Strategic axes and organisation for sustainable performance
Strategic axes and organisation for sustainable performance Emmanuel Faber
3 out of 10 major public health issues WW are food related Obesity
Undernutrition
Diabetes
830 million 1.6 billion
in the developing world
adults overweight
23 million
400 million
171 million
in the transition world
people obese
adults worldwide
9 million
x2 in 2015
x2 in 2030
in the industrial world
–2–
Since 1996 & more than ever
Our Danone Mission is a business accelerator and a differenciator
“Bring Health through food…” 38 millions portions of tasty fresh dairy products with a healhty nutritional profile delivered each day
25 millions of portions of water (2L) delivered each day 55% of innovations with a high nutritional profile 99% of products providing nutritional labelling More than 1,000 external reputed scientists acting as advisors
240 millions people reached by programs promoting healthy lifestyles
–4–
“…to a maximum number of people”
Danone world penetration
4.7 billion people
100 million additional Danone consumers 2009 vs 2008 –5–
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
–6–
Sustainability
Connect & dialog approach
Organisation & People
1. Health & Nutrition relevance By identifying & answering local health issues
NUTRIPLANET
NUTRIPLANET Danone tool to identify Health & Nutrition issue –7–
1. Health & Nutrition relevance By identifying & answering local health issues
33 countries covered by NUTRIPLANET –8–
1. Health & Nutrition relevance By identifying & answering local health issues
Leading scientists Health & education authorities
91% water reco by HCP 89% Aqua reco
HCPS 1200 HCP 7 KOL
Consumers 40 Media with coverage
46% Indonesian population DESHYDRATED
–9–
1. Health & Nutrition relevance By improving our nutritional composition
In 2010:
79% of products evaluated Dairy
1,470 SKUs 2,000 competitors
Baby
2,060 SKUs
Waters 45 SKUs
953 competitors 414 competitors
Danone nutrition enhancement program
– 10 –
1. Health & Nutrition relevance By improving our nutritional composition
Danonino Germany recognised by the German Child Association as part of a healthy snack for children.
Continuous improvement of Danonino formula, step by step – 11 –
1. Health & Nutrition relevance By targeting all levels of the pyramid
In collaboration with:
Nutritional Education Program for 37,000 Mothers
Gizikita: Adapted nutrition for low income mums, babies & toddlers – 12 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 13 –
Sustainability
Connect & dialog approach
Organisation & People
2. Breakthrough models for profitable growth Impossible equation in an inflationnary context? PROFITABILITY
Nutrition relevant benefit
Affordable for all customers
Tasty products
Reaching all levels of the pyramid
Need for breakthrough models
– 14 –
2. Breakthrough models for profitable growth Breakthrough formulas Local ingredients
Other products form
Up to -50% formula costs savings
New Packaging Milk substitutes – 15 –
Milk cracking
2. Breakthrough models for profitable growth Breakthrough operating models Direct distribution
Micro plants
Lower industrial & logistics costs Lower CAPEX
Long-term partneurship with farmers – 16 –
Dairy farms
Logistics partneurship
2. Breakthrough models for profitable growth Breakthrough formulas & operating models Origin of the project – Mme Diallo Diokh Co-development with Danone R&D: local processes and cultural cooking ingredients
Co-building: NGOs - ENDA, GRET + Danone Communities + KOLs Education program in Dakar schools Local ingredients
Other products form
Fortified Formula
Direct distribution
Lemateki formula
New Packaging
Milk substitutes
Micro plants Milk cracking
Lemateki operating model
Long-term partneurship with farmers
Dairy farms
Lemateki: affordable delicious nutritive paste For kids 6-12 yo in Dakar (Senegal) – 17 –
Logistics partneurship: ladies
2. Breakthrough models for profitable growth
From Engine of profitable growth in emerging markets Breakthrough models
– 18 –
To Engine of sustained productivities & innovations in mature markets
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 19 –
Sustainability
Connect & dialog approach
Organisation & People
3. Sustainability A raising demand & concern for consumers Expectations in companies’ responsabilities
Environment Most important national issues in China, India Russia
Healthy, safe
Importance
Product
Useful pd
Fair price quality Committed Listens
Nature
employment
Social
benefit economy
Water
Community Charities C02Pack recycling Local Supplier Objectives range
