at the beginning of the year on some of our items. We've also been hit with some issues related to the reductions in federal assistance, which is a big part of the consumption of this particular product. What's encouraging is we're seeing increases in velocities, regains in distribution, we're seeing this one is starting to come back. Lean Cuisine would be next, Lean Cuisine is a challenge. We're seeing a declining segment. We are also declining in this segment. We are seeing where we have innovations where we've launched areas, for example, in breakfast, in snacks. These are doing well. We are, across the board, really facing some challenges in frozen food. However, we do believe in this category. Frozen, we believe that this is a very worthwhile category for us. We have leadership in all four of these segments.
We have very strong brands. It's our challenge to make sure that we're innovative and that we ride and address consumer needs better and better as we move ahead. In particular, you mentioned the 3rd quarter performance. We intentionally backed off on trade promotion in some areas. This had, of course, an impact in the quarter. If we look ahead, based on the strong innovation pipeline that we have in these areas, I'm confident that we will be able to see increases.
Thank you, Chris.
The next question from the call is from Alexia Howard of Credit Suisse. Alex, please go ahead.
Good morning. Two questions, please. You're maintaining a full year guidance of around 5%. You're running at 4.5% at the 9-month stage. In Q3, there was a slowdown versus H1. How do you rationalize moving up from 4.5% towards 5% for the full year? I have a follow-up after that, please.
Thank you, Alex. We are aiming at around 5%. We are 4.5% year to date. You say that's a challenge for the last quarter, it is. We aim at around 5% and we see possibilities, and we're going to put the right efforts in to get there. It is clear that it's always the same thing. Is it 5%, 4.8%, 5.1%? Actually, I don't care too much because, well, it's like Usain Bolt when he runs 100 meters, he doesn't run it always in the same time either. Depends a little bit on what's coming in, the wind, and all that. The fact is, we aim. The most dangerous thing when there is pressure, you start to adjust your targets. You start to adjust and accommodate yourself instead of maintaining the pressure and build the right resources.
I would call it staying and waking up half an hour earlier. It's tough out there. It's not easy. A lot of competition, but a lot of headwinds. It's all true. That induces you to the question. That is my motivation to say we aim for, that's what 340,000 people are working for, and I'm confident.
Thank you very much. My second question is specifically on the U.S. Is it possible to give us some trends in terms of how U.S. growth looked H1 in Q3? Chris hinted that some of the weakness in the U.S. was due to backing off some promotions in frozen. Will that continue as well? Thank you.
Well, we don't give quarter results per se, so I can answer that easily. We have been backing off, and that is a decision. We have been backing off of quite a few sales, if you want, in the U.S., per se, where the category was because of soft trading environment, because of low consumer, et cetera. We're really going into the wrong corner of being almost everything, 100% on deal. We backed off on that. These are huge categories, so we see it all in one basket. We have been taking out, for example, on premium retail-based ice cream, for example, we backed off. We say, well, that's not our business to be competing only on price and driving a lot of efforts for nothing, for no substance, for no even strategic dimension can be learned. That's the same thing in frozen. Pizza is not pizza.
It hurts, and it has to be compensated. That takes some time sometimes in very strong, very broad categories like frozen. That is what we do. That's where we're up to. We start to see very positive signs of certain turnarounds that are promising. That's where we are. I'm confident too, in the frozen business in the U.S.
Thanks. The next question is from Jeremy Fialko of Redburn. Jeremy, go ahead please.
Hi. Jeremy Fialko, Redburn here. Just got one question about pricing in AoA and the weak RIG that you had there. Can you just talk a little bit about what sort of effect you saw from the price rises there in terms of volume? Do you think that was a little bit of a temporary effect as you got a bit of a price gap relative to your competitors? Therefore, would you expect that RIG to improve over the remainder of the year? Thanks.
First of all, I'm going to give it to Nandu. It is clear that you say in AoA. We call AoA internally a little bit of CNN. That's an extremely complex region with extremely different dynamics. There is no price increase in AoA. It's country by country. That's why, I want to give it to Nandu to give a more precise answer there.
