History & Origin . . . . . . . . . . . . . . . . . . 3

Early Evolution . . . . . . . . . . . . . . . . . . . 5

Global Expansion . . . . . . . . . . . . . . . . . 9

Company Structure . . . . . . . . . . . . . . 10

Recent Efforts . . . . . . . . . . . . . . . . . . . .12

Company DNA . . . . . . . . . . . . . . . . . . 19

Summary . . . . . . . . . . . . . . . . . . . . . . . 20

Social Media Accounts . . . . . . . . . . . 21

2

❖ Founded at Barcelona, Spain on 1919 by Isaac Carrasso

❖ Isaac’s interest in yoghurt started when his friends told him about

the beneficial benefits of eating it.

❖ He also heard about Ilya Metchnikoff, winner of the 1908 Nobel

Prize in medicine for his work on the immune system, was also

researching about yoghurt.

❖ He began producing his own yogurt in a small Barcelona shop.

❖ He named it Danone, as it was an affectionate version of his little

son’s name which meant “Big Daniel”

❖ Danone yoghurt gave Isaac two problems:

▪ First, no one in Barcelona had ever heard of it

▪ Secondly, most were deeply dis-inclined to adapt to their

eating habits to include yoghurt.

3

❖ It was Isaac’s medical connections that came to the rescue.

❖ He toured the surgeries of his medical chums, requesting to prescribe

a dose of yoghurt for any digestive problems they encountered

❖ In 1923, Isaac sent Daniel to business school in Marseille, France.

❖ He went on to study bacteriology to better understand fermentation

❖ Yoghurt itself was as unknown in 1929 in Paris, as it had been in 1919

in Barcelona

❖ So Daniel’s first priority was to develop some advertising

❖ The advertising highlighted the beneficial effects of Danone yoghurt

❖ This combined with a promise with professional packaging and design,

plus distribution across as many food stores as Daniel could persuade

to take it.

❖ It was a mass-market product waiting to happen.

4

❖ Daniel moved to America in 1941, leaving the running of Danone

France and Danone Spain to two trusted long-time managers.

❖ He purchased a small factory in New York and named it Dannon

Milk Products in partnership with a Spanish father and son.

❖ In the sales of $100 a week, they were still the New York’s biggest

yoghurt company

❖ In 1950, Dannon finally hit on a idea that would break yoghurt out

of its US niche of immigrants and health faddists.

❖ They put a layer of sweet strawberry conserve in the bottom of the

pot and radically change the advertising.

❖ The ‘Doctors recommend it’ changed overnight to ‘A wonderful

snack … A delicious dessert’

❖ By 1956, Juan Metzger, the junior Spanish partner, knew that they

had finally broken through.

5

❖ At 1959, Dannon had annual sales in US of $3 million a year

❖ Producing three quarters of the country’s supply of yoghurt in that year.

❖ When the company had slipped off Daniel’s radar putting all his

energies into the French businesses and, to a lesser extent, the Spanish

❖ So they sold Dannon to Beatrice Foods, with Juan Metzger staying on to

run under the new subsidiary.

❖ Retail-to-home chilled infrastructure increased the marketability of

Danone yoghurts from 7% of households to 47% a decade later

❖ In the late 1950’s, Danone began building more factories to service the

quickly rising demand

❖ The opening of the first Carrefour hypermarket in 1963 made large

customers baulked at dealing with a plethora of local dairy suppliers

❖ These get Danone into other categories, such as fromage frais

6

❖ In 1967, Danone merged with the Gervais cheese company

❖ Gervais-Danone moved into pasta and ready-to-serve meals

❖ BSN, the company’s glass bottles supplier and Gervais-Danone

both faced the same problems.

❖ As common market expanding, big fish in small ponds was turning

into small fish in very big ones.

❖ BSN failed to win the bid on France’s oldest companies, Compagnie

de Saint-Gobain in 1968.

❖ BSN Chairman, Antoine Riboud made a visit to Illinois Owens, the

world’s largest glass packaging manufacturer.

❖ He remembered that the company strategy was to diversify from

glass into other packaging such as cardboard, metal and plastics

❖ Riboud then felt that this strategy was wrong

❖ So on 1970, BSN took over full control of Evian and

7

❖ And bought Kronenbourg and the Société Européenne des Brasseries.

❖ Overnight, BSN became the national market leader in water, beer and

baby food categories, all three of which were big buyers of glass bottles

are from BSN.

❖ Brought in Francis Gautier, a packaged goods specialist and former CEO

of Colgate-Palmolive France to run its new foods company

❖ It continued to expand by buying companies in West Germany, Austria

and Belgium, enjoying 50% share of European flat glass market.

❖ By 1972, it was France’s largest food business, turning over two billion

francs in the nation’s chiller cabinets and grocery aisles

❖ Gervais-Danone merged with BSN in 1973.