Employee training
Workplace Fair pay
Governance transparent & Ethics 3,8
5,4
Performance
Danone World 2010
Social & Nature: key concerns WW for consumers Source: 2010 Havas sustainable Future 2010, countries: Brasil, France, Spain, Mexico, UK, US – 20 –
3. Sustainability through Ecosystem The Business ecosystem MASS RETAIL
Target SHAREHOLDERS
Other Suppliers Distributors
CONSUMERS
Milk Producers/ Farmers Subcontractors
DANONE
Territories & Local authorities
UNIONS/ EMPLOYEES
Transports & Logistics
KOL/MEDIA
All stakeholders whose activities are impacted by Danone and who act closely with its local subsidiaries from an economic, social and territorial point of view – 21 –
3. Sustainability through Ecosystem Danone France: building consumer preference via Upstream strategy
– 22 –
3. Sustainability through Nature A strong Danone ambition on Nature CO2 kg/tn at constant volumes
-30%
7.4
5.2 -22%
2008
R 2010
On Direct Danone Responsability that counts for 45% of our total emissions: • Factory • Packaging • Transportation
2012
- 30% CO2/kg 2008 - 2012 – 23 –
3. Sustainability through Nature Danone commitments since 2000 Precise objectives to reduce natural resources consumption on a 10-year horizon were established by Danone Executive Committee in 2000 Energy 20% consumption reduction
Global thermal energy consumption
Surpassed: -45% Global consumption of water
Total global energy consumption
Surpassed: -45% Waste recovery
Water 30% consumption reduction
Waste recovered
80% Surpassed: -35%
– 24 –
Surpassed: 86%
3. Sustainability through Nature Nature as Business opportunity Green packs in Waters and Dairy:
Volvic Goes Green After Launch of Volvic 50 CL in oct. 2010 20% 2nd of vegetal generation/ origin sugarcane
-40% CO2 impact
Launch 1.5L april 2011 The first Vegetal bottle ever
– 25 –
3. Sustainability through Nature Nature as Business opportunity Green packs in Waters and Dairy:
Actimel Goes Green
Launch April 2011 1st 95% generation/ -17% CO2 of vegetal sugarcane impact origin Ethanol based
– 26 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 27 –
Sustainability
Connect & dialog approach
Organisation & People
4. Connect & dialog approach The social media revolution: a sociological shift
Participation Engagement
Respect
+500 mln people in Facebook
Transparency & information
Belonging Empathy
4th country in the world 75% of people feel that companies don’t tell the truth 78% people trust peer recommandations 14% brand recommandations – 28 –
4. Connect & dialog approach Opportunity to boost dialogue & co-building approach A M U LT I - S TA K E H O L D E R S A P P R O A C H Key opinion leaders
Prescribers & influencers
– 29 –
Consumers
Danoners
4. Connect & dialog approach Co-building with KOL for business impact Mum, Dad I prefer water “educational campaign” in Poland
Water and Hydratation Educational kit for schools Increase Category penetration: +1pt
Only 8% kids drink water Ministry of Health Food & Nourishment Institute Mother&Child Institute
– 30 –
360 Brand activation
4. Connect & dialog approach Dialog with consumers for transparency and reputation
– 31 –
4. Connect & dialog approach “Milk of our farmers” campaign
5 Régions
34% advertising
10% content production
56% Buzz
147 mln contacts
43 mln contacts
239 mln contacts
Bought
Owned
Earned
– 32 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 33 –
Sustainability
Connect & dialog approach
Organisation & People
5. Organisation & People Gouvernance: The Board of Directors and its Committees
BOARD OF DIRECTORS
14 members/8 independent
Audit Committee
3 members / 3 independent
=> Financial statements and performance
– 34 – – 34 –
Nomination & Compensation Committee 3 members / 2 independent => Corporate Governance issues and Top Management rewarding system
Social Responsibility Committee
4 members / 3 independent
=> Social and Environmental matters
5. Organisation & People Our HR schemes to build commitment 1,400 Top executives ANNUAL BONUS SCHEME
1/3
Financial objectives
1/3
Social & Environmental objectives
1/3
Business & Management drivers
eg: EBIT objective = CO2 reduction objective = 11% target Bonus
– 35 –
5. Organisation & People A top level of engagement
87%
The highest ENGAGEMENT score of danoners in history and superior to the most performing companies ever Danone overall 2009 (55,415)
Favorable SCORES
ENGAGEMENT
87
1
86
SAFETY MY JOB
84
CSR & ENVIRONMENT
81
GREAT PLACE TO GROW
76
LEARNING & DEVELOPMENT
73
IMMEDIATE MANAGEMENT
72
– 36 –
TW Global FMCG Norm 4
1
4
-5
3
0
4 0 3 2 5
2
TW Global HP Norm
1
0
4
-1
3
