Danone … One Planet. One Health … as a B Corporation … serving a food revolution by 2030 … with Manifesto Brands
March 19, 2018
Danone, One Planet. One Health
In 2017, Danone unveiled a refreshed logo and its very first company signature: One Planet. One Health. These words reflect our vision that the health of people and the health of the planet are interconnected. It is a call to action for all consumers and everyone who has a stake in food to join the food revolution: a movement aimed at nurturing the adoption of healthier, more sustainable eating and drinking habits.
RECONNECTING PEOPLE WITH THE FOOD THEY EAT
“ CONSUMERS ARE CRAVING CHANGE. THEY EXPECT LARGE ORGANIZATIONS LIKE DANONE TO BRING OUR SCALE OF IMPACT TO CHANGE THE WORLD FOR THE BETTER.”
At Danone, we believe that each time we eat and drink, we can vote for the world we want to live in. This powerful idea is at the heart of the ongoing food revolution, a movement inspired by people who care about where their food comes from, how it was grown, how it arrived on their plates and how it impacts their health and the health of the planet. We call those people the food generation.
At Danone, we believe that global food and retail companies can play an important role in this revolution through a transformation of their business models, moving away from standardized food systems to new models based on local diets and leveraging local sourcing. We believe a healthy body needs healthy food. And healthy food needs a healthy planet. All with healthy ecosystems and strong, resilient social structures. We believe in a food and water ecosystem that works in harmony with people, communities and the environment. Our dream is to make the Danone logo a symbol of positive change to build a healthier world through food. With our company brand idea, we can bring together our mission, values, brands and social initiatives.
The Danone company brand will allow us to demonstrate our uniqueness into a driver of growth and add extra equity to our brands, to build consumer trust.
“ONE PLANET. ONE HEALTH IS A RALLYING CALL TO EVERYONE TO JOIN THE FOOD REVOLUTION. AND WE AIM TO MAKE THAT REVOLUTION A REALITY FOR AS MANY PEOPLE AS POSSIBLE, ACROSS THE WORLD.”
Build a balanced model of Growth
Danone has set its goal to build a balanced, profitable and sustainable growth model.
Growth, at the core of the business model
Positioned in the most dynamic categories of the food and beverage industry, Danone has a strong leadership position in all its markets.
The Company relies on a unique portfolio of strong brands, solid execution capabilities in terms of innovation, brand activation and the development of new distribution channels.
Generating profitable growth
In an increasingly volatile and complex environment, Danone strives to strengthen its model of growth through disciplined resource allocation, efficiency gains and cost optimization with a permanent balance in managing the short, mid and long-term horizons.
The company therefore favors strategic growth opportunities that create long-term value over tactical short-term allocations.
Launch of an efficiency program: generate cost savings to fuel growth
In that context, Danone launched an efficiency program called Protein on its selling, general and administrative expenses. The program aims to strengthen the Company’s competitiveness by generating cost savings of €1 billion by 2020. The program consists of incorporating sustainable efficiency into the Company’s business model, and creating the best conditions to spend better, buy better and work more efficiently. Danone will reinvest a significant portion of the gains in growth to support the implementation of its strategy and mission.
Responsible business stewardship: continuing the dual economic and social project with B Corp
Collaboration with the international non-profit organization B Lab to receive B Corp certification represents a major new milestone in Danone’s dual economic and social project, first expressed by Antoine RIBOUD in his 1972 speech in Marseille.
As part of this approach, which creates value for consumers and shareholders, Danone is transforming the way in which the food and beverages of its flagship brands are designed and produced, notably by reducing the number of ingredients, and proposing new organic and non-GMO product lines. The Company also commits to promoting sustainable agriculture, encouraging the circular economy, conserving water, reducing waste, reducing its carbon footprint, promoting animal welfare and investing in the community.
A new approach to management of strategic resources
As a further example of its approach to act as an engaged and responsible company, Danone is transforming the upstream of its business (environmental management, raw materials supply and manufacturing processes and logistics) to optimize its costs, protect the lifecycles of its strategic resources and create a lever for value creation and differentiation from competition.
