business 34a41_baf2 24/05/05 15:02 Page 36 drives success Health a strategy structured for close relationships with consumers. success of product concepts and brands centered on health and ’s world leadership in the field. Momentum reflects the Fresh Dairy Products posted record growth in 2004, consolidating : f momentum while giving so as to maintain and way of doing things, distinctive character to preserve Stonyfield’s its goal from the start was through Dannon. Instead, its existing business the new subsidiary with was not aiming to merge December 2003, DANONE this to a majority in organic , and raised number one in the US for interest in Stonyfield Farm, When it bought a minority Europe, also made healthy contributions, shape, traditional markets, mostly in the Fresh Dairy Product sector is still taking Russia. Alongside emerging markets where raging 25% overall and topping 50% in and central Europe,strong ave- in eastern place on the market. Growth was similarly Farm restored the Group’s number-one bined successes of Dannon and Stonyfield nued in , where the com- in sales volumes. Favorable trends conti- top place with a rise of 75,000 metric tons Argentina, where DANONE consolidated its tions came from both Mexico and sales rose 22% overall. Major contribu- r vigorous trends in several geographical operating margin at 13.7%. Results reflect u ted total. Operating income was up from u 2003, as did sales revenues, up 10.5% to close to 350,000 metric tons more than in strongest rise ever, putting on 8.8% or egions, in particular Latin America, where 845 million to 6.9 billion or nearly half the consolida- Sales volumes showed the driver for the Group’s growth. the business line’s place as the r r ecord year in 2004, confirming esh Dairy Products had a u 947 million, setting the developing its business own philosophy in continues to apply its causes each year, and of its profits to selected donating 10% concern, to its tradition of social Farm remains faithful same manager, Stonyfield and still headed by the Founded in the 1970s and purchasing. development, logistics including research and of resources in areas the company benefit a winning combination second quarter. concerted retail-price reductions in the initiative for the government-sponsored mass-market consumer goods as well formance suffered from soft demand for was something of an exception, since per- the UK and Germany to north. other countries to the south as well from with strong showings from Italy, Spain and Petit Gervais aux Fruits in France, the immune system and Danonino, called digestion, while helps to reinforce , called Bio in France, favors healthy names from one country to the next. Thus although they may be sold under different health benefits to people around the world, Each of these blockbusters offers distinct million euros and posting double-digit growth. —each generating worldwide sales of several commitment to research and development health benefits, backed by significant four powerful concepts structured around business line’s asset brands. These represent The main sources of momentum were the for global concepts local know-how Asset brands— US market. main competitor on the exceeds that of their risen steadily and now Stonyfield Farm has also share of Dannon and The combined market its sales and production. has more than doubled interest, Stonyfield Farm DANONE acquired its first for themselves: since Dannon. The results speak in cooperation with ••• Belgium, Ireland and Portugal. markets including Spain, deployed on other European Danacol has since been of cardio-vascular disease. effectively to the prevention this new contributes levels of bad cholesterol, ingredient that helps reduce with vegetable sterols, a natural for the French market. Enriched Danacol is already a benchmark FOR DANACOL A STRONG START emphasis on health. to expand its menus with more r yogurt, in 6,200 European Y McDonald’s has offered Fruit & PA ADDED SCOPE FOR it well ahead of competitors. mind awareness (33%), placing in terms of spontaneous, top-of- GFK rated Danone the top brand MCDONALD’S > > > BRAND AWARENESS Highlights and assimilated products * > > > > > > > > > WORLDWIDE* LEADING POSITIONS estaurants as part of its move ogurt, Europe’s first on-tap Based on sales volume for yogurts Launched in April 2004, Since March 2004, In 2004, research institute R No. 2: No. 1: No. 1: No. 1: No. 1: No. 1: No. 1: No. 1: No. 1: TNERSHIP WITH