-3
3
n/a
3 out of 10 major public health issues WW are food related Obesity
Undernutrition
Diabetes
830 million 1.6 billion
in the developing world
adults overweight
23 million
400 million
171 million
in the transition world
people obese
adults worldwide
9 million
x2 in 2015
x2 in 2030
in the industrial world
–2–
Since 1996 & more than ever
Our Danone Mission is a business accelerator and a differenciator
“Bring Health through food…” 38 millions portions of tasty fresh dairy products with a healhty nutritional profile delivered each day
25 millions of portions of water (2L) delivered each day 55% of innovations with a high nutritional profile 99% of products providing nutritional labelling More than 1,000 external reputed scientists acting as advisors
240 millions people reached by programs promoting healthy lifestyles
–4–
“…to a maximum number of people”
Danone world penetration
4.7 billion people
100 million additional Danone consumers 2009 vs 2008 –5–
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
–6–
Sustainability
Connect & dialog approach
Organisation & People
1. Health & Nutrition relevance By identifying & answering local health issues
NUTRIPLANET
NUTRIPLANET Danone tool to identify Health & Nutrition issue –7–
1. Health & Nutrition relevance By identifying & answering local health issues
33 countries covered by NUTRIPLANET –8–
1. Health & Nutrition relevance By identifying & answering local health issues
Leading scientists Health & education authorities
91% water reco by HCP 89% Aqua reco
HCPS 1200 HCP 7 KOL
Consumers 40 Media with coverage
46% Indonesian population DESHYDRATED
–9–
1. Health & Nutrition relevance By improving our nutritional composition
In 2010:
79% of products evaluated Dairy
1,470 SKUs 2,000 competitors
Baby
2,060 SKUs
Waters 45 SKUs
953 competitors 414 competitors
Danone nutrition enhancement program
– 10 –
1. Health & Nutrition relevance By improving our nutritional composition
Danonino Germany recognised by the German Child Association as part of a healthy snack for children.
Continuous improvement of Danonino formula, step by step – 11 –
1. Health & Nutrition relevance By targeting all levels of the pyramid
In collaboration with:
Nutritional Education Program for 37,000 Mothers
Gizikita: Adapted nutrition for low income mums, babies & toddlers – 12 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 13 –
Sustainability
Connect & dialog approach
Organisation & People
2. Breakthrough models for profitable growth Impossible equation in an inflationnary context? PROFITABILITY
Nutrition relevant benefit
Affordable for all customers
Tasty products
Reaching all levels of the pyramid
Need for breakthrough models
– 14 –
2. Breakthrough models for profitable growth Breakthrough formulas Local ingredients
Other products form
Up to -50% formula costs savings
New Packaging Milk substitutes – 15 –
Milk cracking
2. Breakthrough models for profitable growth Breakthrough operating models Direct distribution
Micro plants
Lower industrial & logistics costs Lower CAPEX
Long-term partneurship with farmers – 16 –
Dairy farms
Logistics partneurship
2. Breakthrough models for profitable growth Breakthrough formulas & operating models Origin of the project – Mme Diallo Diokh Co-development with Danone R&D: local processes and cultural cooking ingredients
Co-building: NGOs - ENDA, GRET + Danone Communities + KOLs Education program in Dakar schools Local ingredients
Other products form
Fortified Formula
Direct distribution
Lemateki formula
New Packaging
Milk substitutes
Micro plants Milk cracking
Lemateki operating model
Long-term partneurship with farmers
Dairy farms
Lemateki: affordable delicious nutritive paste For kids 6-12 yo in Dakar (Senegal) – 17 –
Logistics partneurship: ladies
2. Breakthrough models for profitable growth
From Engine of profitable growth in emerging markets Breakthrough models
– 18 –
To Engine of sustained productivities & innovations in mature markets
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 19 –
Sustainability
Connect & dialog approach
Organisation & People
3. Sustainability A raising demand & concern for consumers Expectations in companies’ responsabilities
Environment Most important national issues in China, India Russia
Healthy, safe
Importance
Product
Useful pd
Fair price quality Committed Listens
Nature
employment
Social
benefit economy
Water
Community Charities C02Pack recycling Local Supplier Objectives range
Employee training
Workplace Fair pay
Governance transparent & Ethics 3,8
5,4
Performance
Danone World 2010