Thank you, Paul. Thank you, Paul, and thanks for the question, Warren. Let me answer your question, and I personally fully understand your question, and I think it's a very legitimate and good question to ask. Let me answer your question in four parts. The first, I'll tell you about the environment. Second, I'll tell you what's going well. Third, I'll tell you what the problems are, and fourth, I'll tell you what we're doing about it. Very structured. First, the environment. Paul alluded to it earlier. We're facing economic headwinds. We see it in the results of our competitors and peer group companies. On top of it, you have a war zone in the Middle East, you have Ebola. There's all kinds of stuff happening. The good news, despite all these problems, we're gaining market share across the zone, across categories.
With the exception of two countries, which Wan Ling mentioned, which is China and Oceania, across the zone, we're actually growing mid to high single digit. When we're growing mid to high single digit, this is comprised roughly half of it is RIG and half of it is pricing. We have gotten pricing because of commodities and currencies and so on. We've taken pricing. Pricing has been accepted. We are growing RIG. In fact, this is reasonably healthy in line with our two-decade average. Our issues, and just to continue on this one, apart from growing market share and growing RIG in these markets, we have a lot of good consumer-facing activity. We have digital activity, breakthrough innovations across markets. Philippines back to growth, South Asia back to growth, ASEAN back to growth, Africa growing, Middle East growing despite all the crisis in North Africa.
Good stuff happening. Issues in China, Oceania. What are the issues in Oceania? What are we doing about it? Oceania, the issues fundamentally have to do with the trade structure, which as you know, is dominated by two players who are, as a result, there is a certain amount of pressure coming on the manufacturers. We've stayed true to our principles, which means we have paid a price. We are responding to the situation with more innovation, with focus on alternative trade channels, and we're going to work through the situation over the next few months to make sure our business gets back to growth. The fundamentals of our business in Oceania are sound. We have good people, we have strong brands, and we have good focus in place. China, I mentioned earlier, and I'll repeat my answer. Fundamentally, in China, we have market share growth across categories.
We have some categories which are doing better than other categories, and even in the categories that are not doing well, we have brands which are doing better. What we are doing is our brands are strong, our competitive position is strong. We're taking the learnings and making sure the basics are strong so we are well-placed for a recovery. To come back to your original question, we actually have good RIG except for a couple of pockets, and those are areas which we are addressing.
Thank you, Nandu. With these comments, I am very motivated too. Jeremy, we changed your name to Warren, but you're Jeremy. Please.
Yes. The next question, in fact, is from Warren Ackerman of Société Générale. Warren, go ahead please.
Hi, it's Jeremy here. Actually, that's Warren. The two questions from me are, can you talk a little bit about the competitive environment, Paul, in coffee, both soluble coffee and Nespresso? We're seeing some really low prices out there for Nespresso compatible capsules from some of the European discounters. Paul, I'd appreciate your kind of thoughts on the French competition authorities ruling with regards to Nespresso and what it means for your intellectual property and your R&D that you put into Nespresso. Just generally about the coffee environment and what you're seeing. That's the first question. Then just secondly, just back on China, appreciate your comments, Nandu, on China, can you maybe be a bit more precise as to specifically which categories within China have been impacted? You talk about gifting, does that mean Hsu Fu Chi, for example, has been impacted? What's happening in baby food?
What trends are you seeing in baby food with Wyeth in China? If you could maybe just talk around some of the categories and when you think China might pick up, that would be great. Thank you.
Warren, thank you for your questions. I hope you ask this question with a Nespresso in front of you. Competitive environment, we always said that there's a lot of noise, a lot of writing in the press about things linked with Nespresso. At the end of the day, the battle is the best cup of coffee, and that is where we're really focusing on with quite a lot of initiatives. Maybe you, Patrice, who is leading that business, your comments on this, also the French competition, the authorities, competition authorities, and the relativity of these things. Although they make a lot of noise, so much more of your attention is just driving the business.
