Danone: Realigning Sustainability for Profitability?
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Case Code: BSTR677 Case Length: 12 Pages Period: 1910-2023 Pub Date: 2024 Teaching Note: Available |
Price: Rs.400 Organization : Danone SA Industry : Food & Beverage Countries : France Themes: Socially-responsible Business Practices, Corporate Responsibility, Corporate Restructuring,Environmental Sustainability |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The case discusses the changes at Danone SA (Danone), one of the world's major manufacturers and producers of dairy and nutritious products, following the exit of its CEO Emmanuel Faber (Faber) in 2021. Activist investors believed Danone required a management overhaul since, under Faber's tenure, sales growth, margins, and share price had lagged behind those of rivals such as Nestlé and Unilever. Danone's sales had declined 6.6% to EUR23.62 billion ($28.83 billion) in 2020. . Since joining in 2014, Faber had shown a strong commitment to resource efficiency and environmental protection. Following Faber’s exit, Antoine de Saint-Affrique (Saint-Affrique) was appointed as new CEO of Danone in September 2021 to lead a turnaround and realign sustainability activities while ensuring profitability. In March 2022, Saint-Affrique devised a strategy to 'Renew Danone'. In early 2023, three environmental organizations, ClientEarth, Zero Waste France, and SurfRider Foundation Europe, sued Danone over its usage of plastic. This was the first time a food company had been sued in France for its use of plastic throughout its entire supply chain. This leads to the question, why did a traditionally purpose-driven firm capitulate to the demands of shareholders? Was Faber’s strategy justified? Will Saint-Affrique be able to drive profitability and sustainability simultaneously in the long run?
Issues
The case is structured to achieve the following teaching objectives:
- Recognize the challenges of integrating sustainability practices effectively in large corporations.
- Analyze why transitioning to responsible capitalism is difficult for CEOs .
- Examine the challenges of aligning sustainability and profitability
- Formulate a strategy to quickly transform a large business
Contents
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Introduction
Background Note
Danone Under Emmanuel Faber
Initiatives by The New CEO
Future Outlook
Exhibits
Keywords
Growth Strategy; Profitable Business; Sustainable Business Practices; Corporate Social Responsibility; Stakeholder Management; Climate change; Sustainable Development Goals; FMCG products; Climate Impacts; Danone; Emmanuel Faber; Activist investors; Antoine de Saint-Affrique; 'Entreprise à Mission' model; ‘One Person, One Share, One Voice’ program;
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