In my previous post, Danone’s sustainability and competitive advantages were discussed. Danone is a food and water company, a company with sustainability and regenerative agriculture at its core, and a B Corp and a company committed to human health. In addition to being a B Corp (Danone North America – Certified B Corporation – B Lab Global, n.d.), Danone is a company dedicated to the United Nation’s Sustainable Development Goals (UN’s Sustainable Development Goals, n.d.).
Danone was able to gain a competitive advantage by consistently pushing forward its missions of public health and environmental sustainability. Their “One Planet, One Health” vision is Danone’s current theme (UN’s Sustainable Development Goals, n.d.). In addition to their strong sustainability brand, Danone has a competitive advantage due to their Danone data hub and strong IT capabilities. Danone teamed up with Microsoft to offer a software product called the AI Factory, including the AI Factory for AgriFood, enabling start-ups to benefit from Danone’s “One Planet, One Health” initiative (Microsoft and Danone join forces for AI at the service of responsible agrifood, 2020). Additionally, Danone is investing in its own “future proof technology” in its IT and data science infrastructure to support operations, data collection, and data-driven decisions in the future (Danone, 2022). Danone also innovates in regenerative agriculture and in developing their circular economy, including innovation in waste management, recycling and bioplastics, supply chain management, and farming (Umapathy, 2020).
Danone uses a customer relationship management (CRM) system to manage email campaigns for their customers. They custom-tailor email campaigns to customer segments like pregnant women and to mothers (Creating a fully automated eCRM system for Danone, n.d.). Danone uses AI-driven social intelligence products like Linkfluence to analyze consumer habits and identify changes and new trends, which allows them to drive innovation. Linkfluence pulls data from social media and allows Danone to put customers first using social data (Linkfluence, n.d.). Danone leverages similar platforms like LiveRamp’s Safe Haven for eCommerce and online customer engagement (LiveRamp | Data Connectivity Platform, n.d.). Danone’s approach to social listening increases their social engagement and their ability to innovate based on customer needs and wants (Pham, 2021). Danone has developed 63 processes for engaging customers on social media, always using the customer’s name when addressing them. They have a dedicated team to manage their customer community. They private message consumers on social media, giving advice and having conversations with mothers and other consumers (Gilliland, 2016).
As a result, Danone is #1 in dairy, #1 in plant-based and #2 in infant nutrition markets. Danone is geographically distributed, and they have a wide geographic reach. They also have deep research and development experience. In addition to their sustainability credentials, their data hub, their communities, and their innovation, Danone has many attributes which are competitive advantages.
In fact, Danone’s CEO has the vision that it is “a business that creates economic value by creating social value.” Danone turns social and environmental factors into a value proposition. They have centralized around being only a healthy food company. The central value proposition is that Danone makes “healthy and sustainable products through innovation” (Kruglianskas, 2013).
Harvard Professor Clayton Christensen created the theory of disruptive innovation which has been used by companies like Intel and Salesforce. The theory of disruptive innovation indicates that these innovations start in low-end markets or new markets. Christensen also says that disruptive business models are often very different from their competitors (Christensen, Raynor, McDonald, 2015). Danone meets this definition in that they have a business model that is genuinely based upon delivering health and sustainability, rather than simply generating profit. Danone is an example of disruptive innovation in that their circular economy, including their innovations in waste management, recycling, bioplastics, and supply chain allows them to provide products in recycled containers, regardless of where they are produced. As they continue to innovate, they will accomplish a place where they are 100% recycled and highly sustainable. Currently, 70% of Danone’s business is covered by B Corp certification, but they are aiming for 100% in 2025 (B Corp – Danone, n.d.). Technology is an enabler of this innovation and disruption as Danone propels itself forward by creating its own data-driven supply chain on its own circular economy.
B Corp – Danone. (n.d.). Retrieved from https://www.danone.com/about-danone/sustainable-value-creation/BCorpAmbition.html
Christensen, C., Raynor, M., and McDonald, R. (2015, December). What Is Disruptive Innovation? Retrieved from https://hbr.org/2015/12/what-is-disruptive-innovation
Creating a fully automated eCRM system for Danone | Dataconversion. (n.d.). Retrieved from https://dataconversion.ie/case-studies/danone-e-crm
Danone. (2022, May 19). DANONE IT & DATA HUB – Future proof technology. Youtube. Retrieved from https://www.youtube.com/watch?v=wxI0-J2qL6k
Danone’s growth brands model – Danone. (2022, April 12). Retrieved from https://www.danone.com/about-danone/sustainable-value-creation/our-unique-growth-model.html
Danone North America – Certified B Corporation – B Lab Global. (n.d.). Retrieved from https://www.bcorporation.net/en-us/find-a-b-corp/company/danone-north-america
Gilliland, N. (2016, October 05). Danone: Why social media should drive digital transformation. Retrieved from https://econsultancy.com/danone-why-social-media-should-drive-digital-transformation
Kruglianskas, M. (2013, January 7). Sustainability as Innovation Strategy: How Sustainability and Innovation Drive Each Other and Company Competitiveness at Danone. Management Innovation eXchange. Retrieved from https://www.managementexchange.com/story/sustainability-innovation-strategy-how-sustainability-and-innovation-drive-each-other-and-comp
Linkfluence. (n.d.). How Danone Stays Ahead of Consumer Trends. Retrieved from https://www.linkfluence.com/customers/danone
LiveRamp | Data Connectivity Platform. (n.d.). Retrieved from https://liveramp.com/danone-customer-story
Microsoft and Danone join forces for AI at the service of responsible agrifood. (2020, January 23). Retrieved from https://www.danone.com/stories/articles-list/microsoft-danone-ai-agrifood.html
Umapathy, A. (2020, February 12). 3 Business Sustainability Case Studies And Why They Worked. Retrieved from https://repurpose.global/blog/post/3-sustainability-initiatives-and-why-they-worked
UN’s Sustainable Development Goals. (n.d.). Retrieved from https://www.danone.com/impact/un-sustainable-developement-goals.html