Innovation and Productivity
OVERVIEWPACKAGINGRAWS / RECIPES INDUSTRIAL DESIGNCUSTOMER SERVICE AND LOGISTICSCONCLUSION
Productivity – COGS, non-COGS, cash & Capex
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SUPPLIERS MANUFACTURING LOGISTICS CUSTOMERS’WAREHOUSES
CUSTOMERS’SHOPS
SHOPPER / CONSUMER
Opportunity M€
2011 Danonebrand target
Best in classBenchmark
M€
Cost & cashStretchthe Model
Change the Model
Do more with less
Innovate and change
Buy Better
Each Division has it’s own COGS focus
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WatersDairy
MedicalBaby
Raw materials
Packaging
Industrial
Logistics
Innovation and Productivity
OVERVIEW
PACKAGINGRAWS / RECIPES INDUSTRIAL DESIGNCUSTOMER SERVICE AND LOGISTICSCONCLUSION
Lightweighting PET Bottlesusing new technologies
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Evolution of Hayat 0,5 L bottle weight
1614.9
12.912.1
11.4 10.9
0
2
4
6
8
10
12
14
16
18
2004 2006 2009 2010 2011 2012
Driven by technology upgrades
Weight optimisation Preform
technology
Shortneck
New bottle
New elimination
bottle
Do more with less
Innovate and change
Buy Better
Ensure consumer preference and logistics performance
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Do more with less
Innovate and change
Buy Better
Key Success factors:- Keep the same consumer preference
- Lightweight to the max thanks to new technologies
Outputs:- 7,500T of PET saved in 2010
- 25,000T CO2 emission reduction
Thickness and weight distribution
Thickness & weight distribution 12.7 gr & 11.3 gr Adana blowing
1.9 gr 2.1 gr1.4 gr 1.7 gr
2.9 gr
2.8 gr1.4 gr1.3 gr
4.5gr4 gr
Push to the max the Technologies to lightweight our Actimel Bottles
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Do more with less
Innovate and change
Buy Better
Key Success factors:- Consumers studies to permanently check the preference
- State of the art technical management at Graham & Danone Side (R&D/Ind)
Outputs:-Bottle weight divided by 2 since the Actimel Launch in 1996 ( 39kt HDPE saved)
- CO2 reduction equivalent 130 KT saved since 1996
Bottle weight evolution
?
• Started at 9g of HDPE in 1995 today produced in 6.0g and with a worldwide target of 5.5g (Poland already at 5.2gr)
• Combined with High speed blowing machine developed by our Partner (Graham Packaging) to meet our growth
• Optimizing cardboard surfaces and label thickness
Push to the max the Technologies to lightweight our Polystryrene Cups: FOAM project
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Do more with less
Innovate and change
Buy Better
Key Success factors:- State of the art in bubble size & repartition management at the supplier stage
- Machines well equiped & maintained to deliver the best performing cups
Outputs:- 12 to 14% less plastic for the same performance & Consumers preference
-19% less CO2 emission for the Packaging, 40 KT to date. € 7 mln COGS savings
Foam Volumes Evolution Europe
4,830 9,000 13,400 23,560 16%
28%38%
54%
2008 2009 2010 2011
Foam (T) % lines
The middle one is expanded thanks to a Foaming agentDensity 0.65
Two “standard” layersDensity 1.05
A 3 layer PS
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Do more with less
Innovate and change
Buy Better
Visite PDB
Press
KOLsTeasing
CRM
TV
Packaging
Distribution
Web
Removing the carton pick ups - a project that required massive 360° communication to consumers
Removing the carton pickups- a real business success story
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Do more with less
Innovate and change
Buy Better
+4% +9% +16% +15%
Innovation and Productivity
OVERVIEWPACKAGING
RAWS / RECIPESINDUSTRIAL DESIGNCUSTOMER SERVICE AND LOGISTICSCONCLUSION
Project Jumbo baby food
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• Anticipate reglementationevolution
• Better nutrition• Better ingredients • 81 Recipes, 1000 labels
for 35 CBUs in 9 months
Project JUMBO: Recipe/Formula upgrades
PRODUCT DEVELOPMENT & OPERATIONS
• 81 Recipes improved, 12,000 hrs R&D/PD • Complexity reduction
(15 recipes and 5 base-powders less)• No impact on
customer service and low write-offs
Do more with less
Innovate and change
Buy Better
Smaller volumeSame nutrition in 125ml bottle as in original 200ml bottle
Innovation in Protein Technology
Innovation that improves patient compliance at a lower cost price and less packaging
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Do more with less
Innovate and change
Buy Better
• Reduction in size of protein fraction reduces viscosity of high protein nutrition
• Less packaging material
• Reduced conversion costs
• 20% reduction in carbon footprint at production level
• Improved patient compliance
• Improved intake
TransformationTraditional use of milk
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Skimmedmilk
Sweet whey
Acid whey
Cream è Butter
Skimmer
Directly to cheese
WPCsWheyPowders
SMPBlends
Feed1Lt for each1kg of product
Do more with less
Innovate and change
Buy Better
What is Membrane technology?
