Danone has launched a “global strategic partnerships programme” in a bid to forge a closer relationship with suppliers, start-ups and institutions.
In an attempt to move away from what Danone can see as transactional relationships with suppliers, the Activia and Evian brands owner suggested the Partner for Growth initiative will help the company “seize consumer trends to unlock growth opportunities for both Danone and its partners”.
The initiative has started with a joint business development plan signed with Danish ingredients company Chr. Hansen. The two companies will look at ways to speed up developments in the area of plant-based and dairy products.
“This new plan will enable Danone to push boundaries of innovation in the dairy and plant-based categories by using Chr. Hansen’s leading bio-solutions capabilities and leveraging both companies’ extensive culture collections,” The French company said.
Danone said it has also signed three new supplier deals with the ambition of tripling that number before the end of the year.
Danone Manifesto Ventures, the company’s corporate venture arm, will also be involved in the scheme as it “helps bring high potential emerging brands, concepts, or capabilities to the market”.
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The French giant is also looking to team up with start-ups and academic institutions.
Danone said its Partner for Growth programme is focused on four “inter-connected strategic pillars” it hopes will “unlock growth opportunities”.
One opportunity Danone sees is in emerging science and technology – discovering “breakthroughs” in ingredients, agriculture, processes and packaging.
The programme will also look at using technology and best practice to improve efficiency, reduce waste and optimise logistics.
Vikram Agarwal, the Unilever veteran who joined Danone as chief operating officer last year, said the programme is “a structured, holistic and mutually-beneficial approach to transform the way we work with partners, to take advantage of short-term opportunities and prepare our brands and categories for sustainable growth in the long term”.
He added: “It will help us leverage more from our supplier and partner eco-system to drive shared business growth rather than using a traditional linear approach.”
In the first half of 2023, Danone’s sales rose 6.3% to €14.17bn ($15.2bn), which amounted to an 8.4% increase on a like-for-like basis.
The company’s recurring operating income stood at €1.73bn, 7.6% higher year on year and by 5.8% like-for-like. Danone’s recurring operating margin stood at 12.2%, compared to 12.1% in the first half of 2022. The group said that was down 30 basis points like-for-like.
Danone is forecasting a 4-6% rise in like-for-like sales and a “moderate improvement” in its recurring operating margin this year.