A new model to improve nutrition, reduce poverty, and make money

Low-cost enriched biscuits and dairy products that address children’s malnutrition have been helping French food giant Groupe Danone blend social responsibility with business growth in markets where people live on less than $1 or $2 US per day for almost a decade. Danone has also introduced innovative distribution strategies that help poor women make a living in these emerging markets.

Now Danone is building on these initiatives, part of its vision to bring health through food to a majority of people, by adopting a new community-based business model aimed at helping it reach the very poorest. Grameen Danone Foods Ltd., created with microcredit giant Grameen Bank, opened a factory in Bangladesh in 2006 to make Shaktidoi fortified yoghurt for children – and other similar ventures may grow from this model.

Danone introduced a low-priced calcium-enriched biscuit called Biskuat in Indonesia, followed by an enriched dairy product, Milkuat, in 2000. To sell the products in Jakarta, Danone co-financed the purchase of several hundred ramboks or pushcarts by local women. A similar biscuit recently introduced in China has become a best-seller. In 2004, Moufid enriched yoghurt was introduced in Morocco.

In 2005, Danimal yoghurt was piloted to the five million residents of Soweto and Orange Farm townships in South Africa. Enriched with added iron, zinc and Vitamin A to meet childrens’ nutritional needs, Danimal is sold door to door and at street stalls by women entrepreneurs known as Daniladies, for less than 15 Eurocents per pot. The pilot was so successful that it is being expanded to other townships and eventually, throughout South Africa.

Danone provides a uniform, cooler box, trolley, support and training in how to sell in open air markets or door to door in the townships; Daniladies pay for the product in advance and earn 20 South African cents from each 1-rand yoghurt pot they sell. Before Danimal, 50-year-old Joyce Daka of Orange Farm struggled to support herself, three children, and two orphans. "Often we didn't have enough food on a daily basis." Now she sells 350 to 700 pots a day and earns around 2,000 rand ($287) per month. "It's made a huge difference in my situation," said Daka.

In 2006, Mleczny Start, a low priced breakfast porridge enriched with minerals and vitamins D, C, E and B6, was introduced in Poland, where three million children and youth suffer nutrition-related health problems. The product grew from a partnership that began in 2002 when Danone Poland and two Polish scientific institutes launched the country’s first national study of nutrition in four-year-olds. Developed in partnership with Lubella, Poland’s leading grain products firm, which produces it; top discount distributor Biedronka, which distributes it nationally; and the Mother and Child Institute, which verifies the nutritional content, Mleczny Start costs 15 Eurocents per packet.

Grameen Danone Foods aims to build on these earlier lessons in partnering and marketing by helping to reduce community poverty while bringing improved nutrition to the 48% of Bangladeshi children under five who are malnourished. It seeks to benefit the community in general by creating more than 1,000 livestock and distribution jobs (including the Grameen Ladies who sell Shoktidoi yoghurt door to door), while still earning a profit.

Unique approaches in both plant design and financing were needed to build the plant in Bogra, 150 kilometres north of the capital, Dhaka. The plant is lit using compost-generated gas, uses biodegradable packaging, reduces automation to a minimum, and copes with a lack of refrigeration between milk collection points and the plant. The product recipe was adapted to use locally-produced date molasses rather than expensive imported sugar.

The project drew such wide interest that has Danone created a unique investment fund, Danone Communities, managed by a leading European bank and aimed at investors who want to promote new models for development while getting at least a minimum return. The fund will help finance new Grameen Danone plants in Bangladesh and new projects on other continents.

This story was prepared from various sources, including Dani Ladies on front line of push to sell to poor, Eric Onstad, Reuters; Danone CEO visits South Africa and pledges support to combat malnutrition, Professional Nursing Today; Zidane Inaugurates first Grameen Danone Dairy Plant, Grameen Dialogue; Grameen Danone Foods opens Wednesday, Daily Star; Grameen-Danone venture to launch fortified yoghurt, Rasheeda Bhagat, Business Daily; Danone & Grameen Group Team Up, Aaron Charlop-Powers; Big firms rush to tap vast market of poor consumers, Eric Onstad, Reuters; DANONE Economic & Social report 2006; and 2006 Danone Sustainability Report.

 


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