04 Protect access
to raw materials

Ensuring access to the raw materials we need is one challenge facing Danone in coming decades. Meeting it means coming to grips with environmental issues and helping our producers overcome challenging economic conditions.

Unpredictable weather and environmental damage are shrinking resources and pushing up raw materials prices. That’s why Danone is working to create structures that protect and optimize production of and access to these critical raw materials: create milk collection networks, forge strong ties with farmers, safeguarding springs.

MILK: a major stake

  • 25 000 to 30 000 farmers
  • worldwide produce 8 billon liters of milk annually for Danone
  • less than 1% of world output.
75%

It is essential for Danone to protect the milk collection networks that supply nearly 75% of the group’s business worldwide and 90% of our Fresh Dairy operations.

Strategic dairy development

Danone has opted for a local supply policy that keeps logistics costs under control and ensures optimum milk quality; we work hard, often in partnership with the Danone Ecosystem Fund, to support milk producers and become a part of the socio-economic fabric around our plants. This is a challenge in emerging countries, where production is scattered among many small producers who lack the collection structures essential to efficient production.

To correct this disparity, a number of Danone projects are creating collection structures and cooperatives for small producers in six countries: Egypt, India, Indonesia, Mexico, Turkey and Ukraine. When they pool resources and professionalize practices through these cooperatives, farmers are better positioned to run their farms, optimize purchasing, provide better feed for their herds and get veterinary care.

Result:

by raising income for producers, the cooperatives ensure that Danone will get the quality and quantity it needs.

80% In Ukraine, 80% of milk comes from tiny individual farms.

UKRAINE
Milk Communities

The Ukraine Milk Communities project, approved by the Danone Ecosystem Fund in 2009, had already succeeded in organizing 2,300 of these small producers into 24 farm cooperatives.

Buoyed by this success, Ukraine Milk Communities plans to take the program to another level in 2012: training for co-op managers and a more hands-on approach to management and division of labor.

In 2011 participating farmers delivered 8% of Danone Ukraine’s milk supply.

Watch the video
Learn more Ukraine Milk Communities

Strong ties
with farmers

This strategy of dairy development isn’t limited to emerging countries. We also take a local approach in France and Belgium, home to Danone’s “Acteurs pour un lait durable” program.

Its purpose is to forge strong ties with our partner farmers around four shared commitments: improving the quality and nutritional balance of milk; helping farms expand; protecting the environment; and promoting farming as a business.

Once a trust-based relationship is in place, both sides can take the long view.

Over 70% of Danone milk (by volume) is collected in compliance with our 2004 Quality Charter and additional environmental criteria.

“Made with
milk from our farmers”

To promote this program, several ranges of Danone products— Yoghourt Nature and Recette Crémeuse—now bear a new label: “Made with milk from our farmers”. When they see this label, consumers can be confident that the product is made with fresh milk collected from sustainably managed local farms that meet the quality requirements of the Danone charter.

Learn more France Belgium
Learn more Danone and sustainable milk

Safeguarding
springs

In 1992 Danone helped create Apieme*, an innovative association of local stakeholders dedicated to protecting the Evian spring by encouraging the growth of non-polluting businesses around the catchment area. But Apieme is not merely an environmental project: it also gets local associations and governments involved in preserving the Evian ecosystem. This model has now been extended to other springs that supply the group, including Volvic in France, Villavicencio in Argentina, Aqua in Indonesia, Bonafont in Mexico and Salus in Uruguay. All over the world, winning support from civil society has proved to be the best way of preserving local resources.

Learn more Discover the Evian source

The Aqua project
in Indonesia

Danone’s project in Klaten (Indonesia), where one of Aqua’s springs is located, includes managing the rural ecosystem to maintain economic activity and preserve jobs, manages water, promotes sustainable farming practices and supports local farm cooperatives. By the end of its first phase in November 2011, the project had helped 500 farmers gain access to micro-credit and created 30 new jobs. More broadly, by becoming involved with local populations, Danone has won the trust of the Indonesian people. Today Aqua holds a 60% share of the bottled water market and is still growing—sustainably.

Watch the video
Learn more Project in Klaten

Presentation of
the ecosystem Fund projects

The Fund has both an economic and social purpose, aiming to support, strengthen and develop local players in Danone’s ecosystem who contribute or can contribute to its CBUs business, including small farmers, suppliers, subcontractors, transport and logistics operators, distributors and the communities in which our factories are located

At the end of 2011, 29 subsidiaries (representing 35% sales of the group) and 27 NGOs got involved in the co-development and co-management process of local ecosystem projects, in 17 countries.

The Danone Ecosystem Fund has approved and funded 34 projects 17 are related to consolidate, protect or organize dairy and water sectors.

Présentation de l'action du Fonds ecosystème

Created by Danone CBUs, Ecosystem projects are conducted all over the world, in both developed and emerging countries and in 5 major focus areas:

  1. 1. Responsible sourcing (15 projects): locate and secure Danone supplies by developing partnerships with small producers.
  2. 2. Distribution (7 projects): create new distribution channels, especially in marginalized areas, and help people in difficulty enter the workforce.
  3. 3. Recycling (4 projects, 1 non started): collect PET plastic by helping organize the work of wastepicker communities and improving their social conditions.
  4. 4. Personal services (4 projects): enhance the professionalism of players in the personal services sector, with a focus on nutrition.
  5. 5. Factory sites (4 projects): help develop employment in the communities where the group’s factories are located through local economic development programs
Learn more Ecosysteme.danone.com