(AOF) – Danone and Compañía Cervecerías Unidas (CCU) announce a strategic partnership under which CCU Argentina has acquired a significant minority stake in Aguas Danone de Argentina. This partnership will allow both companies to strengthen their range of beverages, while strengthening their operations in the country.
A representative of Aguas Danone de Argentina said: “With this strategic alliance, Danone joins forces with a prestigious partner in the region. Our agreement is an important step allowing both companies to strengthen themselves in a highly competitive market. Danone has Forged several partnerships in Argentina in its history, and we are proud that Aguas Danone de Argentina is joining forces with CCU to better serve Argentinian consumers.”
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Key points
– World leader in the food industry: first in fresh dairy products (Activia, Gervais, Alpro, Oikos, Actimel brands, etc.), second worldwide in infant and medical nutrition (Blédina, Dumex, SGM, Aptamil, Theocate, etc.) and third in bottled waters (Mizone, Volvic, Evian and Acqua);
– Sales of €24.3 billion divided into 3 divisions: dairy or vegetable products for 54%, specialized nutrition for 31% and bottled water;
– Revenues balanced between Europe-North America (57%, including 22% for the United States) and the rest of the world -Argentina, Brazil, Mexico, China, Indonesia, Russia, Turkey and Morocco;
– Model 2030 “One Planet. One Health”: based on the purpose of “providing health through innovation”, accelerating growth, maximizing efficiency, developing committed brands and enhancing profitability;
– Open but blocked capital (double voting rights, voting limited to AGMs, etc.), Gilles Schnepp chairing the 16-member board of directors, Antoine de Saint-Affrique as general manager and François Riboud being honorary chairman;
– Healthy balance sheet with net debt of €10.2 billion and free cash flow of €2.5 billion.
Challenges
– Renov Danone 2024 strategy: based on 4 pillars: identify future growth areas, regain competitiveness, selectively develop and manage the portfolio / with new 2022-2024 objectives: 3 to 5% annual increase in sales and margin operational by +12% thanks to the savings of the Local First plan /including an intermediate objective 2023-2024: portfolio rotation of 10% of turnover, investments limited to 4.5% of turnover and increase in the need for working capital;
– Innovation strategy contributing to a quarter of annual sales and carried out in 2 international centers and 7 specialized centers: 6 themes: microbiota, plant matrices, packaging and post-plastic, naturalness and organic, allergies and healthy aging / co- building with consumers using agile methods;
– Long-standing environmental strategy: “Acceleration plan for the climate” with €2 billion invested (2020-22) in the group’s brands, agriculture, packaging (84% recyclable) and digitalization / “WeActForWater” : halving of the use of virgin plastic, i.e., in 2025, 50% of recycled PET (rPET) worldwide and 100% in Europe, acceleration of carbon neutrality in Europe by 2025 (2020 for Evian and Volvic ), water access fund (50 million people by 2030)/B Corp certification for 50% of turnover;
– Strengthening, with the purchase of Follow your Heart, of the plant-based products business (sales expected at €5 billion in 2025 vs. €2 billion in 2020);
– Ongoing review of the portfolio, other disposals being expected after that of Aqua d’or in Denmark.
Challenges
– Impact of raw material inflation: 10 to 12% increase in milk prices (+10% in sales);
– Impact of the Russia-Ukraine war: stoppage of non-essential imports and exports (mainly water) and maintenance of the production of dairy products and infant nutrition (13 factories, 8,000 employees, i.e. 5 to 6% of sales and 3 to 5% of operating profit);
– Total renewal of the board of directors, of 12 members in the long term, by 2023.
A booming fair trade in France
This trade has almost tripled in five years, reaching 1.83 billion euros in 2020 in France. Based on a more profitable model for producers in southern countries, it was developed by the NGO Max Havelaar in 1988. The latter labels 90% of fair trade in the world with a total of 10.7 billion dollars in 2019 This trade is 95% food products. Coffee, chocolate, bananas and cane sugar account for three quarters of sales. On our territory, the NGO will label wheat from the Gers and milk from Poitou-Charentes. The French market is developing through mass distribution, which represented 54% of sales in 2020 compared to 42% in 2018. However, while organic represents 6.5% of consumption in France, the share of fair trade is limited to 1.5%.