Social Innovation

11 Nov 2010|Added Value

We are seeing new paradigms being developed that integrate the value of social entrepreneurship, virtuous eco-cycles and open source innovation. Which in turn is creating a growing sense of connectedness and interdependence that bodes well for business and for society. Jean-Pierre Rennaud, Environmental Director for the Danone Group, shares with us his conviction that social innovation is the way of the future and will deliver concrete benefits for Danone, its partners and the planet.

“When you are sailing and you are in irons,  that is the time to be planning what you will do when the wind returns” This is just as true in business and at Danone, we believe it is key to our future.

We need to evolve in order to build tomorrow’s growth levers.  Frequently, this evolution involves our suppliers.  Our most savvy farmer partners know that they should be evolving their methods to more sustainable ones. Yet can they afford to change in times of economic crisis? Many small farmers are in great difficulty. They earn little and they are often indebted.  How can we ask them to finance their own conversion to sustainable farming without being able to guarantee a return on investment?

Danone has created  what we call ‘development amplifiers’ that help our partners on the road to sustainable innovation while ensuring that they generate sufficient revenue en route.

We have put 100 million Euros on the table to enable our partners to realize their sustainable goals. We have local “scouts” who hunt for potential partners and projects that fit the needs of specific countries. Some of the projects involve packaging innovation, others are linked to product formulation, waste reduction and still others to sustainable farming. Of course we can’t finance everyone. But if we can prove that certain experiments work, that there is a virtuous cycle to be created, then we can boost the impact of our investments from a scale of 10 to 100 to 1000. This isn’t charity. It is social innovation.

One such example shows the promise of upscaling: in Mexico, we are co- financing a factory to treat  PET Packaging waste collected by locals so that it can be recycled into new bottles .  If the business model proves to be viable, it can then be exported to others countries such as Indonesia and Argentina .

In France, we have developed a lab project with  one of our farmer partners who wanted to develop a business to sell the energy from methane capture to the national power company. The latter only accepts 5-10 year contracts and thus the window was closed. We helped him to finance the construction of a biomethaniser and a greenhouse. He has used the energy captured from the former to heat the latter, thus allowing him to extend his growing season and increase his revenues at no supplemental cost.

These are just a few examples of the increasing number of development projects in which we are investing.  It is our belief that a leader must lead. In the case of Danone, social responsibility is in our genes.  We have always considered that our growth must to happen in a way that supports our “ecosystem”.  Our conviction is that social innovation is the way of the future and that our role is to boost this development for the benefit of our partners, our planet and our business.

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