Crisis Management Prevention Or Cure?

2DANRAP005_16a29_GB_baf2 31/05/06 18:15 Page 17 Tod a yi s s u e s At DANONE, combining business success with social responsibility has been a priority for 40 years. Nutrition, food safety and the enviro n - ment are just some of the a reas in which we have made a formal commit- ment to pro g ress that we are backing up with c o n c rete action*. Photos: Emmanuel Pierrot * For more information, see our 2005 Social and Environmental Responsibility Report. Today issues Health Food or medicine? Groupe DANONE places special emphasis on the development of products with distinctive health benefits. But we make food, not medicine. Food delivering health benefits above high cholesterol. These benefits have and beyond nutritional value and taste been scientifically proven by the Group’s DANONE now appeal is a defining feature of new pat- researchers in cooperation with research has a collection terns of consumer demand, echoing the teams around the world. advice dispensed by Hippocrates more of more than than 2000 years ago: “Let food be thy NATURAL GOODNESS medicine.” A daily source of the materi- While a wide variety of ingredients are als essential to health and well-being, used to develop functional products, our food can also aid digestion, help improve R&D teams rely first and foremost on the 3,000 cardiovascular functions and reduce cho- natural goodness of our raw materials probiotic strains lesterol and other risk factors. Despite —milk, cultures, grains and water. such benefits, food is never the same An important example of this is the lactic that it uses to thing as medicine, which is used to treat ferments referred to as probiotics, which specific pathologies over a defined period can benefit health when consumed in study interactions and should never be taken by people in sufficient quantities. DANONE now has between cultures good health. a collection of more than 3,000 different strains that it uses to study interactions and the body. NUTRITIONAL VALUE between cultures and the body. The pro- AND TASTE APPEAL biotics present in Activia and Actimel At DANONE, we believe that food should were selected by DANONE researchers contribute to health and well-being. And for their beneficial effects on the intes- while nutritional value and taste appeal tine. The Bifidus essensis culture in have naturally always been priorities for Activia thus stimulates lazy intestinal tran- our products, over the past 20 years we sit while the L. casei defensis in Actimel have gone further, developing products stimulates the defensive capabilities of such as Activia, Actimel, and Danacol the intestinal wall and flore. with specific health benefits—but which we in no way consider medicines, since they are not intended to treat illness and have to meet the same standards for Prevention with Danacol taste, texture and other perceived fea- Danacol, sold in seven countries since 2005, stands out from other DANONE tures as our other products. We refer to products. Fortified with plant sterols to help reduce bad cholesterol, it is them as “functional” products because intended for a distinct group of consumers—only those with high choles- they offer one or more clearly identified terol—as part of a healthy, balanced diet with additional fruit and vegeta- health benefits in addition to their nutri- bles. But it is not medicine. High cholesterol is a risk factor for disease, not a tional value. Actimel helps strengthen disease in itself. And while their effectiveness has been scientifically proven the body’s natural defenses, while Activia and recognized by competent authorities, products containing phytosterols helps regulate intestinal transit and are not a complete solution for high cholesterol. Only a medical professional Danacol helps reduce certain types of can determine the right option for each individual. 18 // DANONE 2005 Today issues Crisis management Prevention or cure? The confidence of consumers, authorities and shareholders increasingly depends on the capacity to anticipate risks and manage crises. DANONE thus makes continuing consolidation of that capacity a top priority. DANONE identifies and manages around reports directly to the General Secretary, While the frequency of crises has lev- 180 potential crises annually, yet most whose department provides leadership eled off since 2000, their nature has of them go unnoticed—quite simply and professional development for local changed. The number of incidents directly because they are successfully handled crisis managers through kits, training and related to products or quality defects in a matter of hours. This reflects the simulations. thus dropped from two out of three crises first, simple principle of crisis manage- in 2000 to one out of three in 2004, but ment, which is to take everything seri- PREVENTION THROUGH DIALOG new challenges have arisen. These ously, or a minor incident can become Our crisis management network has one include situations relating to social re- a major crisis. That means that even the overriding goal—to identify potential crises sponsibility issues and public opinion most routine issues must be addressed and solve problems before they happen. campaigns led by consumer groups, as soon as they arise, as is illustrated by An important tool for this is Vestalis, a which Groupe DANONE manages a case in October 2005. A British con- risk-mapping method that allows each proactively through regular contact with sumer notified DANONE that her Volvic business unit to factor in its specific risk consumer advocates. Another important water tasted like camphor, which is com- environment. The Group also monitors concern is external risks such as SARS, mon when water is stored with household the Internet constantly and actively gath- anthrax and avian flu. The Group is pre- products for too long, but owing to the ers information in the field. Above all, paring for these possible health crises company’s failure to respond immediately, DANONE emphasizes dialog with con- in the knowledge that staying ahead of the situation nearly degenerated into a sumers, paying special attention to the risks is half the battle. real crisis that could have threatened comments and questions directed to the Volvic sales in other countries. customer service units for our various brands and providing tools for effective RESPONDING ON THE SPOT analysis of this invaluable information. Poor handling of an incident can do last- ing damage to a company’s reputation and consumer confidence. Over the past 15 years, Groupe DANONE has thus Quick reactions made a special effort to develop an effec- Christmas 2005: as DANONE distributed Evian water in a limited-edition tive crisis management network. Since Christmas bottle around the world, a customer in Japan reported the the impact of most incidents is local, this presence of foreign objects in one bottle. The information quickly reached began with the appointment of a crisis Group headquarters, and crisis managers swung into action, isolating manager for each business unit, with the warehouse that had shipped the bottle. Using the production date to the result that 75% of all crises are now identify the lots at risk, they recalled all bottles produced on that date handled locally. The local teams are and had other lots checked to ensure that no other bottles had been coordinated by crisis managers for the affected. In all, 180,000 bottles were inspected to eliminate any possible corresponding business lines and by a threat. Although the health of consumers was never in jeopardy, a rapid, central crisis-management team that systematic response was the only option. DANONE 2005 // 21 Today issues Nutrition Reducing sugar and fat: mission impossible? Concerns over obesity sometimes lead people to see sugar and fat as public enemies. But how can we reduce them without sacrificing flavor? DANONE has been striving to find the best solutions for over 40 years. Over the past five decades, lifestyles in January 2006 found that healthier is critical to the development of foods that have undergone radical and unprec- products account for 75% of Groupe offer the same pleasure even when a edented change. Physical activity is less DANONE’s portfolio. recipe has been completely reworked. and less a part of daily life, which is in- R&D has enabled DANONE to offer creasingly sedentary. Diet has changed, R&D FOR HEALTH reduced-sugar versions of many products, too, and family groups have splintered. In their continuing drive to enhance the including LU breakfast biscuits and Together, these factors are behind the nutritional value of DANONE products, Actimel, as well as zero-calorie flavored rise in obesity. Although the composition our R&D teams face a challenging task. drinks like Ser and Taillefine Fiz. It also of process foods is just one part of the Sugars and fats not only provide calo- enables us to limit fat content, cutting the problem, businesses, public authorities ries and other nutritional properties. They saturated and trans fats that consumers and scientists work with other stake- also have technical and organoleptic are urged to limit and incorporating holders to reduce ingredients such as properties that are absolutely essential essential fatty acids whenever possible, sugar and fat. to taste appeal—and in many cases to especially in biscuits like our Taillefine / production. If we reduce the fat in a bis- Vitalinea and Ourson lines. The Group’s A LONGSTANDING COMMIT- cuit, for example, the product may not focus on healthy foods also means that MENT TO

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