Thank you for your question. I guess it's Warren, really. Thank you for the question. Just to frame what's happening. Coffee is becoming an extraordinary category over the last 10 years. Premiumization growth, it moved from being a commoditized category to one of the more premiumized, interesting category in the food industry. This has been led to a very large extent by Nestlé through our Nescafé brand and over the last 10, 15 years, through Nespresso. Not surprisingly, a lot of companies are looking how to get a share of this high growth and important margin in it. We have led that, and we want to continue to lead this, and you have seen our results there.
Let me talk about the two parts, maybe first Nescafé, where we have, by far, a very big leader on soluble coffee worldwide, where we're doing continuous effort launching new product, achieving growth, and about 18 months ago, launching a big initiative called the REDvolution, where we are restaging our product, remodernizing all what we do, and launching a worldwide campaign under the slogan, "It all starts with Nescafé." We have implemented this in about 70% of our markets today with a lot of success, and we believe that we are leading and we'll continue to show the trend and to convince consumer worldwide, and very importantly also in emerging market, that we do extremely great cup of coffee. This is what we do on soluble coffee with a significant R&D effort behind, and really also in soluble coffee, which is less talked about, very nice growth worldwide.
We have the big battle that come on the, what we call single capsule coffee, where Nespresso has been leading, but also Nescafé Dolce Gusto, and you have seen results in Europe there, but it's also worldwide, where we have, on one hand with Nespresso, achieving what to call the affordable luxury cup of coffee, and with Nescafé Dolce Gusto, with a different distribution system, addressing a more everyday premium coffee very successfully. You've seen result at the heart of Europe with very difficult economic condition. We are achieving massive double-digit growth. We think we are in a very good position. Now, as I said, this has attracted a lot of competition. Today, Nespresso has 185 competitors. Of course, this is stimulating us to do new thing.
We hint this new machine, new Grand Cru coffee, new system, which we launch in the U.S. to tackle the huge opportunity in the U.S. with a longer cap. We think we're well-placed. We'll continue to work at it, and the results show that there is possibility for us, in spite of competition, to continue to grow. More specifically on the French antitrust, I would like to remind you that this is a decision that we made to find remedial actions to get out of a situation where we had a bit of a limbo of having very few, and I repeat this because sometimes the feeling is it's as part of a strategy to have some legal action. Very few out of these 185 competitor, we have a handful of competitor with which we have felt they are clearly infringing our intellectual property.
We have taken action there, and we have lost on some, and this has triggered for us new situation. On the antitrust situation, some of our two competitor felt that we were having action that were not for an open market. We have decided proactively to enter into negotiation with the antitrust authorities to allow us, which was very important, to go back to innovate, because as long as we were in this situation, it was difficult for us to move on. We have found a common ground. We are satisfied with what we have done. I believe our competitors are satisfied.
We are moving on now, and we are able, again, to innovate, to do the change that we do all the time and have all been done to improve our machine, to improve our coffee and go on and continue to win consumer day after day with new cups of coffee.
Thank you, Patrice. It's clear that we are investing heavily in innovation and new ways of doing things also in Nespresso. It is logical that whenever we feel our intellectual property is somewhere challenged, that we have to react. Now, the battle, as I said, is for the best cup of coffee and the best relationship with consumers. Definitely, one of the reasons why we disengage from keeping a battle going is exactly that, to keep our attention in the right place and not being dragged into something we don't want to be in. China, more precision on China, it has been said that there is a convergence of factors, China per se, the environment of growth.
The gifting I mentioned was very important, not only at Hsu Fu Chi, we had also in beverages, and it was part of the landscape that we also, being local, very much entrenched in, that has softened dramatically. We have been talking about China quite a while already, but I can tell you, infant formulas, milk products, all that is really going very well. I would keep it there. I think there is a combination of factors, but as Nandu has said, in many categories, we are gaining market share. That is important. Outperforming the market. We have a good pipeline of innovation. We are correcting certain things. Yes, indeed, certain things that we feel we could do better. We are destocking. China is a market with different layers. There is stock. Distributors A, B, C, getting to the third, fourth tier cities has that dimension.
I feel we are doing the right things and all conditions are there to really seeing return on our investment in money, but also in management time and brands. That is what we can say in China. It is something that, are we happy? No. Are we satisfied? Well, with what we are doing, yes. Results have to come. Thank you.
