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Overview of activities, risk factors
2.3 Strategic growth areas
DANONE
REGISTRATION DOCUMENT 2015
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2.3 STRATEGIC GROWTH AREAS
True to its mission of “bringing health through food to as many
people as possible,” Danone reaffirmed and translated this mission
into a Manifesto.
This Manifesto is the core of the transformational “Danone 2020”
five-year plan, which focuses on three main streams:
•
Alimentation: encourage healthier eating behaviors;
•
Strategic resources: strengthen Danone's ability to protect and
optimize our essential resources—water, milk and plastic— and
secure its license to operate in a cycle-oriented way;
•
People and the organization: the goal is tap into the full range of
talent at Danone to give its corporate architecture more solidity
and more relevance for today's world.
Alimentation
Danone does not limit its mission to simply satisfying nutritional
needs. It also includes a cultural, social, emotional and physiological
dimension linked to local eating habits in each region around the
world. Danone has chosen to provide food that takes into account
each community's own way of life while using pleasure as means
to get people to adopt and maintain healthy eating behaviors. The
idea is therefore not to focus exclusively on the sale of food prod-
ucts but to adopt a broader vision and promote dietary practices
by offering a superior product and services experience as well as
a healthy alternative that is adapted to the communities while still
retaining the goal of building, fueling and protecting health capital.
In that context, demographic trends and the major nutrition chal-
lenges generate new growth opportunities for Danone. A balanced
diet is in fact a genuine challenge in a world where 25% of the world's
population suffers frommalnutrition and 10% of adults are obese. In
this context, each of Danone's businesses – Fresh Dairy Products,
Waters, Early Life Nutrition and Medical Nutrition – contribute to
this mission and play a role in the profitable and sustainable growth
strategy that Danone has set. Danone is thus developing its activities
in all of the world's regions, notably in emerging countries. They
constitute a key lever for Danone to successfully carry out itsmission
while ensuring its long-term growth. In 2015, emerging countries
accounted for 52% of the Company's sales.
To implement its strategy, Danone relies first on major growth
markets in which it enjoys strong positions such as Indonesia, China,
Russia, the United States, Mexico and Brazil. In these countries,
the Company continues to develop the consumption of its product
categories, especially through innovation.
Danone is also pursuing its expansion in new countries in order to
develop new sources of growth. Since 2013, Danone has accelerated
its growth in Africa, with the increase of itsmajority stake in Centrale
Danone (Fresh Dairy Products, Morocco) and the purchase of an
equity interest in Fan Milk (Fresh Dairy Products, West Africa) and
Brookside (Fresh Dairy Products, East Africa). Danone's goal is to
take advantage of all of the growth opportunities Africa has to offer
in the near and medium term.
With a presence in more than 130 markets, Danone is committed
to developing and optimizing its organizational model to make
the most of its global size while providing strong support to local
businesses. In the near term, Danone's priority is to strengthen its
various supply, distribution, manufacturing base and quality control
platforms and to fuel future growth by relying in particular on its
ability to innovate. Innovation plays a key role in the implementation
of this strategy in order to adapt the products and distribution to
the local conditions and consumption patterns.
A new approach to managing strategic resource cycles
Danone has decided to focus increasingly on the upstream segment
of its activity (environmental management, raw materials supply,
manufacturing processes and logistics), not only to optimize costs
but also to create a lever for value creation and differentiate Danone
from the competition.
Thus one key stream of the transformational “Danone 2020” plan
is a new approach for managing strategic resources (milk, water
and plastic). For Danone, these resources are essential not just
from an economic standpoint but also an environmental and social
standpoint. Danone's key rawmaterials come fromnature andmust
therefore be protected by creating shared value for ecosystems and
communities where Danone operates. These resources are there-
fore managed as cycles in order to ensure their long-term viability,
limit their volatility and, lastly, gain a true competitive advantage.
•
in the milk industry, the Company is working closely with lo-
cal producers to improve animal husbandry practices in both
developed and emerging countries. Collection entities and
cooperatives open to small producers were created in several
countries (Egypt, Indonesia, India, Mexico, Turkey, Ukraine, etc.)
in order to help members manage their farms, optimize their
purchases, improve the herd's feed or get veterinary treatment;
•
in the area of water, Danone has made commitments to protect
resources, particularly where they are scarce, and uses water
in harmony with local ecosystems and communities. By 2020,
Danone plans to deploy a new tool for measuring its water
footprint in all its subsidiaries. The Company is also committed
to reducing water consumption in its factories by 20% between
2010 and 2020;
•
in the area of plastics, Danone is striving to reduce its weight and
excess packaging and to use recycled materials. In that regard,
Danone contributes to the development of recycling channels
for its packaging in many countries.