❖ In 1975, the whole company drive into the red for the first and only

time in its history due to the oil crisis.

❖ To save the company, they moved and build five new float-glass plants

operating on a license from Pilkington.

8

❖ The plate glass business, now modernized, profitable and saleable

was disposed of in two trances.

❖ First, the businesses outside the France

❖ Two years later, the remaining French assets

❖ The company was now focused on food. Its glass bottle business

became a vertically intergrated add-on.

❖ European unification sparked another trend, big retail cross border

alliances.

❖ This gave BSN-Gervais Danone a power to transform from regional

supplier to the world's largest single consumer market.

❖ In 1970s, the company began their series of international

expansions, initially in southern Europe.

❖ Their mineral acquisitions especially in Italy made the company the

world's largest bottler of mineral water.

9

❖ But the biggest leap was a major expansion into business biscuits,

the Europe-wide Generale Biscuit Group in 1986 and Nabisco's

European subsidiaries in 1989.

❖ In the early 1990s, some Danone joint ventures were followed in

Czechoslovakia, Hungary, Bulgaria, Poland and Russia.

❖ Also cquired well-known local brands, Cokoladovny in

Czechoslovakia and Bolshevik in Russia.

❖ Main overseas push happened in 1990, with the joint venture with

RtR Nabisco's Asia-Pacific businesses and Britannia Biscuits, India's

largest biscuit company.

❖ They extended their biscuit presence in Asia through a joint

ventures in China in 1992 and in Indonesia in 1995.

❖ In 1994, launched Actimel, an innovative probiotic yoghurt drink.10

❖ Danone built a company in France, US and Spain

❖ They expanded in Belgium and Morocco

❖ While Gervais had set up shop in Belgium and West Germany

❖ But those merges resulting in expanding further afield into Brazil,

Mexico and Italy

❖ Followed by the merged between BSN.

❖ It resulted in 1978 acquisition of a minority interest in the Belgian

brewer Alken, followed a year later by minority stakes in two more

beer companies, Mahou in Spain and Wührer in Italy

❖ Around 1967, they were selling around 1/3 of the 100 million half-

pint cups of yoghurt consumed in the US annually

❖ Dannon was dubbed to be the first company to establish national

distribution for perishable food

11

❖ First task undertaken by the general manager of the foods side was to

establish divisions based on product sectors.

❖ Group coordination was achieved by initiating a strict “Management by

objectives” approach with regular oversights at the regional or global

level governed by the complexity of the product line

❖ The business had diversified its way to much greater complexity in 1996

❖ Each business unit reported into one to ten “Business lines”: Fresh Dairy

Products Europe, Groceries and Fresh & Frozen Ready-to-Serve Meals,

Pasta and Canned Foods, Biscuits, Beer, Mineral Water, Glass

Containers, Asia-Pacific, Americas & Africa and Exports

❖ The 2007 sale of Biscuits plus the acquisition of Royal Numico, resulted

in four distinct Business Lines: Fresh Dairy, Waters, Infant Nutrition and

Medical Nutrition.

12

❖ Each Business Line initially has its own dedicated function,

conducting fundamental research which it then passed down to the

business units, whose own development departments made the

transition from research to production.

❖ In 2000, three Product Line R & D teams were combined to form

one, multidisciplinary centre, the Daniel Carasso Research Center,

where activities were refocused on a limited number of key

strategic projects which all had nutrition at their heart

❖ In 2002, the balance of personnel had shifted, with around 500

working in the Centre as against 300 in the Business Units

❖ A dedicated central Business Development unit was charged with

identifying opportunities relevant to the company’s strategic

priorities, conducting research and making recommendations to the

Executive Committee, the company’s main decision-making body.

13

2004

❖ Enabled Danone to grow organic sales by 5% in 2001, 6% in 2002,

7% in 2003 and a company record - 7.8%

❖ Had 200 plants in 120 countries

❖ Dubbed as the number 1 dairy company in the world

❖ Tied number 1 with Nestle for waters and world’s number 2 for

biscuits

❖ Have led the sales market with 75%

❖ Danone had 18% global share and a share of over 25% in its ten

most important markets

❖ An anti-cholesterol dairy product was launched in Europe

❖ Activia rolled out in Germany, Canada, Mexico and the Nether-lands

❖ Drinkable Activia, Danette and Danonino were launched in France,

Spain and Argentina

❖ Dannon’s Light & Fit Carb Control that launched in January 200414

2005

❖ Organic sales went up by another 6.7%

❖ Operating margin was inching forward despite rises in packaging cost

❖ The five countries that had been significant for sustained growth -

China, Indonesia, Russia, Mexico and the US

❖ Grew by 18% in the year and accounted for 25% of total sale

❖ In 2005, 55% of dairy sales came from ‘proximity business’: retail

outlets outside the large, Western-style supermarkets and

hypermarkets.