Thanks. The next question from the call is from Celine Pannuti of J.P. Morgan. Celine, go ahead, please.
Yes, good morning. My first question is, Mr. Bulcke, you talked about your portfolio, and you show us this scatter graph with green dots and red dots. Can you kind of give us the magnitude of what these red dots represent for your portfolio? You mentioned that there were three ways you could address those. Are you satisfied with the progress you have made so far on those red dots? Should we expect that we will see an acceleration on the disposal front? That is my first question. Second question, in fact, there has been a lot already on China, and I am not going to add to that, but if I step back a bit, what we see is that growth rate in AoA and overall in emerging market is slowing down.
Yes, some of those economies have slowed down, but it seems the slowdown that the category is facing is much higher. Could you, first of all, talk about for the overall Asian region, what is the market growth? Second, if you could, why is it that you see such a slowdown? Because presumably it cannot be only because of some GDP slowdown, which has not been as abrupt as the category slowdown you seem to face. Thank you.
Well, on portfolio, the red and green dots, how big is that, et cetera, we don't give all these details per se, as you can imagine. For example, we are measuring 2,200 cells. I think there is slightly 200 something of cells that we say we have to do something here. We fix it or divest it. Now we're not speaking about 2,000 business that we sell. Cell is a category in a market that may be repeated. Sometimes we have one brand that we sell off that is equivalent several cells. It is a small part of our business. Actually, last year alone, we have divested over CHF 1 billion equivalent sales. They add up very fast.
We are privileged to have and lucky to have very healthy cells, and normally cells that are promising, not there yet, so we have to fix them, and that are aligned with our strategy. It is when they are not aligned with strategy, not promising a profitable future that we go up really to see, can we fix it? If not, we divest it. As I said, we have been moving a little bit more intensely on this. I am happy. Well, I'm never happy. You want to, on paper, things going fast, et cetera, but you have to do it well. There's responsibilities linked to that. There are dimensions that are not just on paper and figures. That is how we are, that's how we operate, and that's how we do the things.
You have, as I also say, and somebody is going to smile, you have to give time to time without losing time, though. You have to have the agenda, you have to have black and white, you have to have the internal discipline, and then see. You have to make the decision, and then see how you do it. The how is very important in many things. Now, I do believe that the major outcome of portfolio management is resource allocation. It is really identifying what matters, what is promising, and resource it well. There, I think that's a little bit of a shift, where we had, and still we have upside there. That we had a little bit of this, everybody had a little bit of things. That comes with decentralized structure, comes with empowering people, et cetera.
At the same time, we have to find this balance between allowing localness, allowing capital decision making, yet at the same time that bringing the holistic view on things, strategic direction, priorities, et cetera. I think that's exactly what portfolio management does. It allows the whole market everywhere to use the same criteria to judge, and it builds a tool that is omnipresent. Everybody knows, everybody works with portfolio management. That is linked with our strategic business planning process, and that is the strength of this whole tool. It creates discipline. It shows you things that you don't want to see sometimes that you have to swallow, and that is the strength of this tool. Again, on China, that's a very-
That's the words you were looking for.
Asia and China.
No, yeah. You were turning a lot. On Asia, AOA in general, and growth. Nandu maybe, because again-- Please do. I always say we are not selling GDPs. Whoever comes with a GDP is down, although that's the environment you're swimming. We should not be floating on the river. We should be swimming. There is no such thing as, I would say, meaningful to us, GDP of AOA. Anyhow, I leave it to you to answer.
Thank you, Paul. To begin with, Jeremy and Warren, apologies for the mix-up in the names. I just read off the screen, and apparently, I read the wrong part of the screen. Celine, good question. I think Paul summarized it very well. In general, the underlying dynamics across Zone AoA, that includes Africa, Asia. The underlying dynamics are there's increasing urbanization, there's a growing middle class, there's still a large young population increase in demographic dividend. There are many drivers for improved consumption, and those drivers haven't changed. What has changed is the speed at which some of this stuff is happening, and that's what a slowing economic growth rate means. We've always had two drivers to growth. One growth is to take advantage of the rising tide, which I just mentioned, which may be rising less slowly now.
