GRAMEEN DANONE FOODS LTD.

A Social Business Enterprise

GRAMEEN DANONE FOODS LTD.

A Social Business EnterpriseA unique “community” modelA unique “community” model

Total population: 144 million - 80% rural

41% aged below 14Average family size: 4.9GDP / cap : 600$ a year

(Indon.: 1,200$)Density 1000 p. / km²

Sources : 2004 statistical yearbook of Bangladesh, 2005 estimates on total population, household income per day

€2.9-4.1 a day(233-333Tk)

<€1 a day (<83Tk)

€2-2.9 a day

(167-232Tk)

Country background: population pyramidCountry background: population pyramid

Grameen DanoneProject

11%11%

>€4.1 a day(>333Tk)

16%16%

22%22%

14%

37%37% €1-2 a day

(83-166Tk)

Key health/nutrition concerns in BangladeshKey health/nutrition concerns in Bangladesh

Micro Nutrition Issues

- Iron (49% among young Iron (49% among young children)children)- Vitamin B2Vitamin B2- CalciumCalcium- Vitamin CVitamin C- Vitamin AVitamin A- Iodine and zinc likelyIodine and zinc likely

Health Concerns

- Stunting (41% of young children) - Diarrhoea- Polluted water (arsenic, bacteria)

Source: Grameen/local NGOs

Macro Nutrition Issues

- 87% of protein source is vegetal (lentils and beans), deficiency in essential amino-acids likely

- Overall energy deficiency, particularly among young children (between 24% and 40% gap vs RDA)- Protein deficiency

Grameen Danone: project objectivesGrameen Danone: project objectives

Reduce poverty by a uniqueproximity business model whichbrings daily healthy nutrition

to the poor

Reduce poverty by a uniqueproximity business model whichbrings daily healthy nutrition

to the poor

the mission

4 objectives4 objectives

Improve living conditions of the poorest in the community by involving them in all stages of the business model

Profitability to ensure return on capital and sustainability

Preserve natural resources as much as possible

Health through nutrition at a very affordable price for all Bangladeshi children

Key contributionsKey contributions

Technical expertise and assistance in local regulatory environment, micro-credit financing, agriculture mgt,

distribution and consumer education

Technical expertise and assistance in local regulatory environment, micro-credit financing, agriculture mgt,

distribution and consumer education

Grameen (50%)

Technical expertise in R&D, nutrition, manufacturing, quality, marketing

Technical expertise in R&D, nutrition, manufacturing, quality, marketing

Danone (50%)

Technical expertise in fortification, nutrition marketing, efficacy study

Technical expertise in fortification, nutrition marketing, efficacy study

GAIN

I want my children to be strong and healthy so that they can succeed with their activities today and in the future

It is sweet and deliciousmade from fresh milk, which brings proteins, calcium and phosphorusfortified with 30% daily needs in vitamin A, Zinc, iron, iodinecontains live ferments which help a good functioning of the intestine

Available at 5 Tk or 0,06 €

Product conceptProduct concept

Community business model : executionCommunity business model : execution

Proximity : 25km radius (ie 20km max. rickshaw + 5km max. pedestrian)

Based on village density, 2,500t min. potential p.a.

Local milk sourcing : 500 micro-farms, 2000 cows, doubling milk productivity

Mini plant : deskilled and manualized process to maximize number and type of jobs created

Sales and distribution : 1,000 to 2,000 Grameen ladies + 700 shops

High speed from idea to launchHigh speed from idea to launch

Phase

1

Phase

2

Phase

3

Phase

4

Phase

5

Preparation

(Nov. 29th

2005

workshop)

Immersion

and

information

gathering

Concept

definition

&

business

plan

Product

developme

nt

First

implementatio

n, then scale

up

March 16th 2006

MOU

March 16th 2006

MOU

We are hereWe are here

One year from day 1 of the project to actual launch!

Les producteurs de laitLes producteurs de lait

On entre : On entre :

Zoom sur le logoZoom sur le logo

“Zidane” plant“Zidane” plant

Mini plant 3,000 tons max. capacity, 1 SKU

Deep functionality analysis, zero-base design

Deskilled process enabling job opportunities

Environment friendly : Gas as primary source for energy ; Solar as significant secondary

Rain water recycling

Water treatment station

Récupération d’eau de pluie: Récupération d’eau de pluie:

Le solaire pour la chaudière: Le solaire pour la chaudière:

Station d’épuration…

Récupération du gaz

Formation de la force de vente : Formation de la force de vente :

Sampling dans les écolesSampling dans les écoles

De l’usine au Centre de Distribution De l’usine au Centre de Distribution

La chaîne du froidLa chaîne du froid

Les points de venteLes points de vente

Les clientsLes clients

Proximity and Nutrition marketingProximity and Nutrition marketing

Social impact KPIsSocial impact KPIs

Example : GAIN’s efficacy study

Objective:Evaluate the impact of a fortified vs non-fortified yogurtEvaluate the impact of a fortified yogurt vs no regular yogurt consumption at all

Specifics:Evaluate the impact of the fortified yogurt on morbidity, growth, cognitive development and status indicatorsOver periods of 6 months and one year

Principal investigator: Sunil Sazawal MD, MPH, PhDPrimary Institution: Johns Hopkins university, USACollaborating Institution: Center for Micronutrient Research, IndiaPartnership: GAIN (funding and technical advising)

10-year dream10-year dream

100 MM€ sales, pay-back on capex on a 3-5 year period, requiring constant model reengineering (pack, size, prices)

20-25% pop. weekly penetration

30 to 50 plants covering half of 62,000 villages

50 to 100,000 sales and distribution jobs created.

25,000 farm jobs created

Replicated in most rural areas (co-owned basis)