❖ “Daniladies” created to sell the product door to door

❖ Partnered with a microcredit bank in Bangladesh

❖ Financed the purchase of hundreds of pushcarts for street sales in

Indonesia

❖ Added another 100,000 distribution points

❖ Biscuits grew by 30% in Indonesia, 20% in Russia and 9% in China

15

2006

❖ Organic sales up another 9.7%

❖ The effectiveness of the Danone business model in dairy and waters

up by 9.2% and 14.8% respectively

❖ Success in dairy was due to continued rollout into new markets of the

four power brands: Activia, Actimel, Vitalinea-taillefine, Danonino

❖ These brands grew by an average of 15%

❖ Activia grew by 48% to a combined total of 1.3 billion Euro

❖ Activia-DanActive in America racked up sales of 130 million making it

one of the country’s top new grocery product of the year

❖ Beverages grow by 14.8%

❖ The Mexican Bonafont continued its growth, reaching a billion litres.

❖ New Zealand-developed V energy drink, rolled out in Argentina,

China and Indonesia

16

2007

❖ The company is active on every continent and generating annual

sales of nearly 3 billion

❖ The new deal gave Danone four product lines: fresh dairy product

with 57% of sales, water with 21%, baby nutrition with 17%, and

medical nutrition with 5%

❖ An 7% sales increase and margins rising for thirteenth year in a row

2008

❖ Overall growth came in at 8.8%

❖ Europe and South America both had 5% growth in the mid-teens

❖ The medical nutrition took second place in the growth rate at

+12.7%, completing an excellent first year for the Royal Numico

acquisition

❖ Fresh dairy excelled, growing over 12% and water for only 2%17

2009

❖ Danone sales went up by 3%

❖ The hugely troubled US market achieving a 9% growth in the fourth

quarter.

❖ In emerging markets, 12% growth in Indonesia and 7% in China

❖ Danone ended the year having grown global market share in all four

product Lines and in 70% of the markets where it operated

2010

❖ The company averaged nearly 7% sales growth per quarter.

❖ Water sales value rising by over 5% and volumes by nearly 8%

❖ Mexico, Indonesia, China, Russia, US and Brazil were all delivering

double-digit growth with 14% average and 20% in Brazil, Russia and

US

❖ With nearly 8% growth, 3% came from volume and the rest price18

2011

❖ Growth was nearly 8% - 3% came from volume and the rest price

❖ Sales reached a new high of €19.3 billion, 80% from emerging markets,

with Asia growing by 20% and Rest of World by 13%.

❖ Europe grew by just 2%, as against 60% of from the six MICRUB

markets

❖ US had been slow to spot the meteoric rise of the Greek yoghurt, up

from 5% of the market in 2009 to 25%

❖ Waters grew by over 15% and managed to improve its margins despite

a 20% increase in packaging costs

❖ Activia being available in 72 countries, was the big performer

❖ Baby nutrition sales increased by 10.7%

❖ Medical nutrition grew by 9.4% in the year and 50% since acquisition

❖ Employs 60% of the company’s staff of 101,000, led to the DanCare

programme

19

2012

❖ Sales growth up by 5.45%

❖ Waters increased volume of over 6%, the top-line increase of 10%

plus goosed by continuing above-average growth of flavored aqua-

drinks

❖ The company’s strongest position lay in baby nutrition, where

growth of 11.6% was led by the infant formula brands, particularly in

the Chinese market, and also supported by the leading Dumex brand

❖ North American market was strengthened by the acquisition of

Happy Family Organic Superfoods

❖ Sales in China, Turkey and Brazil drove more than 6% increase

overall, European sales declined by over 2%, while Asia grew 12%

and the rest of the world by nearly 5%

❖ Danone struck up one its historical partnership deals by taking a

67% stake in Morocco’s largest dairy company 20

❖ The original founder, Daniel Carasso, lived through almost the

company’s entire history. And when Danone took its modern form, it

had two leaders, who happened to be father and son

❖ It has created an operating style and form based more on individual

beliefs and character.

❖ Three key features that make Danone unique:

1. Health/Well - Being rather than simply bolting developed

healthful alternatives onto existing business

2. Local/Global - The beauty of the Danone style is that it can

operate the way it still have global brands that work and originate

from local settings, products with international clout.

3. Forward Thinking - The diversification of the portfolio, the early

moves into Eastern Europe and other emerging markets, the

seismic divestment of biscuits coupled with the Royal Numico

acquisition21

❖ The evolution of Danone from a French glass company looking for

bottle contents to the world’s largest health-through-food company

is an impressive story.

❖ The Danone Group is the market leader in the 38 of its biggest

countries, with the benefits of a usefully fragmented retail

customer base: its top five customers provide only 14% of its sales.

22

Website: www.danone.com

LinkedIn: www.linkedin.com/company/danone

Facebook: www.facebook.com/groupe.danone

Twitter: www.twitter.com/DanoneGroup

23