One of Danone’s key strategic orientations is therefore a new approach for managing its strategic resources (milk, water and plastic). These resources are essential for Danone, not just from an economic but also from an environmental and social standpoint. Danone’s key raw materials come from nature and must therefore be protected by creating and sharing value for ecosystems and communities where Danone operates. These resources are therefore managed as cycles in order to ensure their long-term viability, limit their volatility and, lastly, gain a true competitive advantage.
The Danone Story
It’s the story of the Carasso family who chooses to leave the war-torn Balkans, on the eve of the First World War, to settle in Spain, the land of their ancestors. In Barcelona, numerous children are suffering from intestinal problems. Isaac Carasso decides to innovate, and in 1919 he develops a healthy and simple product, still fairly unknown in Spain, yogurt. He calls it Danone, after the nickname of his only son, Daniel. It’s the story of Daniel, who leaves home at the age of 18. He continues his studies in Marseille, discovers France and secures an internship with the Institut Pasteur in Paris. Convinced that Danone can also meet the needs of the French, the young Daniel sets up in 1929 the “Société Parisienne du Yoghourt Danone” which for the first time in France, offers a yogurt made from pure, lactic ferments. It’s the story of an American dream. As WW2 rages across Europe, Daniel leaves occupied Paris and flourishing company to start from scratch in New York. Driven by his father’s pioneering spirit, he acquires an artisanal yogurt shop in the Bronx and sets up “Dannon Milk Products” in 1942. It’s the story of a return to Europe where everything must be rebuilt after the war. There, Daniel continues to pursue the dream he shares with his father: to meet people’s nutritional needs and to innovate for the health of everyone.
It’s the story of Isaac Carasso’s passion for the research of Professor Elie Metchnikoff. The Nobel prize-winner for medicine is convinced of the benefits of lactic bacteria for the intestinal flora. Drawing on his discoveries, Isaac mixes raw milk with pure lactic ferments from the Institut Pasteur to create Danone yogurt. It’s the story of a sketch that changes everything. Daniel Carasso, now living in the United States, meets Raymond Loewy, the famous French designer and graphic artist. Loewy, charmed by the drive of this young entrepreneur from Europe, advises him to americanize the name of his company and designs a new logo for the business. “Dannon Milk Products” is born. It’s the story of a genuine friendship and a shared ambition between Daniel Carasso and Antoine Riboud. The two entrepreneurs share the dream of creating a global brand. They merge their two businesses to create in 1973 the company that would become Danone 20 years later. Together, they expand to new territories: South America, Asia, Eastern Europe, and give a new dimension to the company.
It’s the story of a firm belief. Isaac Carasso, sure of having a unique, strong value-added product, decides to sell his yogurt in pharmacies in Barcelona. Recommended by doctors, as of 1923 it is recognized as a “healthy, natural product, beneficial for health”. It’s the story of an intuition. Daniel Carasso makes Danone yogurt a product of pleasure sold in dairy shops as of 1929. He adds fruit to it, explores new yogurt flavors, that he sells in the U.S. and then in Europe. It’s a huge success on both continents. It’s the story of a visionary speech in 1972. — Antoine Riboud — «It is not possible to accept that growth leaves so many people behind, especially workers. It is a matter of collective conscience.» In Marseille, Antoine Riboud lays the foundations of the “Dual Project” which is an essential part of Danone to this day. He advocates for business to be at the service of humanity, with a company whose mission is both economic and social. Because “Corporate responsibility does not end at the factory gate or the office door.” And because “There is only one Earth. We only live once”. It’s the story of a mission. Franck Riboud gives Danone a new dimension: “Bringing health through food to as many people as possible” with a company that constantly anticipates and innovates, to make its products accessible to everyone, on all continents. It’s the story of a world in which our health and that of our planet are interconnected One of the world leaders in food and beverages with a unique health-focused portfolio, present in over 120 countries, Danone and its 100,000 employees are today pioneering the food revolution with a clear and forward-looking vision: One Planet. One Health. — Emmanuel Faber —- When Daniel Carrasso meets Antoine Riboud, he says «we had a dream together». So vision is what starts everything at Danone. The vision on health by Isaac, the vision about brands by Daniel, the social and environmental vision of Antoine and then Franck reconciling both by choosing «health through food» for Danone and pushing into emerging countries to create a global company. So we are like 20 years later now. We have decided, facing the food revolution, to summarise this vision into 4 words : «One Planet. One Health». The health of the planet, the health of people are both interconnected, entirely. The most important part is the fact that beyond this vision, we need everyone at Danone to hold and be owner of that vision. People are now building the brands, not the contrary. And therefore the initiative that we have started, «One Person, One Voice, One Share» is fundamental to create a governance for the future of companies that, as Danone, will win through the food revolution in the future.
