Food giant Danone SA risks becoming “irrelevant as a global player” without a strong commitment to and presence in India, a rapidly growing market and key growth driver for many multinational consumer goods companies, according to chief executive Antoine de Saint-Affrique.
“India͏͏ is͏͏ our͏͏ top͏͏ priority,”͏͏ he͏͏ stated.͏͏ “If͏͏ we͏͏ don’t͏͏ achieve͏͏ significant͏͏ presence͏͏ in͏͏ India͏͏ within͏͏ the͏͏ next͏͏ 10,͏͏ 15,͏͏ or͏͏ 20͏͏ years,͏͏ we͏͏ will͏͏ become͏͏ irrelevant͏͏ as͏͏ a͏͏ global͏͏ player.͏͏ It’s͏͏ as͏͏ straightforward͏͏ as͏͏ that.”
Danone’s͏͏ chief͏͏ executive͏͏ noted͏͏ that͏͏ the͏͏ company’s͏͏ optimism͏͏ stems͏͏ from͏͏ India’s͏͏ stable͏͏ political͏͏ environment͏͏ and͏͏ focus͏͏ on͏͏ infrastructure͏͏ development.
“We’re͏͏ not͏͏ as͏͏ prominent͏͏ as͏͏ we͏͏ should͏͏ be,͏͏ and͏͏ the͏͏ culture͏͏ of͏͏ India͏͏ aligns͏͏ perfectly͏͏ with͏͏ the͏͏ needs͏͏ of͏͏ other͏͏ countries.͏͏ This͏͏ discrepancy͏͏ is͏͏ something͏͏ I͏͏ cannot͏͏ tolerate͏͏ for͏͏ long.͏͏ We͏͏ are͏͏ actively͏͏ working͏͏ to͏͏ ensure͏͏ India͏͏ reaches͏͏ its͏͏ full͏͏ potential,”͏͏ said͏͏ de͏͏ Saint-Affrique͏͏ during͏͏ his͏͏ visit͏͏ to͏͏ India.
Continue͏͏ Exploring:͏͏ Danone India͏͏ appoints͏͏ Shashi͏͏ Ranjan͏͏ as͏͏ its͏͏ managing͏͏ director
Nutrition͏͏ Segment͏͏ as͏͏ a͏͏ Priority:
Globally,͏͏ Danone͏͏ operates͏͏ in͏͏ four͏͏ key͏͏ areas:͏͏ essential͏͏ dairy͏͏ products,͏͏ plant-based͏͏ offerings,͏͏ specialised͏͏ nutrition,͏͏ and͏͏ water.͏͏ However,͏͏ in͏͏ India,͏͏ the͏͏ French͏͏ producer͏͏ of͏͏ Activia͏͏ yoghurt,͏͏ Aptamil͏͏ baby͏͏ food,͏͏ and͏͏ Evian͏͏ water͏͏ has͏͏ primarily͏͏ concentrated͏͏ on͏͏ the͏͏ specialised͏͏ nutrition͏͏ segment,͏͏ including͏͏ brands͏͏ like͏͏ Protinex͏͏ and͏͏ Dexolac.
After͏͏ ending͏͏ a͏͏ 13-year͏͏ partnership͏͏ with͏͏ Nusli͏͏ Wadia-owned͏͏ Britannia͏͏ in͏͏ 2009͏͏ due͏͏ to͏͏ a͏͏ legal͏͏ dispute,͏͏ Danone͏͏ launched͏͏ its͏͏ nutrition͏͏ business͏͏ in͏͏ India͏͏ in͏͏ 2012͏͏ by͏͏ acquiring͏͏ the͏͏ nutrition͏͏ portfolio͏͏ from͏͏ Wockhardt͏͏ Group.
Past͏͏ Challenges͏͏ in͏͏ Dairy͏͏ Sector:
In͏͏ 2010,͏͏ Danone͏͏ independently͏͏ entered͏͏ the͏͏ Indian͏͏ dairy͏͏ market͏͏ but͏͏ exited͏͏ the͏͏ business͏͏ eight͏͏ years͏͏ later͏͏ due͏͏ to͏͏ its͏͏ inability͏͏ to͏͏ compete͏͏ with͏͏ large͏͏ cooperatives͏͏ like͏͏ Amul͏͏ and͏͏ Mother͏͏ Dairy,͏͏ which͏͏ had͏͏ advantages͏͏ in͏͏ pricing͏͏ and͏͏ sourcing.