Social & Nature: key concerns WW for consumers Source: 2010 Havas sustainable Future 2010, countries: Brasil, France, Spain, Mexico, UK, US – 20 –
3. Sustainability through Ecosystem The Business ecosystem MASS RETAIL
Target SHAREHOLDERS
Other Suppliers Distributors
CONSUMERS
Milk Producers/ Farmers Subcontractors
DANONE
Territories & Local authorities
UNIONS/ EMPLOYEES
Transports & Logistics
KOL/MEDIA
All stakeholders whose activities are impacted by Danone and who act closely with its local subsidiaries from an economic, social and territorial point of view – 21 –
3. Sustainability through Ecosystem Danone France: building consumer preference via Upstream strategy
– 22 –
3. Sustainability through Nature A strong Danone ambition on Nature CO2 kg/tn at constant volumes
-30%
7.4
5.2 -22%
2008
R 2010
On Direct Danone Responsability that counts for 45% of our total emissions: • Factory • Packaging • Transportation
2012
- 30% CO2/kg 2008 - 2012 – 23 –
3. Sustainability through Nature Danone commitments since 2000 Precise objectives to reduce natural resources consumption on a 10-year horizon were established by Danone Executive Committee in 2000 Energy 20% consumption reduction
Global thermal energy consumption
Surpassed: -45% Global consumption of water
Total global energy consumption
Surpassed: -45% Waste recovery
Water 30% consumption reduction
Waste recovered
80% Surpassed: -35%
– 24 –
Surpassed: 86%
3. Sustainability through Nature Nature as Business opportunity Green packs in Waters and Dairy:
Volvic Goes Green After Launch of Volvic 50 CL in oct. 2010 20% 2nd of vegetal generation/ origin sugarcane
-40% CO2 impact
Launch 1.5L april 2011 The first Vegetal bottle ever
– 25 –
3. Sustainability through Nature Nature as Business opportunity Green packs in Waters and Dairy:
Actimel Goes Green
Launch April 2011 1st 95% generation/ -17% CO2 of vegetal sugarcane impact origin Ethanol based
– 26 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 27 –
Sustainability
Connect & dialog approach
Organisation & People
4. Connect & dialog approach The social media revolution: a sociological shift
Participation Engagement
Respect
+500 mln people in Facebook
Transparency & information
Belonging Empathy
4th country in the world 75% of people feel that companies don’t tell the truth 78% people trust peer recommandations 14% brand recommandations – 28 –
4. Connect & dialog approach Opportunity to boost dialogue & co-building approach A M U LT I - S TA K E H O L D E R S A P P R O A C H Key opinion leaders
Prescribers & influencers
– 29 –
Consumers
Danoners
4. Connect & dialog approach Co-building with KOL for business impact Mum, Dad I prefer water “educational campaign” in Poland
Water and Hydratation Educational kit for schools Increase Category penetration: +1pt
Only 8% kids drink water Ministry of Health Food & Nourishment Institute Mother&Child Institute
– 30 –
360 Brand activation
4. Connect & dialog approach Dialog with consumers for transparency and reputation
– 31 –
4. Connect & dialog approach “Milk of our farmers” campaign
5 Régions
34% advertising
10% content production
56% Buzz
147 mln contacts
43 mln contacts
239 mln contacts
Bought
Owned
Earned
– 32 –
How to accelerate “Danone mission” business opportunity? Axes for sustainable performance
12345 Health & Nutrition relevance
Breakthrough models for profitable growth
– 33 –
Sustainability
Connect & dialog approach
Organisation & People
5. Organisation & People Gouvernance: The Board of Directors and its Committees
BOARD OF DIRECTORS
14 members/8 independent
Audit Committee
3 members / 3 independent
=> Financial statements and performance
– 34 – – 34 –
Nomination & Compensation Committee 3 members / 2 independent => Corporate Governance issues and Top Management rewarding system
Social Responsibility Committee
4 members / 3 independent
=> Social and Environmental matters
5. Organisation & People Our HR schemes to build commitment 1,400 Top executives ANNUAL BONUS SCHEME
1/3
Financial objectives
1/3
Social & Environmental objectives
1/3
Business & Management drivers
eg: EBIT objective = CO2 reduction objective = 11% target Bonus
– 35 –
5. Organisation & People A top level of engagement
87%
The highest ENGAGEMENT score of danoners in history and superior to the most performing companies ever Danone overall 2009 (55,415)
Favorable SCORES
ENGAGEMENT
87
1
86
SAFETY MY JOB
84
CSR & ENVIRONMENT
81
GREAT PLACE TO GROW
76
LEARNING & DEVELOPMENT
73
IMMEDIATE MANAGEMENT
72
– 36 –
TW Global FMCG Norm 4
1
4
-5
3
0
4 0 3 2 5
2
TW Global HP Norm
1
0
4
-1
3
-3
3
n/a