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MEMBRANE FILTRATION
WHEYPROTEINS
PROTEINS LACTOSE + MINERALS
LACTOSE MINERALS
Other optional filtration step Other optional filtration step
CASEIN
SKIMMED MILK
Do more with less
Innovate and change
Buy Better
TransformationTodays use of milk
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Skimmedmilk
Whey
By-Products
Cream è Butter
Skimmer
Directly to cheese WPCsWheyPowders
SMPBlends
Crackingmilk
InnovationDrinks
Cream desserts
Optimise salesEg cream
ExcessComponents
Casein
Whey
Minerals
Lactose
Water
Do more with less
Innovate and change
Buy Better
Innovation and Productivity
OVERVIEWPACKAGINGRAWS / RECIPES INDUSTRIAL DESIGN
CUSTOMER SERVICE AND LOGISTICSCONCLUSION
Danone Eaux FranceCarrefour Miramas case
1st common warehouse between 1 supplier & 1 customer in France, supplied by full trainsWarehouse with 2 functions:- Deliver 123 Carrefour stores Just In Time- Deliver other Danone customer warehouses
Benefits: CO2 reduction/ Service / Innovation/ Customer intimacy/ positive media coverage
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Do more with less
Innovate and change
Buy Better
21%
9%
37%
16%
17%
Increasing on-shelf availability
– 20 –
Buy another flavour
Buys product later
Buy other brand
Doesn’t buy at all
Buys in other store
30% sales lostby the Retailer
46% sales lost bythe Manufacturer
Do more with less
Innovate and change
Buy BetterFOR ALL
Shopper behaviour when product is missing on shelf (ECR Europe)
€ 4 bn of saleslost in Europe
Store or Field Alert
Store Order Control
Danone Store Alert
Danone Sales Force
Customer Store Team
In StoreExecution
OSA proven solutions
E-Pos DataDanone
Store OrderDanone
WarehouseTo Store Delivery
Do more with less
Innovate and change
Buy BetterFOR ALL
Customer Warehouse
E-Pos Data
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Innovation and Productivity
OVERVIEWPACKAGINGRAWS / RECIPES INDUSTRIAL DESIGNCUSTOMER SERVICE AND LOGISTICS
CONCLUSION
Innovation & Productivity – Summary
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Stretchthe Model
Change the Model
Do more with less
Innovate and change
Buy Better
A track record of deliveryInnovation and productivity go together Inno gives sustainable productivity perspectives Our culture of labbing and landing provides vivid pipeline filling and roll out Innovative and cost efficient formulas will provide ground for further growth opps in emerging AND developped market
SUPPLIERS MANUFACTURING LOGISTICS CUSTOMERS’WAREHOUSES
CUSTOMERS’SHOPS
SHOPPER / CONSUMER
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