dairy strategy - danone-danonecom...

Dairy Strategy

Jordi CONSTANS - Felix MARTIN

2009: Emphasis on volume and market share

-1.0%

2.7%

7.0%

Q1 09 Q2 09 Q3 09

Danone Dairy

Volume Evolution

2009: Accelerating volume growth in all geographies

-0.3%

4.9%

8.4%

Q1 09 Q2 09 Q3 09

-1.5%

1.1%

5.9%

Q1 09 Q2 09 Q3 09

Mature Countries

Volume Evolution

Developing Countries

Volume Evolution

Developing44%

Mature56%

2009: Accelerating volume growth in all brands

6.8%

10.2%

14.9%

Q1 09 Q2 09 Q3 09

-4.6% -2.1%

3.6%

Q1 09 Q2 09 Q3 09

Functional Brands

Volume Evolution

Nutritional Brands

Volume EvolutionNutritio

nal61%

Functional

39%

2009: Reinforcing our market share as a result

Source: MRCI *Last period 2009 vs same period 2008

65% of countries gaining

significant volume market

share*

Canada

+6.4pt

USA

+1.2pt

Mexico

+2.9pt

France

+1.3ptJapan

+2.2ptEgypt

+7.1pt

Chile

+5.5pt

Poland

+0.8pt

Germany

+1.1pt

UK

+1.4pt

China

+15.7pt

Hungary

+8.5pt

2009: 3 extra growth drivers

1. Vertical Innovation

2. Reset Program

3. New Geographies

1. Vertical Innovation

Danonino

Yoghurt:

20% of Danonino

volume in

Romania

Activia

Breakfast:

20% of Activia

volume in

Bulgaria

Danonino

Cereals:

15% of Danonino

volume in Russia

New Categories New Moments

Activia End of

Meal:

15% of Activia

volume in UK

2.1 Reset Program: Value for Money Management

USA

2008 2009

Premium index: 116 107

GRP: 23,500 26,000

Volume MS: 26.2 27.2

Poland

2008 2009


GRP: 60,000 77,000


Mexico

Q1 Q3


GRP: 23,000 27,000


Adjusting Price

& Balancing Mix

+

Increase GRP Pressure

=

Volume market share points

2.2 Reset Program: Activating Nutritional Brands

Nutrition 4 All Pleasure

Relaunch Danone Core Mexico:

27% of total country volume in

october & + 385% vs last year

Greek

Yoghurt:

4% of volume

Danone Spain

Indulgence

twin pot:

5-9% of country

volume when

launched

2.2 Reset Program:

Activating portfolio by price points

64 %

51 %

56 %

71 %

Market share CANN/kg

2,21 €/kg

1,38 €/kg

1,03 €/kg

2.3 Reset Program: More and closer consumer

investment

Activia Belly

dancing saga

Mimi Saga

Share Your Meal

Actimel

fortifying

Emotional Claim Web & Bloggers’

Communities

Indulgent brands Social Responsibility

Equity

Activia sales + 52%

CAGR on last 4 years

Activia brand

+55% in volume

in 2009

Actimel volume +31%

in October 2009

Danette: sales

+15% in 2009

2004-2009: 7 mln

meals given to

children in need

2.4 Reset Program: Build Superior Taste

Communicate tasteEnsure product superiority

Excellent

Daily

Superior

50%

superior

40%

parity

10%

inferior

COMMUNICATION

SAMPLING POS

1. Beauty Shots on TV

2. Variety Heroes

3. Taste challenge event

4. Range taste

New Geographies

Export

Current

Geographies

3 New geographies’ contribution :

profiting from last 5 years effort

2005-2009:

+ 800 mln inhabitants

Close to 5% of Danone

sales in 2009

0

50

100

150

200

250

300

2005 2006 2007 2008 2009

kto

ns

Significant room for growth

Danone Per Capita Consumption (kg/yr)