The other tide we have is innovation and communication, particularly using new media. We're using all these levers to get growth. When we see growth in some of the economies that I mentioned earlier, we have actually outperformed the economic growth. Now, that is pretty much what our intention is, and the best example we have is in fact from a developed economy of Japan, where we have excellent growth, both RIG and organic growth, coming fundamentally through innovation, new business models, and new methods of communication. That remains our focus to try to get growth in spite of economic conditions, which remain hard.
Thank you.
Okay, thanks. Before taking questions from the room, we'll take a final question from the call. Patrik Schwendimann, Zürcher Kantonalbank. Patrik, go ahead, please.
Patrik Schwendimann, Zürcher Kantonalbank. Hi, Paul. Hi, Wan Ling. I have two questions. Firstly, regarding the pricing. Pricing was in Q3 around 2.9%. How comfortable are you with your current pricing? Do you think it was enough to hedge the margin against higher input costs and lower currencies? That's my first question. Secondly, what do you expect from the environment for 2015 compared with the current year? Thank you.
Are you satisfied with pricing? No, I rather wouldn't have it. It's very difficult. We are always aiming, we're a company. Again, there's top line and bottom line. We don't do pricing here in the headquarters. Pricing is done in the markets. They have also that top line, bottom line, and it's tough. If you cannot do pricing, you have to do other things to deliver on that promise of growth and bottom line and margin. We do see, it takes some time, we do see, first of all, there was. Again, you have to see category by category. In general, we didn't see these extremely high raw material price pressures that we had a few years earlier. We see although you have milk and that had extremely high pressures.
I think we have been able to answer, and again, we have this natural hedge of having different categories and being able to fend that off. You see also we are not doing it on the back of lowering our marketing expense, because that would be fatal. Again, pricing is hard. It's not easy, but it's necessary, and we have to do what is necessary. We have to build the right arguments to do that. At the same time, we combine with trying to absorb part of the need through our efforts to reduce costs on the other sides, because at the end of the day, we have to be able to compete. I'm happy. Well, we are aiming to deliver top line and bottom line, and the bottom line would be proof of being able to do what we have to do.
The environment of 2015, I would ask you. There is one thing that is characterizing our world now today too, is that there's lots of volatility and it's hard to predict and nobody dares. You saw the latest, again, estimates of the International Monetary Fund, World Bank, et cetera. There are certain convergence, again, lower though, of 3%, 3.5% of growth GDP. As I said, we don't sell GDPs, and luckily so. We have to outperform depending on the markets, and I don't see many all of a sudden tailwinds coming in, although being an optimist, I should. We have been coping with that for so many years, not only the last years. We had these periods even in the past.
I think one of the characteristics of Nestlé has been having a company that's able to adjust to see without losing time, without losing focus, again, on the long-term perspective and strategy it has, because that's very important. In spite of all, how can you keep your line going? Because that's where the value creation is. That's where you invest in longer term. You don't invest in R&D for 2015. You invest for longer term, and to keep that going is extremely important to me. How can we continue in spite of lower growth, 3%, 3.5%, and keep the strategic direction and do the right things longer term also, which is important to me. We are putting the right stones in the right place to be able to be, I would say, successful and deliver on our promises also in 2015.
Thanks. Okay. Thanks, Paul. We still have time for some questions from the floor. Any questions? That doesn't seem to be the case. Paul, Oh, sorry. I apologize.
I have one question.
Wait, as we are webcasting.
Hi, I'm Rachel Richterich from SDA Swiss News Agency. I have questions about health. You told us about defining your territory and what are exactly the limits. You're not converting big pharma. What is the next step after Galderma and skin health? Why are you focusing on health? Is it a trend? Where exactly are you focusing on this business?
Thank you for your question. It's a good question in the sense that it really is something that is out there and saying, look, Nestlé food and beverage, bringing this nutritional, I would say, benefits towards a broad range of products, that is what we're known for. I always say it's CHF 90 billion of the CHF 92 billion. That's what we are. That's Good Food, Good Life. That is what we're working for. Yet at the same time, it's not that it was out there, all of a sudden you see it, at the same time, Nestlé Health Science is answering, as I said, the convergence of dimensions that are really getting to the surface. That may have a hint or a flavor of is that pharma? Nestlé Health Science is going after the specific medical conditions where nutrition can be linked with.
