Faber: "We might like it or not but there is a revolution out there"

Faber: "We might like it or not but there is a revolution out there"

Danone has outlined a series of company goals to 2030, targets the French food giant believes will "drive long-term sustainable value creation".

The Activia and Alpro maker has issued a set of nine goals including "superior, sustainable, profitable growth" and achieving company-wide B Corp certification, a designation it has secured for parts of its business.

Danone has yet to put any specific numbers against the goals, with plans over the next year to work on the details behind the targets.
 
Alongside the goals, Danone has devised what it described as "an innovative governance and employee participation model". Danone staff will be given the opportunity to have input into the drawing up of the strategy to meet the 2030 goals and own shares in the business.

Speaking to just-food, CEO Emmanuel Faber claimed the model Danone had drawn up would give staff the ability to "co-own the strategic agenda of the company".

Faber said: "We will create an ability for all the people at Danone to debate at the local level the relevance and the priorities in their own business situation what the priorities should be and to ask all the concrete questions that are behind each of the goals.

"We will have local chapters of discussions and debates where the 100,000 people at Danone will be able to raise their point of view on each of these nine integrated goals and their priorities in terms of roadmaps. From that base - it will be a bottom-up process - we will be able to aggregate those into a combined, consistent, global roadmap for the world. We expect that to be at the latest, at the next AGM in April 2019."

The governance model - dubbed 'One Person, One Voice, One Share' - will also see all Danone employees granted one share in the business, alongside what the company called "an annual, amplified, dividend-based incentive scheme".

Faber said: "We do have employee profit sharing schemes in limited geographical regions but the big innovation there is that it will be on the global performance of the company. The second big innovation is it will be based on the dividend paid. It's directly attached to the yield that will be returned to our shareholders, not to the performance of our business per se, so it goes beyond that.

"The programme will also encompass the broadening of the employee ownership plan that we have in France, which is only for French employees today. We intend to broaden this at the global scale to make sure that through a similar mechanism any Danone employee will have the opportunity, on top of the one share that we will grant to him or her, the opportunity to invest more in the company through this broadened scheme."

Asked whether Danone had discussed the 2030 roadmap with investors, Faber said the company had "explored the topic" but had not provided specific details ahead of the announcement.

Moreover, asked whether he thought there would be any concerns in the investment community about the input Danone staff could have in the company's strategy, Faber indicated he believed the changes the group were making were vital for its growth.

"The one thing that large, listed companies have missed over the last ten years is we might like it or we might not like it, we might see it or we might not see it, but there is a revolution out there. If you want to continue to lose volume and market shares to all the local brands, the smaller guys, the more transparent brands, the alternative channels, just continue to do the same as yesterday and the trend will be the same," Faber said.
       
"If you want to thrive through this revolution you have to change things and adjust to where the energy is and how people tomorrow are going to be engaging in what they do. We are very transparent with our shareholders as to where our mind is about all of this and that includes the way we have been moving on our portfolio of businesses - acquiring into the organic space, acquiring into the non-animal protein space, innovating in those spaces and in medical nutrition etc because I think this is really where the next generation of growth is going to be.

"On top of this I would add I also shared with our investor community very bluntly that I think the level of engagement of the people at Danone is probably our most unique and valuable competitive advantage and so whatever allows Danone to reinforce, maintain, strengthen the relative level of engagement of our people around the world, I think is at the end, good for what we want to do, which is create sustainable value."

Since Faber was promoted to the position of Danone CEO in 2014, he has been vocal in arguing the way the food industry does business has to change.

Last year, in a speech at the Consumer Goods Forum summit in Berlin, Faber urged the food industry to join a "movement" that aims to "nurture the adoption of healthier and more sustainable eating and drinking habits".

At the event, Faber presented Danone's new company "signature" of 'One Planet. One Health' and he argues the 2030 goals will be "our long-range lighthouse in realising our vision".

The nine goals sit under three subjects - business, brand and "trust".

Under "business", Danone has set goals to "offer superior food experiences and innovate, always", to "deliver superior sustainable profitable growth" and to be certified as a B Corp by 2030.

Under "brand", the Silk owner said it wants to "impact people's health locally", to "preserve and renew the planet's resources" and grow its "manifesto" brands.

Faber explained how he wanted all Danone's brands to be eventually described as such. He pointed to the company's decision to only use non-GMO feed for the products sold under its three main brands in the US - Dannon, Oikos and Danimals.

"The first brand that moved in that space is Danimals and that has been an incredible success. Going fully Non-GMO and with the Non-GMO Verified logo on the brand has allowed the brand to go from 33% to 42% market share with a nearly 10% growth last year."

Under "trust", Danone wants to "entrust" its staff "to create new futures". The company also said it would look to "foster inclusive growth" and "serve the food revolution with partners".

All of the nine goals will be "aligned" with the UN's 2030 Sustainable Development Goals.