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Overview of activities, risk factors

2.5 Other elements related to Danone's activity and organization

DANONE

REGISTRATION DOCUMENT 2015

19

Research and Development

Presentation of Danone's Research and

Development

Research and Development plays a central role in the implementation

of Danone's growth strategy. Danone believes that food can play an

essential role in addressing health challenges.

The Research and Development strategy focuses on four main

innovation areas:

•

progress: building bridges between science and food to contribute

to the health of people of all ages, from the youngest to the oldest;

•

reliability: committing to the nutritional quality of the products

and managing natural resources sustainably;

•

cultures: staying connected to eating practices, integrating

cultural differences and local needs and encouraging healthier

dietary practices within communities;

•

well-being: promoting Danone's product categories to support

daily health and well-being for all. Danone therefore conducts

nutrition research, educates and trains health professionals on

diet-related matters and contributes toward improved dietary

practices for the consumers through educational and informa-

tional campaigns.

The R&D strategy is based on a unique approach to nutrition. This

approach involves stakeholders who are concerned by the public

health challenges in the countries where Danone operates.

Research and Development organization

The Research andDevelopment function at DanoneNutricia Research

has approximately 1,500 employees spread in the following locations:

•

two international research centers: Danone Research Centre

Daniel Carasso (Palaiseau, France) and Nutricia Research

(Utrecht, the Netherlands);

•

five specialized centers:

• Danone Research Packaging in Evian, France,

• Nutricia Research Singapore, in Singapore,

• Danone Research Fresh Dairy Technological Expertise, in

Madrid, Spain,

• Danone Research Fresh Dairy Technological Expertise, in

Chekhov, Russia,

• Dumex Research, in Shanghai, China.

•

local teams in 55 Danone subsidiaries.

Scientific collaborations

In their research, the Research and Development teams regularly

work with external partners such as universities and public research

centers. For example:

•

Danone benefits from the expertise of external scientific com-

mittees on strategic topics such as cultures, including ones with

probiotic potential, or water;

•

Danone maintains permanent contact with the scientific com-

munity to better understand health and nutrition issues. This

collaborative scientific approach allows us to the pooling of

investments, resources and skills. This ongoing dialogue with

scientists and researcher's supports two of the commitments

made by Danone in its Food Nutrition Health Charter. This Charter

formalizes Danone's strategy in the nutrition and health area and

is consistent with the main orientations set by health authorities

in many countries;

•

as part of its contribution to nutrition research, Danone created

the Danone Institutes (non-profit entities) to help strengthen the

understanding of the links between food, nutrition and health.

As of end-2015, 16 Danone institutes are established worldwide.

Their initiatives cover everything from support for scientific

research to information and training for health professionals,

to educational programs for children and the general public.

Danone's Research and Development innovation

areas

Danone determines its Research and Development areas in accor-

dance with the Company's strategy based on four innovation areas:

Progress: bridging life science and nutrition

This innovation field consists of building bridges between science

and nutrition in order to develop food that strengthens the health

potential of each individual, from the youngest to the eldest.

To that end, Danone has developed scientific expertise in selecting

and characterizing lactic acid bacteria as well as understanding the

way these bacteria (known as probiotics) can benefit human health.

In recent years Danone has therefore developed substantial knowl-

edge of the various genomic, molecular, cellular, physiological and

functional elements that form the basis for this link between the

microbiota, the immune system, intestinal walls and their overall

contribution to health.

To develop fermented dairy products that have an impact on the

human body's balance and homeostasis, Danone uses various ap-

proaches, including applying its extensive collection of lactic acid

bacteria and selecting the top-performing ones depending on the

desired physiological and clinical effects.

For all the work in these areas, the Research and Development

teams use the latest techniques in genomics, cellular and mo-

lecular biology, cytometry and robotics. They design and set up

clinical studies based on international standards and utilize the

latest statistical analysis methods. They also collaborate with other

internationally-recognized, high-level scientific partners such as

INRA (French National Institute for Agricultural Research) in Paris,

Harvard Medical School in Boston (United States), the

Institut

Pasteur

(Pasteur Institute) in Paris and University College of Cork

in Ireland. Furthermore, to further develop these research areas,

Danone sponsors conferences with these institutions in order to

share the latest findings to the international scientific community.