You see what's happening in society. You see the aging, the needs, the non-communicable diseases. You start also to see that the healthcare systems that we have, as they are defined now, are extremely expensive and increasingly expensive and increasingly hard to deliver. You see the 80% of the world population building middle classes, which is the developing world. Although they're softening slightly in growth, definitely that's where these middle classes are going to build their social structures, healthcare is part of that. How are they going to do that? Do they have the money to build the same systems as we have here? There's many other ways of going about health. Nutrition has always been there, now we have also the science to understand and to investigate better how nutrients interact with the human body, short term, long term.
How they can be really and are an inducive dimension, bring health if you do it the right way, if you have lifestyles, if you have diagnoses of certain conditions that you're going to and all that. Fantastic. It's a huge opportunity, it is linked with what we are, enhancing quality of life of people, being linked of quality of life with people. Nutrition, health, and wellness, the pillars we build upon there. We are passionate about driving increasingly our innovation through science and knowledge, understanding of which is adding the value. Well, nutrition and Nestlé Health Science is all about that. It is out there. It is a market that is in the making, that's why the question come, what is this? Is this pharma? It is not pharma. We're speaking about consumers here.
There are pharma arguments there because you go more deeper in science. You're going to have some clinical trial dimensions into it. That's the passion that we have for it. It's added value. You go for skin. Actually, skin, by bringing Galderma, that was like an ideal point where we also have redefined our relationship with our partner, L'Oréal. L'Oréal is all, and they say it, we are all about beauty. Galderma, it addresses well, skin health. We are saying nutrition, health, and wellness. Skin being, and I showed it, the biggest organ you have, but it is your more obvious permanent barometer of how you feel, what your health is. There's many dimensions of signs that are applicable in different combinations between nutrition and the skin or nutrition and the stomach. Many same similarities there. We feel there's a promise.
It's a promising market per se. It is already a company that is successful. It is leading in their specific field of therapeutic skin health. It is leading there. It has invested lately in more capabilities to be leading there. It is something that is, I mentioned it, 5,000 people passionate about what they do, competing in over 80 markets directly and indirectly through affiliates. It has five factories. It has eight factories. It has five R&D centers. It's there, and it is having their fortune and their definition of strategic direction very clear. We want to be part of that. There is commonalities that we didn't do it for that, but there is scaling of science definitely in the future to be landed there. It is enhancing quality of people's lives through nutrition, health, and wellness, and science-based innovation.
It ticks off the three dimensions, and it's going to help to really have Nestlé building upon its strategic direction of nutrition of health and wellness with promising profitable growth platforms. It ticks off all the boxes.
Thank you, Paul. John, you had a question?
John Revill, The Wall Street Journal. I've got a couple of questions for you both. In terms of you've spoken about the subdued economic environment in Europe. This seems to now be spreading to sort of Northern Europe as well, which previously had done quite well amidst all the horribleness out there. I was wondering what you're concerned about this subdued economic environment on consumer spending. Do you think this is going to continue for a while? How long it's going to continue for? Just your general thoughts on that affecting sort of the food industry. That's my first point.
My second one is, you failed to reach 5% last year. Consensus is actually below 5%. I know you said you're going to strive for that this year, if you don't make it this year, that's going to be two years in a row. Does that mean the model's broken?
Let me answer the second question first. I mean, the model is broken. The model is not broken. We are growing, outperforming the market and all that. That is what we aim for. We have delivered 6.1%, 6.2% in the last 10 years. The model was broken too, because we over-delivered. I really want to take distance from this agony. This is agony. You're 6.1%, 4.9%, you hear the model is broken and all that. First of all, this is by aggregation of many dynamics, you can imagine. You add it all up. If we would be managing with the aesthetics of the figures and all that, we would be really tweaking and forcing. That's not our reality. Please come back to reality all. It's outperforming, it's going about your agenda, it's delivering and building upon your strategic direction.