2009

0

2

4

6

8

10

12

Spai

n

Fran

ce

Arg

enti

na

Be

lgiu

m

Sau

di A

rab

ia

Hu

nga

ry

Po

rtu

gal

Po

lan

d

Cze

ch R

ep

ub

lic

Bu

lgar

ia

Irel

and

Fin

lan

d

Can

ada

Au

stri

a

Ro

man

ia

Mex

ico

Slo

vaki

a

Slo

ven

ia

Alg

eria

Ger

man

y

Sou

th A

fric

a

Un

ited

Kin

gdo

m

Uru

guay

Ne

ther

lan

ds

Ital

y

Turk

ey

Ch

ile

Ru

ssia

Bra

zil

USA

Swed

en

Kaz

akh

stan

Swit

zerl

and

Gre

ece

Ukr

ain

e

Ch

ina

(SH

G G

HZ)

Jap

an

Egyp

t

Ind

on

esia

Co

lom

bia

Uplift last 5 years

Today, more than ever,

food is at the heart of health issues

« Did you know that more than 700

million adults will be obese in 2015? »

« Did you know that 1 billion people do not

have daily access to adequate nutrition? »

Food abundance Food scarcity



Some suffer from food abundance

1) Chronic diseases

CardioVascular / Obesity

2) Deficiency diseases

Osteoporosis

3) Life style diseases

Stress / Digestive discomfort



Others from food scarcity

1) Nutritional Deficiencies

Undernutrition in proteins or energy

2) Infections

Diarrhea , H Pylori

Major health disorders related to food

Obesity

Diabetes

> 20

between 10 and 19

< 9

Cardiovascular Malnutrition

“Did you know that 1 person

dies from hunger every 4 seconds?”

“Did you know that each year nearly

1 million americans die from a

cardiovascular?”

“Did you know that 80% of people with

Diabetes type 2 are overweight or obese?”

“Did you know that a 40-year old, non-

smoking, obese woman has 7.1 years less of

life expectancy than her normal-weight

counterpart? “

The awareness of the role food plays continue to increase

Flora

Physiology

Macro Nutrients Genetic specificity

Probiotics

Metabolism

Kilo calories

Prot, Glu, Lip

H2O

Vitamins, amino acids,

Oligominerals,

polyphenols,

Micro Nutrients

Science of functioning

of living systems

Be

ne

fits

Activia: full potential of benefitBENEFIT

2009

Bloating Taste Breakfast After Dinner

Tasty digestive comfort In all moments

PCC Activia 2008 (kg/inhabitant/year)

2,6 2,6

1,9 1,9

1,7

1,4 1,4 1,4 1,31,3 1,3

1,1 1,11,0

0,9 0,9 0,80,8 0,7 0,7

0,60,5 0,5

0,4 0,4 0,4 0,3 0,3 0,3 0,2 0,20,1 0,1 0,1

Cze

ch

…

Fra

nce

Ca

na

ry …

Sp

ain

Be

lgiu

m

Hu

ng

ary

Slo

va

kia

Ire

lan

d

Po

rtu

ga

l

Bu

lga

ria

Ca

na

da

Fin

lan

d

UK

Slo

ve

nia

Me

xic

o

Ru

ssia

Ne

the

rl…

Arg

en

tin

a

Ita

ly

Au

str

ia

Ge

rma

ny

Sa

ud

i …

Po

lan

d

Bra

zil

Ro

ma

nia

US

A

Gre

ece

Ch

ile

Alg

eri

a

Ja

pa

n

Ukra

ine

Sw

ed

en

Tu

rke

y

So

uth

…

Actimel: full potential of benefitBENEFIT

Resistant Fortifying

Simple consumer claim Where it works

PCC Actimel 2008 (kg/inhabitant/year)

