danone.communities : a great idea for social entrepreneurship

This idea is currently illustrated by our small factory that exudes enthusiasm and energy ! The factory allows hundreds of people to work and improve their living conditions while producing nutrient-enriched yogurt that everyone can afford. It is happening in the Bogra region of Bangladesh. Explanations.

A factory : “Grameen Danone Foods”

The Grameen Danone Foods logo

Our factory bears the name “Grameen Danone Foods” because it is a joint venture between Danone and Grameen Bank, an institution that is very well-known among Bangladeshis and present in every village, and which became famous worldwide after its founder, Muhammad Yunus, was awarded the Nobel Peace Prize in 2006.

Grameen Bank (co-holder of this Nobel Prize) is the world’s leading bank for micro-credit, a renowned lending system that enables the very poor to start a small agricultural, trade or commercial business. It has allowed millions of Bangladeshis - and particularly women – to increase their income and improve their living conditions.

In practice, our production facility uses Danone’s know-how in technical areas (construction, plant maintenance, milk collection management, yogurt production, etc.), while the marketing of our yogurt is handled by women who are Grameen Bank customers wishing to supplement their income - the “Grameen Ladies”.

A product : “Shokti Doi”, yogurt that builds strength !

Shokti Doi in Bengali means “that which builds strength”. It is the name that we have chosen for our product. This product is designed to provide nutrients essential to the health of the Bangladeshi population, and most of all children.

Two figures speak for themselves :
- 56% of Bangladeshi children under the age of 5 suffer from moderate to severe malnutrition ;
- 21% of these children are significantly underweight.

In an effort to develop a yogurt that could truly benefit all these children in the Bogra region, we called upon GAIN – an NGO dedicated to fighting malnutrition around the world – to conduct a detailed analysis of their nutritional deficiencies. The results showed a deficiency in many nutrients, including vitamin A, iron, and so on.

Shokti Doi takes all these deficiencies into account ; an 80 gram container alone provides 30% of a child’s daily requirements of vitamin A, iron, zinc and iodine. This concentration of nutrients in such a small container is a technical feat, but is only one of the benefits of our yogurt…

A principle : make Shokti Doi a nutritional food that everyone can afford

Feeding people and improving health through nutrition is all well and good, but it is important to reach everyone, especially the poorest individuals.

The other advantage of Shokti Doi is therefore its price : 6 euro cents. We calculated this price based on the lowest Bangladeshi income, less than 1 euro per day. To give you a general idea, 22% of this country’s population lives on this “amount” (if we can call it that), while 37% lives on 1 to 2 euros per day. At 6 euro cents (i.e. approximately 5 Taka, the local currency), our yogurt, as we see each day, is able to fulfill its nutritional mission.

A local economic model that creates jobs and additional income

The design of our factory is diametrically opposed to all western management principles : very little automation and a large staff to help create jobs (read Guy Cavelle’s account further on). However, in order for it to be viable, our project must be sustainable, and to be sustainable, it must be profitable. This means that we hire only the staff we need, as in any responsible business. But we use technologies that promote the use of manpower and can be easily repaired on site by local technicians.
A walk around our Bogra facility is an opportunity to become better acquainted with the managers. Here you will meet Probir Pumar Sarka, Plant Manager, Khandoker Mohammad Abu Sohel, Sales Manager, and many more in the future !

Our factory produces 3,000 tons of yogurt per year, an amount that will continue to remain about the same. By choice. Our number one goal is to create work for hundreds of dairy farmers living in the poor and extremely poor villages of the Bogra region. Our principle : have our veterinarians inspect breeders, who in turn breed more productive animals. They then sell us more milk, increase their revenues and provide a better life for their families.

As for selling the yogurt, this is mainly a door-to-door process, which is where our renowned “Grameen Ladies” come in, carrying their cooler bags filled with yogurt straight from the Grameen Danone Foods factory through the streets of Bogra. This also means extra income for these ladies.

All in all, we at Grameen Danone Foods have set four objectives for ourselves :

1. To develop a product that has high nutritional value and is affordable for the poorest individuals
2. To improve the living conditions of the population : jobs, income level, enhancement of the social fabric
3. To protect the environment and conserve resources
4. To ensure a sustainable economic activity

“Grameen Danone Foods is a unique opportunity to create a company with a strong social dimension, a business whose goal is not to maximize profits but to serve the interests of the population, yet without sustaining losses. This small-scale project may be the start of a whole new type of market that will change the economic foundations of the world.”
Professor Muhammad Yunus, President of the Grameen Group

“I strongly believe that our future depends on our ability to explore and invent new business models and new types of enterprise. For Danone, this partnership with a company as iconic and visionary as Grameen Bank is a great opportunity to make progress in that direction and take another huge step towards fulfilling our mission : to bring health through food to as many people as possible.”
Franck Riboud, CEO of Groupe Danone

Muhammad Yunus and Franck Riboud together in Bangladesh in November 2006

To learn more about danone.communities

ACCOUNT :

Guy Gavelle : “I just did the opposite of what I’ve been doing up to now.”

To build our factory, Guy Gavelle was the man to call. Danone’s Director of Production, Quality and Food Safety for Asia, Guy has built factories all over the continent, many of which were huge production facilities for equally huge markets. It goes without saying that he was a little surprised when we asked him to build our (very) small factory !

“In Bogra it was easy. I just did the opposite of what I’ve been doing up to now ! We built it in three months with only 700,000 euros. Normally, I work on facilities that are 50 to 100 times larger and fully automated. In Bogra, however, something less automated was needed that could accommodate more staff working at jobs for which most of them were not highly skilled. All in all, it was impossible to rely on existing plans or to use standard equipment, which was usually European. I had to find new Bangladeshi suppliers to provide us with appropriate solutions. This was a very exciting challenge for all of us. We also had to reduce operating costs as much as possible, have a positive environmental impact, and so on. For each problem, we had to come up with totally new solutions. What comes to mind is our use of gases from waste composting to light the factory. We even had to rethink the way in which we develop the product. Using sugar, for example, would have meant importing it, which would have been expensive and not profitable for the local economy. We therefore chose to use date palm molasses. We also had to deal with the lack of a cold chain between the milk collection points and the factory : we tracked down the perfect product for preserving the quality of the milk during transport. All these constraints required us to be more inventive and to really keep challenging ourselves ! Today, I know that some of these ‘far-out’ ideas will be applied elsewhere in the Danone group.”

Guy Gavelle