How Danone combines business and social

Replanting mangroves in Senegal, helping scavengers to organize themselves in a cooperative in Indonesia, building water treatment stations in remote villages in Cambodia, India and Madagascar… So many projects that Danone has carried out in name over several years, the group explains, from a certain idea of ​​”social responsibility”. Another multinational buying a good conscience? Maybe. Nevertheless, the system initiated by the group in 2006 is unique in form and size. The world’s No. 1 in yogurt now has about sixty “hybrid” projects, combining the economic and the social through three mediums: Danone Communities, Danone Ecosystem and Livelihoods.

“They were forerunners and are among the French companies that have gone the furthest in the field,” said Antoine Colonna d’Istria, co-founder of Pro Bono Lab, an association specializing in volunteering and skills sponsorship. Let’s not be naive. Danone’s main goal remains to sell masses of yogurt all over the world; the multinational makes no secret of it. The idea is roughly that the more the locals get richer, the more their purchasing power will grow, the more customers Danone will have. Logic.

A Riboud tradition. To understand the group’s involvement in ‘social business’, you have to go back forty years. “It all started with Antoine Riboud’s speech in Marseille, in October 1972, at the Assises of the CNPF, the ancestor of the Medef,” said Laurent Sacchi, Managing Director of the Presidency. For the very first time, the founder of Danone, who is still called BSN, evokes the idea of ​​a dual economic and social project. “We must strive to reduce excessive inequalities in living and working conditions and to respond to the deep aspirations of mankind,” Riboud hammered in front of a stunned audience, a thousand miles away from this kind of reflection. And this boss doesn’t stop at letters of intent. In the mid-1970s, he set up the Clean Holidays program to combat litter on the beaches, installing the famous white and red trash cans, which still exist today. “A project that will lead in particular to the creation of Eco-Emballages, the body responsible for recycling household packaging,” says Laurent Sacchi.

The Yunus shock. But with the arrival of Franck Riboud at the head of Danone in 1996, the father’s double project disappeared from the discourse. The social fiber even seems well buried with the announcement, in 2001, of a social plan that provides for the redundancy of 800 French employees of Lu. Back then, for Danone’s new boss, employment was not the company’s problem, but the government’s. Then, in 2005, our man crossed paths with Muhammad Yunus, the “banker of the poor”, inventor of microcredit. For Franck Riboud it is a real blow.

The two men set up a joint venture with a social vocation, Grameen Danone Foods, which led to the creation of a vitamin-enriched yogurt factory, Shokti Doi, which was sold at low prices to the poorest. It’s a success. In addition, the group opened an investment fund (Danone Communities), now endowed with 73 million euros, to finance social entrepreneurship projects related to food and drinking water. By purchasing Sicav Communities, individuals (particularly group employees) can invest their money alongside Danone, a 20 million euro contributor.

Balance. Today, this fund finances ten projects around the world, mainly in the world’s poorest countries. “Four of them have already reached or are about to break even, and it is estimated that more than a million people have benefited from our programs,” said Emmanuel Marchant, CEO of Danone.Communities. But this fund is only the first stage of Danone’s social responsibility rocket. In 2009, the group launched Ecosystem, in consultation with its shareholders, which constituted a 100 million euro grant to carry out projects in areas where the agri-food giant already has a commercial presence (unlike Danone Communities). “We were therefore convinced that the crisis would affect our partners, especially agricultural partners,” explains Jean-Christophe Laugee, CEO of the fund. But when a country does poorly, employment declines, as does consumption. It can affect us.”

The ecosystem of the group. The aim is to improve the economic and social environment of Danone, its ecosystem: breeders, farmers, subcontractors, employees and even consumers. How ? By supporting smallholder cooperatives to secure milk supplies; train suppliers to improve product quality; by creating recycling centers so that scavengers increase their income (in fact, when plastic is sorted, washed, crushed and baled, it is sold for 35% more); finally by developing employment, especially for women. Today, a third of the projects financed by this Danone ecosystem fund are in balance. In four years, 19,000 jobs have been created. The latest, Livelihoods, opened in 2011, is a fund that finances environmental projects in Senegal, Indonesia and India. A carbon offset program that Schneider, La Poste, Crédit Agricole have already joined… increasing their financial strength accordingly.

Internal pride. This global approach also serves Danone’s HR policy. Even if few employees actually participate in the projects (about 1% of the 102,000 employees worldwide), there is a “positive contagion” effect. If we know that the commercial director of Danone Belgium spent six months in Senegal to help a dairy in structuring its sales team, that the director Asia water marketing also (40% of his time) project manager generates Danone Communities in India and Cambodia a sense of pride, which is quite unusual in a multinational company. “More than 85% of our employees agree with the company’s values, which place us in the top 5 globally,” assures one at headquarters. Although Danone refuses to organize large crowds on these projects, the company regularly raises the subject and each subsidiary informs its teams of the ongoing actions via a newsletter. These programs also give Danone an advantage in recruiting both young graduates and experienced executives. “Many admit this tip the scales when applying for a job,” explains Jean-Christophe Laugee.

Suggestions boxes. Finally, the three funds Danone put into orbit serve as a laboratory. The Indian team preparing for the opening of the local subsidiary in 2010 was therefore inspired by what Grameen Danone Foods had achieved in Bangladesh, in terms of plant size, product size, marketing and distribution. In 2012, it was Evian who came up with the idea of ​​delivering cartons of water to homes in France, after studying a door-to-door yogurt sales program that was conceived… in Mexico.

Emmanuel Botta and Caroline Montaigne

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