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S +10.5% Baby food 13.7% Rest Europe Y ogurt ••• w Americans on low-carb diets, a segment to meet the demands of 60 million Control range, launched in January 2004 months to develop its Light’n Fit Carb In the US, it thus took Dannon only a few rapid development of products to match. cation of needs and expectations to allow the key to success is precise identifi- strengthen consumer relationships. Here essential part of its strategy to maintain and faithful to its local brands, which are an Dairy Products business line remains account for half of its total sales, the Fresh While these four champion brands now sales of close to offer in 35 countries and generates annual proven health benefits, Danonino is now on by communications focused on scientifically childhood nutritional deficiencies. Backed sion for each country to target prevalent Brazil and Saudi Arabia, with a different ver- on emerging markets including Argentina, in Western Europe, has won its place an example, Danonino, originally launched nonetheless essential to success. To take but familiarity with local consumers has been are not confined to any particular region, an eye on their weight. Clearly, these benefits is a range of diet products for people keeping Vi Vitali strong. Finally A winning brand recognition, since without weakening the spirit of times in a format attuned to and immediate appeal was to combine warmth The challenge for designers keep pace. and the logo must naturally has evolved with time, Fresh Dairy Products The identity of Danone her tasnella and Ser, depending on the country, e helps children to grow up healthy and t he brand is now the uncontested u nea, also called Taillefine, 750 million. smile within”, the new design signature “Smile from Backed up with the with health that shows. the well-being associated appetite, pleasure and of a smile suggestive the new logo displays Rounded at the edges, quality, trust and health. Danone logo as a sign for consumers see the on health benefits. illustration of DANONE’s strategic emphasis half of the year, providing a perfect UK and Belgium followed in the second Successful launches in Portugal, Italy, the a strong start in France April 2004. of bad cholesterol levels, which got off to Danacol, a yogurt favoring the reduction product deployments. These include central theme, as it has been for recent products is still very low. Health will be a of the world where consumption of dairy China, Russia, Indonesia and other parts pace of expansion on new frontiers in is now confident in itsability to step up the and the Fresh Dairy Products business line are generally considered tough markets, enabled DANONE to take its place on what familiarity with local consumers have Affordable, adaptable products backed by Looking ahead of 650,000 servings a day. mainstay of diet, as reflected in daily sales but where dairy products are a traditional a country where purchasing power is low these are perfectly suited to conditions in a serving—less than one-tenth of euro— another leader. Moufid yogurts in Morocco are example. Sold at only one dirham waters. Ta biscuits in Asia and name, including sold under the Danone used for other products 40 countries. It is also Dairy Products in over by stages for Fresh is being deployed illefine/Vitalinea • vitamins and added quality, with five appeal and nutritional combination of taste 90 days, reflecting a bottles sold in just start with 10 million got off to a vigorous new drinkable yogurt Danone Indonesia’s QUALITY AFFORDABLE > INDONESIA: it within the reach of around the equivalent of for just 1,000 rupiah— The 100 ml bottle sells less than $3 a day. 60% of people live on in a country where crucial consideration affordable price—a content. Plus a very natural -protein calcium enriching the u 0.10—putting p. 47). network (see also nationwide distribution water, and its Indonesia for bottled Aqua, number-one in re cost control with the combined rigorous achieve this, DANONE most families. To *1 sources of Danone 0 euro cents. business 34a41_baf2 24/05/05 15:03 Page 40

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0 & Development Research R&D DANONE perceptions and descriptions of a product. existing recipe by collecting consumer sensory * > LOCAL NEEDS TA a 10% rise in sales for the year. tastes enriched, contributing to texture was thickened and fruit name Petit Gervais aux Fruits, Danonino is sold under the France, for example, where demand more precisely. In to adjust recipes to match in each country were then able and expectations. Subsidiaries identify their taste preferences where Danonino is on sale to aged 5 to 8 in the 35 countries conducting surveys of children center, played an essential role, r Danone Vitapole, the Group’s appeal for children. In this, further enhance the product’s as an organoleptic review*—to perceived features—referred to optimize taste, texture and other r to local conditions. In 2004, the Dairy Products, Danonino adapts three asset brands for Fresh Ta esearch and development ecipe underwent a review to To

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