COMPANY PROFILE -Danone
Business Sector :FMCG, Food Processing
Operating Geography :France, Europe, Global
About Danone :
Danone is a French food and beverage company established in 1919. Headquartered in Paris, it is a global frontrunner in Essential Dairy and Plant-Based Products, Waters, Early Life Nutrition and Advanced Medical Nutrition. The group has its operations in more than 120 markets and has more than 100,000 employees as of December2017. The company is listed on Euronext Paris where it is a component of the CAC 40 stock market index. It ranks #58 in Forbes’ World’s most valuable company brands and #135 in the Top Multinational Performers. In the year 1919, Spanish children were infested with severe intestinal infections. Observing this Isaac Carasso introduced a yogurt for its nutritional benefits and named it Danone after his son Daniel. This gave birth to the Danone brand. Today,Danone is the seventh largest food company in the world, third largest in Europe and the leading food company in France, Italy and Spain. Amongst its 4 core businesses (dairy product, waters, life nutrition and medical nutrition) Danone ranks number one for its dairy products worldwide. Stagnant revenues over the last five years and the highly expensive acquisition of WhiteWave Foods in 2017 has resulted in flat performance for Danone's stock as of 2018.In 2018, the Danone companies in North America and Canada succeeded in achieved B CorpTM Certification, this achievement leads to 30% of Danone’s global business being certified.
Danone’s vision statement is ‘Danone, One Planet. One Health’. Danone’s mission reads ‘Bringing health through food to as many people as possible’.
Danone claims that its USP or unique selling proposition is that “The Company relies on a unique portfolio of strong brands, solid execution capabilities in terms of innovation, brand activation and the development of new distribution channels. Positioned in the most dynamic categories of the food and beverage industry, Danone has a strong leadership position in all its markets.”
Danone Revenue :
€24.7 billion (FY ended Dec 31st 2018)
€24.7 billion (FY ended Dec 31st 2017) (y-o-y growth 12.78%)
€21.9 billion (FY ended Dec 31st 2016)
Ownership / Major shareholders :
Loomis, Sayles & Co- 0.94%, John W. Bristol & Co – 0.13%
Competitive Analysis of Danone
The SWOT / TOWS analysis is a strategic planning tool that helps assess the internal and external factors which influence the company’s micro and macro environment. SWOT analysis is a useful technique to analyze the present strength, weakness, opportunity, and threats alongside their impact on the current business model of the Danone group.
Danone is the global leader in domains like the dairy products and bottled waters. It ranks number #2 in the baby food segment. Danone’s target group of audiences is the urban families belonging to middle and/ or upper-middle class. The company strives to be globally recognized as a brand that provides healthy products of supreme quality. Danone operates in 4 prominent domains with market share distribution in 2015as follows - 50% in dairy products, 21% in waters, 22% in early life nutrition and 7% in medical nutrition. The board portfolio of products is a major strength of the Danone group. Apart from this, the company is known for strengths like supreme quality, healthy food products, a strong employee base of 100,000+, global leader in dairy products, pioneer in introducing healthy yogurt, strong financial muscle and these also lend a competitive advantage to Danone
Danone has the highest market share in the dairy segment but increasing raw material cost is leading to a rise in the cost of end products, affecting the overall revenue and dropping of sales. The company’s high dependency on the Asian market (Especially China and India) is another weakness, as the demand for costly Danone products is declining in these markets. There is a huge opportunity for the expansion of the Danone company in markets with emerging economies, in western countries. People are preferring Greek yogurt over the regular one and are shifting towards healthier options, hence sales are expected to grow in future. Acquisition and mergers, extension of new products and expansion in market share in developing countries can act as some great opportunities for Danone’s growth. Increase in raw material cost, competition from global players of food and beverage industry, and cheap alternatives from local suppliers are some of the major threats to the Danone group
The SWOT analysis of Danone is presented below in a nutshell followed by the detailed analysis.
