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Danone North America: The World’s Largest B Corp on the Future of Business

Danone North America recently became a benefit corporation after the acquisition of WhiteWave Foods presented an opportunity to embed the company's purpose into its legal structure. | Image credit: Danone North America

A global food company present in more than 130 markets, Danone has always had a purpose agenda, even when it was an unusual idea. Danone committed to combine economic success and social progress in 1972, when the company’s founder, Antoine Riboud, began Danone’s “dual project.” As Danone has grown, that commitment has been apparent in initiatives such as the Danone Way sustainable-development guidelines that have helped Danone subsidiaries improve their impact since 2001; and the establishment of Danone Communities, which began with a partnership with Mohammed Yunus in Bangladesh in 2006.

Danone’s mission to bring health through food to as many people as possible is supported by a number of well-known brands across four categories (essential dairy and plant-based, bottled water, infant feeding and medical nutrition), including Danone, Oikos and Aptamil. Danone generated sales of more than €24 billion in 2017.

When Danone wanted to expand its footprint in the North American market, it acquired WhiteWave Foods, the market’s largest organic food company. DanoneWave, which combined WhiteWave with Danone’s existing North American dairy business, more than doubled Danone’s business in North America and became one of the 15 largest food and beverage companies in the United States. Danone North America, as the company is now known, represents approximately 20 percent of Danone’s global revenues and includes brands such as Oikos, Silk and Horizon Organic.

 
Danone North America’s
Isabelle Rayle-Doiron
and
B Lab’s
Kim Coupounas
will discuss
Stakeholder-Based
Governance Models

at SB'18 Vancouver

The creation of this new entity offered Danone an opportunity to take its broader purpose journey to a new level, to take advantage of benefit corporation governance in the U.S., and to create the largest public benefit corporation in the world.

The benefit corporation structure, created in 2010 and available in the majority of U.S. states, allows a company’s directors to consider stakeholder interests alongside shareholder returns when making decisions. By creating Danone North America as a benefit corporation from day one, Danone was able to write Riboud’s vision with the “dual project” into its legal structure, protecting the company’s mission and vision for the future.

“Acquisitions are a natural time to make these kinds of transitions,” says Lorna Davis,* Senior Adviser to Emmanuel Faber (CEO of Danone) and a Global Ambassador for the B Corp movement. “When [Danone] bought WhiteWave, we concluded that the legal entity framework would be a public benefit corporation, because we could use it to concretely demonstrate what we were trying to do. We would be able to send a strong message that we were serious about this, because if you’re setting it up legally, you’re serious. We wanted to be held to account, so we also set the intention to for Danone North America to pursue B Corp Certification by 2020.”

Danone North America completed its B Corp Certification this month, making it Danone’s eighth B Corp subsidiary and the largest Certified B Corp in the world.

“Our B Corp Certification journey began on day one as a new company, when we legally incorporated as a public benefit corporation on April 12, 2017; and made a commitment to become a Certified B Corp by 2020. In the following months, we began to tackle more than 1,500 questions for the five B Impact Assessments required to certify our legal entity, and across the five focus areas of the assessment to capture and benchmark our organization,” says Deanna Bratter, director of sustainable development at Danone North America. “Once we began to get deeper into the process with the B Impact Assessment, started answering questions, and had the expertise and engagement of more than 150 stakeholders across our business, it became obvious that our combined companies could meet the goal sooner than initially projected  —  two years ahead of our initially stated target of 2020. We believe it will be a huge advantage in the long run to embed B Corp criteria and thinking into our organization and business from the very beginning.”

To help other multinational companies follow suit, B Lab worked with Danone to create a case study, “Danone and the B Economy: How Large and Multinational Companies Can Join the B Corp Movement,” which details how Danone moved its holdings through the B Corp process, why the certification is valuable to a multinational already committed to its values, and the role of benefit corporation governance structure throughout the organization.

We spoke with Bratter to gain more insight into how Danone North America became the world’s largest B Corp and its goals for the future.

How can a food company help make the world a better place?

Deanna Bratter: Our mission at Danone is to bring health through food to as many people as possible. Our vision of One Planet, One Health is an expression of how we view the interconnection of the health of our planet and the health of our people, we are all one.

