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Change, Collective intelligence, Strategy, Interview

2 December 2019

Interview

Danone: creating value without losing sight of the bigger picture

Éric Soubeiran was attracted by Danone’s combined economic and social mission nine years ago. “Danone’s goal is to create sustainable value and share it with everyone,” begins Éric. “In other words, to find value creation mechanisms that integrate the common good and preserve the planet’s resources.”

[highlight_box title=”Biography” text=”After six years with the Rexam Group, Éric Soubeiran joined Danone in 2010 to launch a “bottom of the pyramid” activity in India, offering high-nutrition yogurt for children. Éric was then appointed head of brand strategy for Activia and Taillefine in France, before becoming director of the company’s milk supply in Europe. For the past year, he has been vice-president for nature and director of the Danone Ecosystem Fund.” ” img=”https://business-digest.eu:443/wp-content/uploads/2019/11/BD301012.jpg”]

What is the core idea behind the mission? It’s that the economic system can and must serve the interests of as many people as possible. “Profit cannot be the only criterion for assessing the performance of companies. Companies must work to define their purpose.” That work involves nurturing a solid, long-term vision.

Draw up a concrete, sustainable strategy

As vice-president for nature, Éric has helped define the company’s sustainable strategy based on four pillars: the fight against global warming; sustainable agriculture; the circular economy; and the protection of water resources. To put this vision into practice, says Éric, “you first have to ensure that the objectives that have been set are consistent with the company’s available tools.” Danone’s purchases represent between 14 and 16 billion euros every year, meaning that “it’s upstream, in our relations with the farmers and our suppliers, that we can have the biggest impact. Over the past four years, we have reviewed our activities based on our strategic sourcing cycles [milk, water, and packaging]. We manage each resource in a circular, 360° way.” Another key element in implementing this type of strategy is that “its objectives must be fully integrated into the company’s system of governance. At Danone, they are discussed in a strategic planning cycle before being conveyed to the board of directors. Our managers are assessed on criteria such as carbon footprint and social impact.”

Factor in all the links in the chain

In 2012 and 2013, the milk market—whose volumes and prices had previously been tightly controlled —was liberalized, leading to a crisis. Milk payment methods were disputed. Danone revised its practices, deciding to pay dairy producers based on production costs. In addition, a margin was negotiatedto stabilize their income. “We were then able to discuss their production conditions with them, recommending that they grow soy instead of importing it, for instance, or changing the rotation of their crops.”This approachmade it possible to rethink the entire productionchain, from the supply of animal feed to environmental impact topurchasing. In terms of packaging, Danone is working with other companies in the agri-food sector to set up a bottle deposit and recycling system.

Excerpt from Business Digest N°301, November 2019

Tagged with: Danone, strategy, interview, collective, union, long term, préservation, consumption, Eric Soubeiran, transparence, expérience, change

Published by Françoise Tollet

She spent 12 years in industry, working for Bolloré Technologies, among others. She co-founded Business Digest in 1992 and has been running the company since 1998. And she took the Internet plunge in 1996, even before coming on board as part of the BD team. 