| Strengths | Weaknesses |
1. Strong presence in specialized nutrition segment
2. Wide product Portfolio
3. Solid International footing
4. Brand recognition with popular brands
5. Efficient distribution network
| 1. Lacklustre performance in dairy segment
2. Overdependence on Limited Suppliers |
| Opportunities | Threats |
1. Expansion opportunities in emerging economies
2. Acquisition and Partnerships for viable and profitable expansions
3. New Product Development for product differentiation
| 1. Highly competitive food and beverage industry
2. Liquidity risks may increase financing costs
|
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Detailed SWOT Analysis of Danone
Strength
1. Strong presence in specialized nutrition segment: This segment sold under Nutricia’s umbrella brand, recorded the highest sales growth of 9.3% to 7.1 billion euros in 2017. It constitutes 29% of the group’s sales. It performed especially well in Asia. It offers products for the sensitive individuals from preterm birth to the old & for people with specific allergies. One of its highest selling component is specialized nutrition for infants to complement breast feeding which is 85% of Early Life Nutrition segment. Advanced Medical nutrition sales rose by 5% in 2017. This segment promotes synergies and space for further expansion as presently the products in this segment are limited to a few countries.
2. Wide product portfolio: Danone’s diversified product basket includes products ranging from essential dairy and plant-based products, packaged natural water and flavored and vitamin-enriched waters to early life nutrition and natural water and flavored and vitamin-enriched waters. These attractive categories are aligned with the changing consumer trends which puts the group on a sustainable and broad-based growth path. The renewal of production lines across these categories increase its market penetration and consumption across the globe. It also gives the group expansionary advantage and scalability.
3. Solid International footing: Danone is the global leader in fresh dairy products and plant-based products and second largest seller in early life nutrition and packaged waters by volume. 40% growth in e-commerce year-on-year was witnessed in 2018 and over 66% of EDP growth came via impulse channels. 66% of Danone’s sales contribution came from international sales in 2017. It has established a solid footing in the largest consumer base, China with 7% sales. USA with 18% and France with 9% sales of the group in 2017 have been the largest international market bases for the group. It has also increased the production capacity of Aptamil plants in New Zealand to tap the growing demand. Water sales in Latin America and North America remained strong, giving a fillip to the weak dairy segment performance in Europe. As of 2019, Danone products are available in 120+ countries across the globe.
The remaining section of Strengths is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
The PESTLE / STEEPL / PEST analysis report is a framework used to understand the impact of external factors on the macro environment that influences the business of Danone. The PESTLE analysis is a useful technique to analyze the present external factors like political, economic, social, technological, legal and environmental and their effect on Danone’s business model, growth trajectory, its business case, and market strategy.
By far, the political factors that are conceivably affecting the Danone company are the laws passed by the French government in 2005 to safeguard the minority shareholders. Government’s elevated interest for public’s health has positively contributed towards hiking Danone’s sales. Nations are having in place stringent regulations for food safety and changes in taxation policy due to the global crisis. Economic stability has enhanced the demand of high-quality food products amidst audiences with standard living. A decline in the supply of plastic can affect the packaging cost, especially in the beverage segment. High-level biotechnology is employed to improve the nutritive value of products, enhancement of proteins and vitamins in dietary supplements. These technological factors give an edge to Danone over its competitors as it is the oldest in the industry utilizing these factors for over a century. Danone’s vision of “One planet, One health” is creating a social impact and is being appreciated and promoted worldwide. People’s transition to better living and embracing healthier options will not only bring in sales but make Danone a global leader with a health focused portfolio in the food and beverage sectors. A major environmental issue is the scarcity of drinking water worldwide. this will have a positive impact by increasing sales in Danone waters division. The legal dispute between Danone and the Hangzhou Wahaha Group, regarding the Wahaha joint venture, has adversely affected the beverage sales in the Asia-Pacific region.
The PESTLE/ PESTEL/ STEEPL analysis of Danone is presented in the matrix below followed by the detailed analysis:
| Political | Economical |
| 1. Lobbying for favourable policy framework | 1. Negative impact of economic slowdown in operating regions on sales
2. Impact of Currency Fluctuations
|
| Social | Technological |
1. Lifestyle changes to skew demand towards healthy foods
2. Employee engagement
3. Inclusive growth
| 1. Data Analysis to capitalize flexible marketing opportunities
2. Leveraging digital technology for tailored nutrition
|
| Legal | Environmental |
1. Threat of legal proceedings due to anti-competitive practices
2. Excessive legal compliance in all segments
| 1. Sustainable Practices |
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Detailed Pestle Analysis of Danone
Political
This section is available only in the 'Complete Report' on purchase.