On͏͏ Wednesday,͏͏ Commerce͏͏ and͏͏ Industry͏͏ Minister͏͏ Piyush͏͏ Goyal͏͏ stated͏͏ that͏͏ dairy͏͏ is͏͏ a͏͏ sensitive͏͏ sector,͏͏ and͏͏ India͏͏ does͏͏ not͏͏ intend͏͏ to͏͏ offer͏͏ duty͏͏ concessions͏͏ in͏͏ free͏͏ trade͏͏ agreements.
Danone,͏͏ the͏͏ world’s͏͏ largest͏͏ player͏͏ in͏͏ fresh͏͏ dairy,͏͏ stated͏͏ that͏͏ it͏͏ does͏͏ not͏͏ wish͏͏ to͏͏ comment͏͏ on͏͏ tariffs͏͏ in͏͏ a͏͏ segment͏͏ where͏͏ it͏͏ currently͏͏ lacks͏͏ a͏͏ presence͏͏ in͏͏ India.͏͏ “We͏͏ do͏͏ not͏͏ produce͏͏ fresh͏͏ dairy͏͏ in͏͏ all͏͏ countries͏͏ and͏͏ won’t͏͏ disclose͏͏ any͏͏ plans͏͏ regarding͏͏ which͏͏ category͏͏ we͏͏ might͏͏ enter.͏͏ Our͏͏ production͏͏ in͏͏ India͏͏ is͏͏ primarily͏͏ for͏͏ the͏͏ Indian͏͏ market,͏͏ and͏͏ we͏͏ are͏͏ leveraging͏͏ our͏͏ ecosystem͏͏ in͏͏ a͏͏ systematic͏͏ manner.͏͏ You͏͏ can͏͏ see͏͏ significant͏͏ opening͏͏ up͏͏ of͏͏ India͏͏ to͏͏ the͏͏ world,”͏͏ said͏͏ de͏͏ Saint-Affrique.
Competing͏͏ in͏͏ Nutrition͏͏ Markets:
In͏͏ India,͏͏ Danone͏͏ competes͏͏ with͏͏ Nestle͏͏ and͏͏ Abbott͏͏ in͏͏ the͏͏ baby͏͏ and͏͏ adult͏͏ nutrition͏͏ sectors.͏͏ The͏͏ company͏͏ announced͏͏ an͏͏ investment͏͏ of͏͏ over͏͏ INR͏͏ 20͏͏ million͏͏ in͏͏ its͏͏ factory͏͏ in͏͏ Lalru,͏͏ Punjab,͏͏ to͏͏ expand͏͏ its͏͏ specialised͏͏ nutrition͏͏ business͏͏ in͏͏ a͏͏ market͏͏ where͏͏ 23͏͏ million͏͏ babies͏͏ are͏͏ born͏͏ each͏͏ year͏͏ and͏͏ nearly͏͏ half͏͏ a͏͏ billion͏͏ people͏͏ are͏͏ projected͏͏ to͏͏ reach͏͏ 65͏͏ years͏͏ of͏͏ age͏͏ by͏͏ 2030.
“If͏͏ you͏͏ consider͏͏ our͏͏ current͏͏ offerings,͏͏ those͏͏ categories͏͏ are͏͏ far͏͏ from͏͏ reaching͏͏ the͏͏ scale͏͏ needed͏͏ for͏͏ India,”͏͏ said͏͏ de͏͏ Saint-Affrique.͏͏ “That͏͏ doesn’t͏͏ mean͏͏ we͏͏ won’t͏͏ explore͏͏ other͏͏ categories͏͏ in͏͏ the͏͏ future.͏͏ We͏͏ haven’t͏͏ even͏͏ begun͏͏ to͏͏ consider͏͏ areas͏͏ like͏͏ medical͏͏ nutrition,͏͏ where͏͏ we͏͏ are͏͏ global͏͏ leaders.͏͏ However,͏͏ there͏͏ is͏͏ still͏͏ immense͏͏ potential͏͏ in͏͏ what͏͏ we͏͏ already͏͏ offer.”