As part of its transformation plan aimed at ensuring a safe journey to deliver strong, profitable and sustainable growth, Danone set objectives for 2020 that include like-for-like sales growth between 4% and 5%, which include the following performances at the Reporting entity level:
• strong like-for-like growth above 5% for EDP Noram, Specialized Nutrition and Waters; and
• like-for-like growth of between 3% and 4% for EDP International.
Danone aims for a recurring operating margin of over 16% in 2020, driven primarily by:
• a structural improvement of margin in all categories, via more discipline and a stricter resource allocation process to guarantee profitable growth;
• the Protein program, which will generate over €1 billion savings by 2020, with at least €300 million net of reinvestment falling through into margin expansion by 2020 (€100 million per year from 2018);
• a $300 million synergies program generated in 2020 at recurring operating income level through the acquisition of WhiteWave.
Finally, Danone will continue to focus on growing its free cash flow, which will contribute to financial deleverage with an objective of a ratio of Net debt/EBITDA below 3x in 2020. Danone is committed to reaching a ROIC level around 12% in 2022.
Towards B-Corp certification
In this increasingly complex world, big brands and companies are fundamentally challenged as to whose interests they really serve. At Danone, we are convinced that addressing this issue in straight and simple terms is the best way for our brands and our company to reinforce trust with employees, consumers, partners, retailers, civil society and governments. That is why we joined the B CorpTMmovement.
Certified B Corporations are leaders of a global movement of people using business as a force for good. They meet the highest standards of overall social and environmental performance, transparency and accountability and aspire to use the power of business to solve social and environmental problems.
Our ambition to obtain this certification is an expression of our long-time commitment to sustainable business and to Danone’s dual project of economic success and social progress.
It is a significant step toward making sustainable business mainstream—and which we believe to be the future.
A rigorous B Corp™ Certification reflective of core commitments
B Corp Certification is a mark of trust: a promise that a company is doing business in a way that meets rigorous standards of social and environmental performance, transparency and accountability and is certified by B Lab, a third-party non-profit.
To obtain B Corp certification, a company must complete a B Impact Assessment and earn an audited minimum score of 80 out of 200 possible points and recertify – with the aim to continuously improve – every two years.
Since 2015, Danone has partnered with B Lab to help define a meaningful and manageable path to certification for multinationals and publicly traded companies, as well as accelerate growth of the B Corp movement into the mainstream.
17 certified entities
A total of seventeen Danone entities have now earned B Corp™ Certification, including dairy subsidiaries in France (Les Prés Rient Bio), in Spain, in the UK and in Ireland, plant-Based brand Alpro, organic baby food brand Happy Family in the U.S., Aguas Danone de Argentina, AQUA in Indonesia, Danone North America, Danone Canada, Danone Egypt, baby food brand Blédina in France, Nutricia Bagó in Argentina, Danone Manifesto Ventures, Grameen Danone Foods Ltd, Danone Waters of America, and Danone Waters Spain.
As a result, over 30% of Danone’s global sales are now covered by B Corp™ certification, marking significant progress towards Danone’s ambition to become one of the first certified multinationals.
What is B Corp™?
B Corp is a sustainable business certification launched in the U.S. in 2006 that has been gaining momentum around the world. In line with Danone’s vision, the B Corp movement works to drive a cultural shift to redefine business success. Today, there are more than 2,300 B Corps in 50 countries.
B Lab, a non-profit organization, accredits B Corp certification to for-profit companies that demonstrate high standards of social and environmental performance. Danone’s ambition is to be among the first food multinational companies to obtain a global certification. We are partnering with B Lab to build the roadmap toward this goal.
