GRAMEEN DANONE FOODS LTD. A Social Business Enterprise A unique “community” model

Total population: 144 million - 80% rural 41% aged below 14 Average family size: 4.9 GDP / cap : 600$ a year (Indon.: 1,200$) Density 1000 p. / km² Sources : 2004 statistical yearbook of Bangladesh, 2005 estimates on total population, household income per day € 2.9-4.1 a day (233-333Tk) <€1 a day (<83Tk) € 2-2.9 a day (167-232Tk) Country background: population pyramid Grameen Danone Project 11% >€4.1 a day (>333Tk) 16% 22% 14% 37% € 1-2 a day (83-166Tk)

Key health/nutrition concerns in Bangladesh Source: Grameen/local NGOs Micro Nutrition Issues Iron (49% among young children) Vitamin B2 Calcium Vitamin C Vitamin A Iodine and zinc likely Health Concerns Stunting (41% of young children) Diarrhoea Polluted water (arsenic, bacteria) Macro Nutrition Issues 87% of protein source is vegetal (lentils and beans), deficiency in essential amino-acids likely Overall energy deficiency, particularly among young children (between 24% and 40% gap vs RDA) Protein deficiency

Micro Nutrition Issues

Iron (49% among young children)

Vitamin B2

Calcium

Vitamin C

Vitamin A

Iodine and zinc likely

Health Concerns

Stunting (41% of young children)

Diarrhoea

Polluted water (arsenic, bacteria)

Macro Nutrition Issues

87% of protein source is vegetal (lentils and beans), deficiency in essential amino-acids likely

Overall energy deficiency, particularly among young children (between 24% and 40% gap vs RDA)

Protein deficiency

Grameen Danone: project objectives Reduce poverty by a unique proximity business model which brings daily healthy nutrition to the poor the mission

4 objectives Improve living conditions of the poorest in the community by involving them in all stages of the business model Profitability to ensure return on capital and sustainability Preserve natural resources as much as possible Health through nutrition at a very affordable price for all Bangladeshi children

Improve living conditions of the poorest in the community by involving them in all stages of the business model

Profitability to ensure return on capital and sustainability

Preserve natural resources as much as possible

Health through nutrition at a very affordable price for all Bangladeshi children

Key contributions Technical expertise and assistance in local regulatory environment, micro-credit financing, agriculture mgt, distribution and consumer education Grameen (50%) Technical expertise in R&D, nutrition, manufacturing, quality, marketing Danone (50%) Technical expertise in fortification, nutrition marketing, efficacy study GAIN

I want my children to be strong and healthy so that they can succeed with their activities today and in the future It is sweet and delicious made from fresh milk, which brings proteins, calcium and phosphorus fortified with 30% daily needs in vitamin A, Zinc, iron, iodine contains live ferments which help a good functioning of the intestine Available at 5 Tk or 0,06 € Product concept

I want my children to be strong and healthy so that they can succeed with their activities today and in the future

It is sweet and delicious

made from fresh milk, which brings proteins, calcium and phosphorus

fortified with 30% daily needs in vitamin A, Zinc, iron, iodine

contains live ferments which help a good functioning of the intestine

Available at 5 Tk or 0,06 €

Community business model : execution Proximity : 25km radius (ie 20km max. rickshaw + 5km max. pedestrian) Based on village density, 2,500t min. potential p.a. Local milk sourcing : 500 micro-farms, 2000 cows, doubling milk productivity Mini plant : deskilled and manualized process to maximize number and type of jobs created Sales and distribution : 1,000 to 2,000 Grameen ladies + 700 shops

Proximity : 25km radius (ie 20km max. rickshaw + 5km max. pedestrian)

Based on village density, 2,500t min. potential p.a.

Local milk sourcing : 500 micro-farms, 2000 cows, doubling milk productivity

Mini plant : deskilled and manualized process to maximize number and type of jobs created

Sales and distribution : 1,000 to 2,000 Grameen ladies + 700 shops

High speed from idea to launch Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Preparation (Nov. 29 th 2005 workshop) Immersion and information gathering Concept definition & business plan Product development First implementation, then scale up March 16 th 2006 MOU We are here One year from day 1 of the project to actual launch!

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“ Zidane” plant Mini plant 3,000 tons max. capacity, 1 SKU Deep functionality analysis, zero-base design Deskilled process enabling job opportunities Environment friendly : Gas as primary source for energy ; Solar as significant secondary Rain water recycling Water treatment station

Mini plant 3,000 tons max. capacity, 1 SKU

Deep functionality analysis, zero-base design

Deskilled process enabling job opportunities

Environment friendly :

Gas as primary source for energy ; Solar as significant secondary

Rain water recycling

Water treatment station

Récupération d’eau de pluie:

Le solaire pour la chaudière:

Récupération du gaz Station d’épuration …

Formation de la force de vente :

Sampling dans les écoles

De l’usine au Centre de Distribution

La chaîne du froid

Les points de vente

Les clients

Proximity and Nutrition marketing

Social impact KPIs Example : GAIN’s efficacy study Objective: Evaluate the impact of a fortified vs non-fortified yogurt Evaluate the impact of a fortified yogurt vs no regular yogurt consumption at all Specifics: Evaluate the impact of the fortified yogurt on morbidity, growth, cognitive development and status indicators Over periods of 6 months and one year Principal investigator: Sunil Sazawal MD, MPH, PhD Primary Institution: Johns Hopkins university, USA Collaborating Institution: Center for Micronutrient Research, India Partnership: GAIN (funding and technical advising)

Objective:

Evaluate the impact of a fortified vs non-fortified yogurt

Evaluate the impact of a fortified yogurt vs no regular yogurt consumption at all

Specifics:

Evaluate the impact of the fortified yogurt on morbidity, growth, cognitive development and status indicators

Over periods of 6 months and one year

Principal investigator: Sunil Sazawal MD, MPH, PhD

Primary Institution: Johns Hopkins university, USA

Collaborating Institution: Center for Micronutrient Research, India

Partnership: GAIN (funding and technical advising)

10-year dream 100 MM€ sales, pay-back on capex on a 3-5 year period, requiring constant model reengineering (pack, size, prices) 20-25% pop. weekly penetration 30 to 50 plants covering half of 62,000 villages 50 to 100,000 sales and distribution jobs created. 25,000 farm jobs created Replicated in most rural areas (co-owned basis)

100 MM€ sales, pay-back on capex on a 3-5 year period, requiring constant model reengineering (pack, size, prices)

20-25% pop. weekly penetration

30 to 50 plants covering half of 62,000 villages

50 to 100,000 sales and distribution jobs created.

25,000 farm jobs created

Replicated in most rural areas (co-owned basis)