Economical
This section is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
1. Data Analytics to capitalize flexible marketing opportunities: Danone is using Google Analytics and fast prototyping to understand thee changing demand pattern for new products and flavors. It has developed Lemonades for selective Chinese regions through these tools. It aligns the flexible marketing opportunities with in time delivery and innovation of the products in-demand to match consumer needs. Ser in Argentina, Dan’Up in Mexico and France’s Les 2 Vaches’ sales growth doubled in 2017 as Danone tapped local brands were fine-tuned as per regional relevance using data analysis. It gives them competitive advantage to capture local trends and innovate faster which helps them in keeping their market leadership across its operating zones.
2. Leveraging digital technology for tailored nutrition: Advanced digital technologies such as big data and machine learning can generate valuable insights which can be used to create innovative products and solutions. Danone Nutricia Research in 2018 started a new Precision Nutrition D-Lab at Singapore which will be an innovation hub and focus on advanced digital technology to provide tailored nutritional care in early life. Technologies such as big data and machine learning will be leveraged to create products that can meet infant nutrition needs better. The lab is also working on other digital solutions such as an app which can monitor infant stool consistency and the impact of supplements and other nutrition products on the same. These initiatives will help Danone strengthen its footprint in the infant nutrition technology and help it generate increased customer satisfaction.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
This section is available only in the 'Complete Report' on purchase.
Major Brands :
Activia, Actimel, Alpro, Aptamil, Danette, Danio, Danonino, evian, Nutricia, Nutrilon, Volvic, AQUA, Blédina, Bonafont, Cow & Gate, Horizon, Mizone, Oikos, Prostokvashino, Silk and Vega.
Key Business Segments / Diversification :
Danone
Essential Dairy and Plant-Based Early Life Nutrition Waters Advanced Medical Nutrition
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
Open Table Preview
| Name | Business Segment | Year | Type | Objective/Synergy Achieved |
| WhiteWave Foods | Consumer packaged food and beverage | 2017 | Acquisition | Strengthened Danone’s product offering in organic and plant-based products |
| Stonyfield | Organic foods | 2017 | Divestiture | To avoid anti-trust claims for the more significant WhiteWave acquisition |
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
The Danone SWOT and PESTLE Analysis report will offer the following:
- The SWOT and PESTLE analysis report of Danone presents an understanding of the complex internal and external factors affecting the brand and its operations
- Core competitive advantages relished by Danone over its rivals and competitors from the Food and beverage industry
- A brief overview of Danone’s business profile, number of employees, owners & stakeholders and revenue jumps
- Overall company analysis to gain acquaintance about company information, company profile, business model, business plans and marketing strategy
- Study of Danone’s USP or unique selling proposition, mission statement and vision statement that has made it a global leader in the food and beverage industry
- The SWOT Analysis framework facilitates the company to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats
- Intelligence on Danone's share price, mergers and acquisitions, strategic partnerships and alliances which will state details about the synergy achieved and how these acquisitions contributed to the growth of the Company.
- Utilizing PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their influence on the performance of Danone group
- Understanding of how Danone has leveraged the strength of technology and supply chain management to keep competition at bay.
- A peek into the Danone’s key performance indicators, success factors, value proposition and core competencies
- Danone’s case study which gives intelligence into Danone's business model and how it manages to outstand competition.
- Insights about micro and macro factors through internal and external analysis
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References used in Danone SWOT & PESTLE Analysis Report
1. https://danone-danonecom-prod.s3.amazonaws.com/user_upload/Investisseurs/Company_s_Reports/2018/Danone_-_Registration_Document_2017.pdf
2. https://danone-danonecom-prod.s3.amazonaws.com/Danone_-_Registration_Document_2017.pdf
3. https://www.foodnavigator.com/Article/2017/11/17/Danone-focuses-climate-efforts-on-regenerative-agriculture
4. https://www.caissedesdepotsdesterritoires.fr/cs/ContentServer/?pagename=Territoires/Articles/Articles&cid=1250281122713
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Danone SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.
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