Antoine de Saint-Affrique took charge as Danone’s CEO in September 2021. Globally, the €27.6-billion company has three businesses—essential dairy and plant-based products, specialised nutrition, and waters. It is present in the specialised nutrition space in India with brands such as Protinex, Aptamil, and Dexolac. Danone recently launched a three-year programme to equip more than 5,000 dairy farmers in Punjab with sustainable methods to help increase milk yields. de Saint-Affrique, 59, speaks to Business Today’s Krishna Gopalan on a host of issues including the company’s sustainable growth plan, Renew Danone, the debate on plant-based products, and why India matters. Edited excerpts:
Q: How does it feel to be back in Danone?
A: I first worked in Danone before it was acquired by Unilever, where I then spent 15 years. In fact, this is my third stint with Danone. The first was an internship as a student before going to the navy. This is a homecoming, and I believe this is a company that is unique in many different ways. We are large but care about not just the business but the world around us.
Q: In March 2022, you presented Renew Danone, a strategic plan around four pillars (win where we are, expand where we should be, seed the future and manage the portfolio). What was the rationale?
A: Danone was going through challenging times at that point (activist shareholders managed to oust the company’s then Chairman & CEO Emmanuel Faber). The name of the game was to bring calm and focus. The board was completely changed as was a large part of the executive committee. The focus was on brands and profitability, meaning we had to reinvent. Brands [were to be] at the centre of the company and [whatever we did, we had to] be obsessive about execution.
We have been blessed with a large stable of brands. I decided to bring back science to the heart of the operation. There is a depth of knowledge, and we had to capitalise on that. Danone is a company of passionate people, even those who don’t work for us anymore. Earlier this year, I was at the home where Van Gogh [lived] in France. The owner of the house discovered I worked with Danone and said he worked for the company 35 years ago. I had the most exclusive visit eventually!
Q: What was the mandate when you took over?
A: I wanted to bring Danone to its rightful place and that was to make it shine again and bring it back on track. It was an obvious mandate… and important since times were difficult. It is my belief that if Danone was twice as large, the world would have been a better place, and you cannot say that about every company.
The job has clearly been something to look forward to, but is demanding as well. It feels like 3 minutes and 30 years at the same time (laughs). I took over towards the end of the pandemic and it must be said this is a very different company [now] since growth is back.
Q: Can you point to the decisions that worked?
A: It was really about regaining the edge on execution—that means passion for brands, consumers and seeing your brands in the stores. It applies to everything we do and the need to be absolutely single-minded. Then, there is the part on science being a differentiator. That means there is a need to think short-term and long-term and also bring the two together. The third is getting back to the centre of the business. In five years, we must show clear results on sustainability with impact that is very visible. Finally, Danone should have the best talent across functions with a strong culture bordering on passion for performance.
Q: What do you like about the Indian market?
A: India is a combination of extraordinarily sophisticated facets. There is a lot of science plus history that is ancient and also young. All that makes it a very fascinating and energising place to do business.
Q: What makes India difficult to crack?
A: There is never an easy market. One must be patient. We have an infant nutrition portfolio and one that is very sophisticated. India gives us many options here and our expertise with science has to be at the core of it.
There are a large number of children born every year and we believe we can make a difference to the life of the mother and baby. There is Protinex, a brand that is old and iconic, but a lot more can be done with it. There are not many companies that have the science that we have when it comes to infant nutrition. At the end of it, it is about leveraging your portfolio to make it relevant and India, to that extent, is no different except that the size of the opportunity is much bigger, and the market is growing fast!
Q: As you look at the markets that you operate in, which one does India remind you of?
A: The two markets that have elements of resemblance are China and Indonesia… China for the extreme sophistication of the consumer plus the role of digital. In Indonesia, there are a set of requirements and whatever you do, you must be at the right price points. Besides, some of the logistics constraints there are more challenging than in India. To that extent, India is a mix of both China and Indonesia and that is one of the many reasons that makes it both unique and exciting.
Q: What do you have to say about Danone’s presence in India today?
A: We are not at the scale that we should be in India… India needs to be in Danone what it is to the scale of the world… the question is how fast that can be done. If we want to be a global nutrition leader, we must be big in India… Look at the size of the market and opportunity, the importance of the market, its sophistication and, therefore, what the market can bring to us. Danone India [needs to] become a source of talent to Danone in the rest of the world.
Q: Historically, French companies have a thrust on R&D and demonstrate a lot of patience…
A: I will agree on the science part and yes, we are here for the long-term. But patience cannot be an excuse for going slow. I would go with a good mix of patience and impatience. Danone looks at India with a clear strategic approach. If you look at the US and China, they are our Top 2 markets, followed by France and that is a clear reflection of their economic size. In India, we acquired key businesses (in August 2011, it bought Wockhardt’s nutrition business for Rs 1,575 crore and with it came brands such as Farex, Dexolac, Nusobee and Protinex).
Q: Does that mean there is enough growth from the organic and inorganic routes here?
A: We are only scratching the surface in India. The question is really about how many newborns are being fed with our products? We can do a lot more. Look at Protinex… There are going to be over 300-400 million people in the 65+ age group by 2030. That tells you how large adult medical nutrition is. The portfolio is there but execution needs to be very good. Perhaps, I may not need to go out and buy something.
Q: Danone had a presence in the dairy business earlier. Do you want to look at it again?
A: I am a businessperson and will never say no to anything as long it sits well with what we are capable of. My starting point is about making a difference with our distinctive capabilities… To be honest, the existing portfolio is good, but the opportunity is big, and we can grow well from here.
Q: What is your view on having an India-specific approach in a market that is known to be full of opportunities and yet complex?
A: India is a very different proposition. Technology is available everywhere and it is universal, but how you deliver it in each country is what makes it different. Tastes are different in India and come from diverse cuisines. You can’t have a one-size-fits-all approach.
We are focussed on developing global platforms, such as gut health or protein that we can apply across our portfolio—examples are those of early life or medical nutrition… then we tailor these products to local tastes and preferences, we call this glocalisation—global platforms executed in the right way locally.
Q: The debate on dairy-based versus plant-based products continues. What is your take?
A: We have seen how plant-based nutrition has gained ground in Europe and North America… We have a great portfolio in both the beverages and yoghurts categories, with strong brands in both these markets. With the growth of flexitarian diets, there continues to be a lot of buzz around plant-based products. My view is that both plant-based and dairy-based [products] will co-exist and there is no question of replacing one with the other. For example, people may choose oat milk in their coffee and dairy in their tea.
Q: Technology is a potent tool in the hands of marketers today. What do you like about it?
A: It is a very formidable force. Technology is everywhere and a huge factor. I was in China earlier this year and saw 5G technology at work. What you can get from AI or, for that matter, just the data generated from the consumer is invaluable. If you can then use data mining over it, a lot more can be done.
Take the case of early life nutrition in China. We have an app where through our image recognition AI, you start getting very relevant information on stool consistency and colour. Danone is investing in developing such digital tools to help give parents peace of mind about the health and well-being of their little ones—particularly when it comes to their baby’s nutrition and digestive health. I look at technology as being very useful to make lives easier, and I love it!
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