Danone Goals by 2030
SERVING A FOOD REVOLUTION BY 2030
We firmly believe that the health of people and planet are interconnected. Both need to be nourished and protected. At the same time, the world over, people are reinventing how to eat, drink and socialize over food.
In line with our ‘One Planet. One Health’ vision and to adequately respond to the challenges and opportunities of the ongoing food revolution, we have defined our Danone 2030 Goals.
The integrated set of 9 long-term goals embeds Danone’s business model, brand and trust models. The Danone 2030 Goals are aligned with the 2030 Sustainable Development Goals of the United Nations, thus adopting a language that is universally understood.
To learn more about how Danone contributes to the UN’s Sustainable Development Goals, click here.
OUR BUSINESS MODEL
We will grow as a B CorpTM, innovating to offer superior food experiences.
OFFER SUPERIOR FOOD EXPERIENCES AND INNOVATE, ALWAYS
We commit to the highest quality and food safety standards. We stand for sustainably sourced ingredients; for naturality and transparency; and for simple recipes and clean labels. Supported by strong innovation capabilities, we believe these are key fundamentals to create superior food experiences for people, as this will remain the first driver of healthier and more sustainable choices.
DELIVER SUPERIOR SUSTAINABLE PROFITABLE GROWTH
Our ambition is to be the best at embracing the food revolution. We build on a unique health-focused product offering in some of the fastest growing categories, responding to today’s and tomorrow’s eating and drinking trends. And we build on a strong strategic roadmap around three priorities: accelerate growth, maximize efficiencies and allocate resource with discipline.
BE CERTIFIED AS A B CORP
Our ambition to become a Certified B Corp expresses our long-term commitment to create and share sustainable value for all, in line with our dual economic and social agenda. In today’s world, big companies and their brands are fundamentally challenged as to whose interests they really serve. B Corp certification is a mark of trust for companies demonstrating high standards of social and environmental performance.
OUR BRAND MODEL
We will grow what we call Manifesto brands to protect and nourish both the health of the people and the health of the planet.
IMPACT PEOPLE’S HEALTH LOCALLY
Our mission is to bring health through food to as many people as possible. We have created a unique portfolio of healthy products to complete this mission, and we strive to continuously optimize their nutritional profile. Also, we build on our in-depth knowledge of local food cultures, food habits and public health challenges to innovate and actively promote healthier alternatives for better choices. Beyond products, we will accelerate on current and new initiatives (programs and services) with partners to impact dietary habits positively.
GROW MANIFESTO BRANDS
People are craving change when it comes to their food. At Danone, we believe that each time we eat and drink, we can vote for the world we want. That is why we aim to build purpose driven brands – what we call Manifesto brands – that will act as true activists towards their point of view, not only delivering an exciting experience to people, but also committing to create a positive impact on health and planet.
PRESERVE AND RENEW THE PLANET’S RESOURCES
We strive to be a game-changer to foster positive solutions for the planet. We commit to sustainable sourcing for all our ingredients and to enhance the circular economy of packaging. We will protect soil health through regenerative agricultural practices co-developed with partners and we will even amplify our ambitious water stewardship journey. We play our part in the fight against climate change by implementing carbon positive solutions and aiming to achieve carbon neutrality by 2050.
OUR TRUST MODEL
We will grow in an inclusive way, empowering our people and working with partners to create and share sustainable value.
ENTRUST DANONE’S PEOPLE TO CREATE NEW FUTURES
Building on our unique social innovation heritage, we will allow each of our employees to co-own our agenda and our Goals, both at global and local level. This will lead us into a new, healthy future for our company, our employees and for our communities.
FOSTER INCLUSIVE GROWTH
We will continue to invent pioneering ways to foster inclusive growth for vulnerable partners in our food chain across the world, including family farmers, street vendors and waste pickers. We will keep building sustainable solutions for access to nutrition and safe drinking water for low-income communities. And we will maximize the impact of our social innovation funds through scale and transformation of business practices starting with Danone Communities, the Danone Ecosystem Fund and the Livelihoods funds.
