Danone in the world by D.Marchetti

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Danone in the world by D.Marchetti

  1. 1. DANONE IN THE WORLD4 Divisions MEDICAL NUTRITION BABY NUTRICION DAIRY WATERS
  2. 2. DANONE IN THE WORLD MEDICAL NUTRITION 4 Divisions BABY NUTRICION DAIRY WATERS17 Billion € – sales in 2010
  3. 3. PRODUCTS BY BUSINESS LINEDairy products - No 1 worldwide Baby nutrition - № 2 worldwide Waters - №2 worldwide Medical nutrition - No 1 in Europe
  4. 4. DANONE GLOBAL STRATEGY IN DAIRY 1) Live to eat vs Eat to live ↑ 220 million EUR are invested into R+D every year. a) Danone Research has a staff of 1,200 including 600 scientists and 450 specialized developers; b) Partnerships with over 200 scientific institutes around the world; c) 100% of Danone researches are focused on healthy and nutritional qualities of products 2) “Double Project” A business can only survive if it improves social wellbeing of people around it. (Antoine Riboud, Marseille 1972) a) Social Farming + Business b) Environment 3) Healthy growth
  5. 5. DANONE GLOBAL STRATEGY IN DAIRY 1) Live to eat vs Eat to live ↑ 220 million EUR are invested into R+D every year. a) Danone Research has a staff of 1,200 including 600 scientists and 450 specialized developers; b) Partnerships with over 200 scientific institutes around the world; c) 100% of Danone researches are focused on healthy and nutritional qualities of products 2) “Double Project” A business can only survive if it improves social wellbeing of people around it. (Antoine Riboud, Marseille 1972) a) Social Farming + Business b) Environment 3) Healthy growth
  6. 6. DANONE GLOBAL STRATEGY IN DAIRY 1) Live to eat vs Eat to live ↑ 220 million EUR are invested into R+D every year. a) Danone Research has a staff of 1,200 including 600 scientists and 450 specialized developers; b) Partnerships with over 200 scientific institutes around the world; c) 100% of Danone researches are focused on healthy and nutritional qualities of products 2) “Double Project” A business can only survive if it improves social wellbeing of people around it. (Antoine Riboud, Marseille 1972) a) Social Farming + Business b) Environment 3) Healthy growth
  7. 7. SOME OF OUR BRANDS IN UKRAINE
  8. 8. DAIRY SECTOR IN UKRAINE – Overall Decline Industrial Farms Individuals Share in milk total production 20% Share in milk total production 80% Quality TBC=600 th/ml Quality TBC=5 mln/ml Average Cows 200 Average Cows 1,7 20,0 18,6 20,0 18,0 18,0 16,0 16,0 14,0 14,0 12,0 12,0 11,2 10,8kTons kTons 9,4 10,1 9,7 9,4 10,0 10,0 9,0 9,0 8,8 7,8 8,0 8,0 5,9 6,0 6,0 3,7 4,0 2,6 2,5 2,2 2,1 2,2 2,2 2,16 4,0 2,0 2,0 0,0 0,0 90 95 00 05 06 07 08 09 10 11 90 95 00 05 06 07 08 09 10 11 19 19 20 20 20 20 20 20 20 20 19 19 20 20 20 20 20 20 20 202011 - estimation
  9. 9. Results Milk prise (farms) = +63%, but dairy products only 35% on average. Cost for raw milk price for processors without subsidies – increase much higher! Industry is suffering and may disappear.
  10. 10. DANONE MILK STRATEGY  3-TIER STRATEGYIndividuals - 80% Transformation individual into family farms through Coops + Demo Farms Farm DevelopmentIndustrial Farms – Program + loans16%Large Farms (1000 Vertical Integrationand more cows) - 4% through partnerships
  11. 11. COOPS UNDER PROJECT ARE LOCATEDIN 5 REGIONS OF UKRAINE
  12. 12. COOPS UNDER PROJECT ARE LOCATEDIN 5 REGIONS OF UKRAINE
  13. 13. After 1 year initial results promising  25 COOPS  31,1 mln. UAH invested (incl. DemoFarm)  2 218 individuals (households families, coops members)  40% increase income for individuals  30% of Kherson Milk coming from COOPS Services supplied • milk collection and cooling, delivering of drinking water, • cows insemination & veterinary services, • forage production (embaling of hay and straw, silage production), • support in realization of other products from individuals,• wholesale buying of consumer good for coops members by lower prices trainings and other.
  14. 14. FROM INDIVIDUAL FARMING TO SMALL SUSTAINABLE FARMING Step 1Individuals ServiceMicro farmers CoopsProject: Milk Communities in Ukraine Project: DemoFarmCost: 1M€ + 1.6 million (USA) Cost: 0.5 M€ Project objectives: to show 5-year vision to coops To enroll future partners (banks, government, farmers, coops)
  15. 15. FROM INDIVIDUAL FARMING TO SMALL SUSTAINABLE FARMING  1.6 million (USA)  200 heifers purchase and delivered to coops members Calves has to be given for free to other coops members as a giftUKRAINE
  16. 16. FROM INDIVIDUAL FARMING TO SMALL SUSTAINABLE FARMING Step 1 Step 2 Step 3Individuals Service Service + FarmsMicro farmers Coops Production Medium or Coops + Small Micro FarmersProject: Milk Communities in Ukraine Project: DemoFarmCost: 1M€ + 1.6 million USD (USA) Cost: 1.5 M€ Project objectives: to show 5-year vision to coops To enroll future partners (banks, government, farmers, coops)
  17. 17. DemoFarm mechanismDemoFarm project aims DemoFarm services: to create learning • Farming knowledge & opportunity to coop practicemembers who is willing to • Feeding based on start family farm Coops balanced rations • In-depth vet & genetic services Milk Farm Farmer School is Farmer located/ integrated at modern milk farm (120 School small cows) with model demo farmvisualization at 3 private family farms
  18. 18. Demo Farm is under constructionSep • Zero cycle (foundation)Oct • Frame constructionNov • Construction of roofingDec • Installation of sections for livestock keeping and internal utility networksJan • Mounting of equipment
  19. 19. Mega Farm Projects JV Partnership 3 way Partnership- JV gives Danone - Greenfield and - Danone in co- (with control stake) Brownfield operation with the control over projects. Bank offers low-rate production cost of loans in UAH. milk. - Danone provides long-term contract (7-10 years) >> - APR 9-14% vs 17-- Projects could be partner builds 22% in Market formed in Portfolio farm >> Danone and financed together buys cows. with EBRD and - Over 15 farms will Government. use the financing. - 1-2 projects to be approved in 2011.- 1-2 projects to be approved in 2011.
  20. 20. CRITERIA• Availability of • Partners • Economic lands for crops: mindset: criteria:- land size and quality - skills/competences - total investment per - enterpreneural spirit animal <8kEuro- water access - management & - open book approach- presence of feed controlling market - readiness to co- - immaculate business finance in early image stage of the project - acceptance of exit strategy
  21. 21. IN EGYPT DANONE WENT ALL THE WAY! First “Dan Farm”
  22. 22. Overview of overall Impact 3500 cows heads by end of 2012 Increase milk supply by 25 Thsd. T Attract/Invest 13 Mln. Euros (with loans and interest rate compensation) High standards in milk production: Quality, Safety, Productivity, low costs Improvement of social wellbeing of rural people
  23. 23. WITH THIS ACTION PLAN WE PLAN TO:1. Continue our growth2. Positively impact dairy farmers3. Support Ukraine’s development in Dairy (Farming + Processing)4. Build “Crisis Proof” Business Model

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