Inspiration from Danone in Bangladesh
Here’s the second guest post from Liam Black, who recently spent a week in Bangladesh putting things in place for a visit to Grameen next month.
Last week I met for the first time Corinne Bazina who for the last six months has been overseeing the Grameen Danone joint venture in Bogra about 4 hours (or 56 depending on the traffic!) north of Dhaka.
I’m always looking for find examples of ‘corporate social innovation’ – that is, big businesses being very clever in the ways they create products and services which address big social needs by aligning their people, brands and core operational competencies. In London later this month we are bringing the world’s leading exemplars together to share learning and evangelise to the growing Wavelength community of business and social enterprise leaders.
It was Danone that really got me interested in this space when I met Emmanuel Marchant a couple of years ago. Emmanuel heads up Danone Communties, which drives forward the French giant’s social business strategy. I really admire these Danone guys. Not only are they doing and not just talking, they are very open and transparent about what they are doing, why they do it and what they are learning – warts (and there are many) and all. One of their marketeers when asked why are you being so honest with us said “Because we want to be known, understood and copied”.
The origins of the idea which became Grameen Danone Foods Ltd are quickly becoming legend. Groupe DANONE CEO Franck Riboud invites Yunus for lunch whilst he is Paris in October 2005. They get on like the proverbial house on fire and decide to do something together to help the poor of Bangladesh. They shake hands and in less than two years in 2006 the new joint venture social business to help end child malnutrition is being opened to worldwide publicity in Bogra by footballing superstar and Muslim icon Zinedine Zidane and productions kicks in February 2007.
It is difficult to overstate the difficulty of commercial and social challenges which these two men set their operational people. To produce a yoghurt to improve kids’ health in a country with few fridges and daily power cuts (in those areas lucky enough to have electricity); which will recruit and train local unskilled people; be sold door to door by poor women to supplement their incomes; to use its demand to improve the lot of rural milk producers AND be a model of environmental friendliness and reuse!
Production and sales are increasing, 40 people have jobs, 500 poor women supplement their income through door to door selling and rural milk farmers have a more reliable market.
The challenges are huge even if the business gets to break even next year. The biggest one is cultural. Danone is keen to back away and hand over to local people but skills and experience are hard to find a small provincial town in one of the most underdeveloped countries on the planet. Danone’s impeccable intentions of creating a genuinely local business run up hard against the brute realities of educational and skills deficits in a chronically poor place.
Danone’s investment in plant, start up costs and operating losses is around 1 million euros. At the moment the Return on Investment is unproven but the Return on Inspiration is huge. I’m convinced anyway that the French multinational has had a bigger impact by investing in social business than if it had just given the money away in a traditional big corporate CSR way. And the yoghurt – Shokti Doi – is very tasty and good for you!