Danone’s yogurt strategy for Bangladesh

Milk being delivered in churns to the factory in Bogra

Nobel Peace Prize winner Profesor Muhammad Yunus
BBC NEWS | Business | Danone’s yogurt strategy for Bangladesh

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.

Targeting malnutrition

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.

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