When French dairy food firm Danone ventured outside the troubled business climate of Europe and the US, it was not expecting to start a business that deliberately avoids paying dividends to shareholders.
But a meeting between Danone’s Franck Riboud and the founder of Grameen Bank, Nobel Peace Prize winner Muhammad Yunus, led to the opening of a small factory in Bangladesh that does just that.
Danone made a profit of more than $1bn in 2008 and expects that to rise by 10% this year, despite a downturn in sales in Europe.
The company has set its sights on South Asia. But to succeed there, it has to learn how to sell to low-income customers, many of whom live in the countryside.
In Bangladesh, Danone has teamed up with local experts to build a yogurt factory with a difference – what Professor Yunus calls a social business.
The factory, which produces nutritional yogurt for poor people, is a joint venture between Grameen and Danone.
Danone’s Emmanuel Marchant explains that the enterprise has to make enough money to be sustainable, but it also has a social goal.
“With a social business you ask: what are the priorities in terms of social needs?” he says.