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How do you account for Danone’s healthy results in the troubled context...
How do you account for Danone’s healthy results in the troubled context of the past year?
Franck Riboud: I don’t want to sound presumptuous, but I am convinced that Danone has the right business model. We have four business lines perfectly attuned to needs and long-term trends in consumer demand, we have robust brands backed by quality R&D and effective advertising, and our products are made with extreme care to ensure better taste and nutritional content. And then there is our geographical reach: with our worldwide presence, we can make the most of growth momentum anywhere. Not to mention our culture, which emphasizes pragmatism, adaptability and local decisions — what I have called being “quick on your feet.” In testing times, when you need to take a fresh look at things, that is a huge advantage.
Have all your business lines contributed to this growth?
FR: We have held to our strategic course for all our business lines, although we have not hesitated to change our ways in response to much tougher conditions. And that is what I think has enabled Danone to return to the sort of growth we had been used to — putting us consistently ahead of others in the food industry. Figures show that all our businesses are growing. Without exception. Fresh Dairy Products scored a very sound 6.5% rise, which is particularly important because the division accounts for nearly 60% of our sales. Medical Nutrition and Baby Nutrition again posted gains of close to 10%, thanks in part to our geographical expansion. And our Waters division, which was hit hard by the economic downturn on mature markets, showed renewed pace with rises of 5.2% in value and 7.3% in volume. Its growth was always impressive in new economies, but sales in the developed world, particularly in Europe, had flagged. Our brand teams made really remarkable efforts to inject new life into the French and German markets and restore the appeal of natural waters — beverages that offer consistently high quality, that are stored naturally and are naturally good for health, and that are environmentally sound. In 2010 their work began to pay off.