2,4

2,2

1,6

1,2 1,1 1,10,9

0,8

0,7 0,7 0,7

0,5 0,5 0,5 0,50,4 0,3 0,3 0,2 0,2

0,1 0,1 0,1 0,1 0,0 0,0 0,0

Ca

na

r…

Ire

lan

d

Sp

ain

Au

str

ia

Be

lgiu

m

Slo

ve

nia

Ge

rma

ny

Arg

en

t…

UK

Po

rtug

al

Fin

lan

d

Ita

ly

Ne

the

r…

Fra

nce

Hu

ng

ary

Cze

ch

…

Po

lan

d

Slo

va

kia

Ru

ssia

Sw

ed

en

Ro

ma

nia

Ukra

ine

US

A

Ca

na

da

Gre

ece

Sa

ud

i …

Me

xic

o

2009

Activating nutrition benefitBENEFIT

• Leverage Danone

brand

• Competitive price

• Superior taste

• Leverage local brand name

• Pre-empt private labels

• Good Taste• Roots

• Innovation

• Pleasure orientedValue-added

Basic

Door-opener

Exploring potential of new benefitsBENEFIT

Intestinal problems

ChronDigestive disorders

Constipation

Mineral deficiency

Calcium deficiency

Retention of water

Hair loss

Muscular pain

Digestion

UnderweightOsteoporosis

Tiredness

Mental agility

Cholesterol

Arthritis

Menopause

Skin ageing

Obesity

Lactose intolerance

Diabetes

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

ConcernIpsos, Health Barometer Project, figures from 1 European country

New Benefit

Current Benefit

Under Assessment Benefit

Immunity

Incidence

Gastritis

Exploring and assessing new benefitsBENEFIT

Roll out osteoporosis benefit- 50% of daily amount in Calcium and Vit D

- Validated by International Osteoporosis foundation (check)

- Start extension in Western Europe after excellent results in Spain and Argentina

Densia Yoghurt in launch phase :

1.5% of total country volumes

Same results as Danacol launch

Exploring new business modelsBENEFIT

Casa Danone Barcelona

Danone restaurant

concept:

300,000 visitors in the

only store in Barcelona

Education Yogurt Bar Restaurant

Reach Activia targets potential

46%

40%

30%

52%

42%

28%

20%

37%

PREVALENCE PENETRATION

Source: Market Research

Danacol: a €500 mln potential

through roll-outTARGET

Only 13 countries82% market sharePotential: 32% of Activia sales in mature

markets

Historical country sales

2007 2008 2009

130147

160 New communication strategy

Levers 2010:

“Little Tony” strategy to be rolled out in

existing countries: up to +50% vs last year!

Affordability:

from €0.65/dose

to €0.32/dose

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Week

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

Tons

2009 TONS

2008 TONS

Danonino entering 2 major geographiesTARGET

China 2010

USA

National roll-

out end 2009

105 mln kids of 3 to 8 yrs

TARGET

GeographicalFootprint

One meaningful area

to assess BOP model:

Indian subcontinent

> 1 bn people

Per capita potential in

recently opened

countries

800 mln consumers

with <1 kg per cap

White space in current big

countries: East Russia + West

USA + North Brazil

+ 200 mln new consumers

To reach full potential of our mission, we need to

be prepared for a tougher environement

Soft consumer spending

Tougher regulatory environement

Raws and pack inflation

Environmental sensitivity

Cross productivity programs:

10/15% reduction in 3 years

Reinvent milk cost

By-product valorization

Milk cracking

Upstream differentiation

R&P cross productivity

Supplier reengagement

Decomplexification + Dan Source

Lean & mean organization

Agile Booster program

Synergies between divisions within the same country

A&P optimization

Media Pitch every 2 years

Drastic reduction of non media costs

Maximize assets utilization

Co-distribution project for external partners

Using spare capacities to boost nutritional brands

Enabling to full Topline growth

Building economic sustainability with

consumer price below inflationECONOMIC

SUSTAINABILITY

10/15%

5/10%

10/15%

5/10%

P R O D U C T I V I T Y

15/20%

Target 3 year savings

Building environmental sustainabilityENVIRONMENTAL

SUSTAINABILITY

30% reduction of CO2/kg on direct scope: plant, transport & packaging = productivity contribution

Offset actions towards CO2 neutrality

Consumer Education Plan

Soil Restauration

Building human sustainability through

unique organization & mindset

HUMAN &

ORGANIZATION

SUSTAINABILITY

Empowerment:– P&L in CBU

– Product development leaned toward the field

Agility– Short lead times to react

– Labs philosophy: try vs test

Networking attitude– LOBAL: Topline organisation

– CBU leading major global projects

Outward looking– Leveraging stakeholders and KOLs

– Permanent radar screen

dairy strategy - danone-danonecom...

Documents