We hope to harness these ambitions to connect the 900 million people who choose Danone brands with the collective power of their daily choices. To show that the food they chose can have a meaningful impact on the health of our planet and people. As our business works to increase value to our shareholders, we will also increase our collective social and environmental consciousness  —  and our positive impacts  —  and this will be a signal that we are doing our part to redefine success in business.

Why did becoming a B Corp and benefit corporation make sense for Danone North America?

Our parent company Danone’s B Corp ambition is an expression of the company’s long-time commitment to sustainable business and its dual project of economic success and social progress. In 1972, Antoine Riboud said, “There is only one Earth; we only live once.” Those words kickstarted a vision that lives on today: to bring health to our planet and to generations of people through our company and its ecosystems now and in the future.

B Corp certification also codifies the spirit behind One Planet, One Health: Our company’s vision that the health of people and the planet are interconnected  —  a call to action for everyone who has a stake in food to join us in nurturing the adoption of healthier, more sustainable eating and drinking habits.

Danone has a global ambition is to be one of the first multinational food companies to obtain a global, full-company B Corp Certification, which will help make sustainable business mainstream and create new business models of the future. Danone Canada and Danone North America are the seventh and eighth subsidiaries of Danone to become certified, meaning more than a quarter of our global company is now made up of Certified B Corporations. So, we are well on our way!

We believe it will be a huge advantage in the long run to embed B Corp into our organization and business from the very beginning, so we can optimize the building of new systems and processes. B Corp certification builds on our many years of operating with people and planet at the heart of what we do and celebrates the important work we already have underway, including fighting climate change, driving more sustainable ingredient sourcing, advancing packaging recyclability, reducing waste, conserving water, ensuring animal welfare, supporting food security and engaging our communities in these efforts. We didn’t have to change, fundamentally; we did have to put the methodology in place to measure and report the work we’re already doing.

A great example of leveraging integration to our benefit was the formalization of a new Supplier Selection process and training that now incorporates B Corp best practices such as considering suppliers within the same geographic area; consideration of social and environmental factors and benefits of local purchasing including developing the local economic community, reducing transport costs and environmental impacts.

What are your first-year goals?

After we take a bit of time to celebrate, we plan to get to work developing an internal steering committee for our company; coordinating with key champions throughout the organization to develop improvement roadmaps tied to specific questions and results; and continuing education, training and engagement about what B Corp is and why it’s important for all of our 6,000-plus employees. We want each individual to know it, feel it and see how they themselves have a role to play  —  each individual must “B the Change” for us to truly realize the mission and vision of our business.

How was the certification shared with the brands such as Dannon, and what was the reception?

It is important for us to ensure that our brands know this is a company-level certification, based on who we are and how we operate. Our diverse portfolio of brands are manifestations of that vision and mission. To the educated B Corp consumer, some of our brands are a clear “fit” with the B Corp ethos, while some brands might seem a bit further away. What’s important to recognize is that our fundamentals are true across our organization. Even some of our more “mainstream” brands not only provide benefits, such as probiotics, but are working toward our social and environmental ambitions. In the case of Dannon, this brand is championing the expansion of soil health and non-GMO options into the world of conventional dairy.

We also see our diverse portfolio as being on a journey, much like our business and certification. We were incorporated one year ago as a benefit corporation, have gone on to become a Certified B Corporation, and we plan on identifying ways we can improve, enhance that score, inspire our people to see their role in B’ing the change, and driving these principles and values even deeper into our business  —  this goes for every brand in our portfolio.

*Lorna Davis, Danone’s Chief Manifesto Catalyst and ex-CEO of DanoneWave, has been seconded to B Lab and is spending 12 months helping other multinationals engage meaningfully with the B Corp movement.

This post first appeared on the B the Change blog on April 12, 2018.


Jennifer Kongs (JK) is a cofounding partner at Bark Media, a content-marketing firm that helps create and amplify the stories of impact businesses and nonprofits. In her role, she is editor of B the Change, the online Medium… [Read more about Jennifer Kongs]


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