SERVE THE FOOD REVOLUTION WITH PARTNERS
A food revolution is happening and we choose to serve it. However we cannot do it alone: to change the way food is grown, produced, marketed, distributed, sold and consumed, we need to co-create solutions with others, leveraging their expertise. To do so, we are building on decades of partnership experience to work hand in hand with Danone employees, farmers, suppliers, retailers, consumers and partners as well as civil society, governments and public health professionals. Altogether, we want to be remembered as a driving force of the food generation.
“ONE PERSON, ONE VOICE, ONE SHARE”: INNOVATIVE GOVERNANCE & EMPLOYEE ENGAGEMENT MODEL
The realization of the goals will build on an innovative new governance framework which seeks to further foster company-wide engagement and action. This framework will give our more than 100,000 Danone employees the power to co-own our company agenda.
Participative ‘one person, one voice’ program to empower employees to co-own our company agenda
By the end of 2018, each of Danone’s 100,000 employees will have been invited to actively engage and participate in shaping the future towards the Danone 2030 Goals and implementing them to co-create new futures.
To uniquely equip them to do so, the ‘One Person, One Voice’ program will develop an internal platform with extensive sharing and learning resources related to the company vision and goals. This will include content derived from collaboration with like-minded partners such as the United Nations Institute for Training and Research (UNITAR). All Danone employees will have the opportunity to learn more, better understand and build on the issues, challenges and opportunities that come with the goals.
Even more, starting this year, they will give voice to their point of view on both our company agenda and the definition of the 2030 Goals roadmaps, at local and global level.
In the future, we intend to link our new participative employee governance model with our Board of Directors, to fully leverage the richness of its content and recognize its importance in the company’s governance.
‘One person, one share’: each employee to receive one Danone share to deepen the ownership mindset
Complementing ‘One Person, One Voice’, every Danone employee will participate in the ‘One Person, One Share’ program. By next year, each of our employees will be granted one Danone share, in combination with an annual, amplified dividend-based incentive scheme.
In addition, a mechanism similar to our current French employee company investment fund will be implemented globally over the next few years. This will provide employees a further opportunity to invest in the company at a discounted price and increase a sense of ownership.
Our Brand Model
Today, people want to have a vote in the world they live in. Each time they choose a brand they exercise their right to vote. They want that brand to be transparent, meaningful and responsible. Still, they also want the brands they choose to be playful, innovative, relatable, emotional and engaging. As a result, there is a new paradigm at play today: brands only exist through the power of people.
Danone’s brands are the means by which we engage in the food revolution. Some of them are called Manifesto brandsas they have a clear brand model that drives each of their action. Some of them are not yet Manifesto brands but we have the ambition to grow every Danone brand into a Manifesto brand.
To bring this ambition to life, we’ve defined the Manifesto brand model, which is a framework to define, position and activate our Manifesto brands.
This brand model has as its unique starting point the focus on people, identifying the tension between a relevant insight and confronting it to the reality in which we live. This makes it possible to identify the legitimacy of the brand to operate in this environment.
But it also takes the following to make up a Manifesto brand:
- a strong point of view and purpose that justify its existence in the world and relevancy for people,
- a commitment to help improve the health of people, as well as to help protect our planet.
With One Planet. One Health being the backbone of every Manifesto brand, we now have in our portfolio a wide variety of brands bringing this signature to life.
So far, the movement is well under way with 40 brands already engaged in their Manifesto journey.
Our ambition is that each Danone Brand will become a Manifesto Brand, powering the food revolution, and driving profitable, sustainable growth. This is how Danone’s brands will differ from others.
Working through our Ecosystem
At Danone, more than 100,000 people are united by a single mission: bringing health through food to as many people as possible. Across the world, our employees, whatever their role, are passionate and committed to leading the change to encourage more sustainable and healthier eating and drinking practices.
Food-related challenges are increasingly complex. To meet them, Danone is working with a wide range of partners, designing and deploying sustainable solutions with researchers, consumers, NGOs, health professionals, famers, suppliers, retailers and government agencies.
Strengthening and managing these diverse alliances has become a strategic necessity as well as a measure of our effectiveness and credibility.
When we build a more sustainable future together with our partners and entrepreneurs who share our vision, we put our belief in social progress and economic growth into action, creating value in local communities and centering the environment at the core of our business.
Discover some testimonials on our 2018 Integrated Annual Report.