It is delivering on fueling for growth, and et cetera. For me, that's what we're Around 5% is a very presentable dimension in the days we have today. Actually, the Nestlé model per se was something that was given by the outside world, because we were so explicit in our internal aims and targets that actually it is hounding us to a certain extent. There's one thing, I keep the 5%-6% as the band that this company should be able to deliver. Why? Let's go back to why is the 5%-6% or around five or above five? Even if, the question came, growth of next year globally is projected to be 2.8%, 3%, 3.5%.
I kind of get rid of the definition because we can now start saying, "It's going to be 2.8%, 2.9%." You can imagine if we would manage a company as big as this company on the premise of 2.8%, it doesn't matter too much. It's lower. There's softness in the market, and it has many reasons. I feel, coming back to your first question, Europe. Europe, there is structural dimensions in it. That's why. The emerging markets are linked to that. They took a needle. Certain markets were overgrowing, heating up their engines. They are softening, linked also with the developed markets, that didn't pick up as fast. Many emerging markets are linked to that dynamics too, let's face it. Growth is going to be 3%, 3.5%. We as a company, we say we want to go after added value growth. Added value means science.
We are building new platforms that do have growth promises that are higher. Should be, because there's new markets, there's new arguments to be built in. Just think about Nestlé Health Science. Skin health should have higher growth markets. These are dimensions that come in. We are building also through portfolio management, focus on growth. We should outperform. I'm the first to say we don't sell GDPs, but if you want to have a comparison, if the world is growing 3%, 3.5%, we should grow faster. Hence, that 5%, and that is what we're looking for. Did we fail? Are we going to fail, et cetera? No. We are going about our agenda, driving our growth figures where we are in a wise way, not compromising the future and outperforming the market. That is what we're looking for.
Internally, and they all know me for that, I'm extremely hard. There's 10,000 reasons to soften our guidance. There's 10,000 reasons to be apparently realistic. I know one thing, in an organization like Nestlé, if you soften up, you may get what you want, and that is what is driving us. That is why we may actually look arrogant, saying, "Whatever happens out there, we continue." Well, there's a certain, I would say, arrogance as a result of conviction, belief, motivation, and that's something that I want to put clear because I feel this is not really adding to my scheming here. On Europe, I don't know. You mentioned that it's going to take long. We always said a few years ago when the crisis came, we said, "That's going to be long," because the crisis was deep.
It was also, I always say that there's not only a financial crisis, there was actually a value crisis to a certain extent. It was something like living beyond your means. If you do a loan and you cannot pay it back, well, there you go. That's living really concretely beyond your means. We were speaking about society that were living beyond their means. That's where you start talking about structural dimensions. Some countries are doing many efforts to go after them and trying to give correction to them, and that's hard on the population. You see some growth coming back there. Just think about the southern part of Europe, and you see quite promising trends. Some of the markets are harder to have for whatever reason. I'm not going to give a judgment to that.
A harder time to do what they need to do. They are big, they are impacting Europe. You spoke about the northern part is linked to that reality, you see some sputtering there, I mentioned it before. How long is that going to take, et cetera? Again, we are not selling GDPs. We have been through the whole crisis in Europe. We have been delivering growth, real growth, real internal growth. Why is that? Because again, we said we are an end company. As emerging markets, when the developed markets were really sputtering hard, we didn't say we back off there, go for growth where it is. We went there, but we stayed there also where it was harder to get through innovation, through adjusting our sails of our ship, and to really take initiatives that we're reverting, we're defying gravity.
That is what we're doing, that is what we should do in Europe. Look, at the end of the day, if the economical situation is bad and all that, at the end of the day, eating well is one of these affordable luxuries that maybe, it is for us to make it so compelling that people go even back more to food. Remember, we always said food in the family budgets, or in the personal budgets, because families is also in that. The person's budget is in Europe between 11% and 17%, give and take 10%. Some countries even lower. If we can just take true arguments and all, some of the 85% that is somewhere else, traveling, big car, speaking against other industries.
