Blog: Dean BestDanone's note of caution from a despondent Davos

Dean Best | 31 January 2009

"Here in Davos everybody is deeply pessimistic. I have not met one single optimist."

This was the somewhat gloomy description of this year's World Economic Forum by Bert Heemskerk, the chief executive of Rabobank.

This week, the world's political and business leaders have headed to the Swiss ski resort for their annual discussions on the global economic climate – and, of course, there is a lot more to discuss than usual.

Reuters has hand-picked some of the more “eye-catching” quotes from Davos, including the rather bleak assessment from the Rabobank boss.

Danone chairman and CEO Franck Riboud was also among the great and good at Davos, where he spoke about the French food giant's project in Bangladesh, which was set up two years ago to make affordable dairy products for local consumers.

However, aside from Danone's notable work on sustainability projects, Riboud was also asked about the company's prospects for 2009. For the Activia-to-Evian maker, the tone for the next 12 months seems to be one of caution.

“Like everyone else, I am putting brackets around 2009,” Riboud said in an interview with French news channel France 24 earlier this week (French-speakers can see the full interview here).

Riboud said Danone was keeping its medium-term targets but said it would be wrong to set objectives for 2009. An assessment, Riboud said, should be made at the end of January because “everything is moving in every direction”.

Instead of setting targets, Riboud said management should have the right tools to handle every situation that could come before it.

“We must have a foot on the accelerator where things go well and a foot on the break where things go wrong,” Riboud said.

Riboud's comments come just a couple of weeks before Danone publishes its full-year results for 2008. We should expect Danone to give some of its thoughts on how it sees the economic landscape in 2009.

Next week, Danone's peer Unilever, the Anglo-Dutch consumer goods giant, reports its own 2008 numbers – and hand down its own outlook for the year ahead.

Given the rather mixed numbers issued yesterday (30 January) by Procter & Gamble, industry watchers will be waiting with baited breath for Unilever to kick off the reporting season for Europe's largest firms.


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