If I can motivate them to go back to something that can deliver happiness every day, which is eating well, having good moment, a good cup of Nespresso or et cetera, I can only bring 1% and that's growing 10% in Europe or 7%, 8%, that's actually what we should do.
How long do you think this subdued environment will remain?
Seven years and a half. I don't know. Jon, you know that we don't know.
Yeah.
I think it's structural. It's going to take some time, but I fundamentally believe Europe is going to get it, get over it. There's a fundamental thing in Europe that inner strength, diversity, good schools, we have it all there. That's the drama. We have it all. We just have to embrace work a little bit more maybe, and find it a nice thing in life to work hard and be competitive again and exporting what we can export. So many things we could export that we are well. I think that's eventually going to come over and it's going to take some time. Politically speaking, it's not easy all that. A little bit more of their leadership maybe there too, us speaking up louder maybe too. But the intrinsics are there. That's why we said, world is changing. Everybody goes east.
We say, yeah, we look there, but we are here too. 50% of the world growth, give and take, of the next five, 10 years, is going to come from the developed markets. 50% of the absolute growth, that's what I read. Well, if they're right, I'm not going to leave it.
Okay, thanks. We have time for one last question. Ueli, you had a question.
Ueli Hoch. Hello? Ueli Hoch, AWP. Could you give us a bit more color on how you work in countries with Ebola and what impact do you expect if the disease is spreading further around?
Well, Ebola, that is something that touches the whole society. I don't even speak as a company now. Ebola is something that apparently is, not apparently, is conditioning the world. Your question, is it what if or what do we do? Because today it is, and although we see some spots coming out of that region, but it is something that is conditioned by our Zone AOA now there, where we always have one thing. First of all, it affects us as it affects society in general. Safety of people, and in that sense, our people is important. We are now not having operations in the countries that are most affected. We don't have factories there. We don't have a very physical presence.
At the end, but we are on high alert in the zone there specifically, and the zone is linked with our crisis management dimensions of the corporation. We're also helping in the sense that you see the International Red Cross and is doing specifics. We do actually in many regions, like Ghana, Ivory Coast, projects already linked with cocoa farming, all that is linked with our cocoa plan. With also part of these actions are with the Red Cross. That collaboration is there. We're intensifying that with quite a few companies, financially, if you want, but also through our employees and all. It is something that we are totally aware of, alert in as part of society. I think it's caring about our people and the people that are working with our people where we really can have a direct impact.
Think about what we're doing already in the farms and all, hygiene and sanitation is I would say the most fundamental common denominator of what we do there and creating shared value as we call it. That is actually one of the preconditions of retaining or containing Ebola. These are concrete things that we can do as a small part of that society, but being totally part of that society as part is definitely something that is the first priority. I think that's what we do. We are on high alert. We are caring about our people. The question may come, yeah, but cocoa and all. Well, I feel people is more important than that. Cocoa, we do have, we are aware of that too.
It is a cocoa supply comes out of that region, and there we do have normal covers and looking into that too, but I can imagine that is not the highest priority we have there, although it is important to us.
Paul, some concluding words perhaps for the conference?
The concluding words, I think I'm going to repeat myself. It is considering all, and I thank you for your question because it allows us to really connect on the important issue. One of the most important issue that we hear and feel and actually intensified over the last weeks is slow growth. Basically, common denominator, tough environment, and for whatever reason. It is true. I call it there's no tailwinds, because we spoke so many headwinds. No tailwinds. What I wanted to share with you was the fact that, yes, we keep our targets, we aim. We are not paranoiac about we want to outperform, and we want to go about our agenda with conviction. Our agenda that is strategic, the nutritional, wellness dimension that we want to build into our capabilities, because they entail profitable value creation, and growth for this company.
This challenge that short term induces sometimes to tweak, to change, what you aim for or to lose sight of the long-term perspective of things is a danger that we don't want to do. We are aware of that, and I just wanted to share that with you. I think, also your questions helped us to explain a little bit further. Once again, thank you very much for your attention here present and over the phone and the webcast and see you then in a few months' time.
Thanks, Paul. As usual, we're happy to take follow-up questions via email or Twitter, and I'm sure you know the addresses. Thank you very much.