Conscious leader interview with Thomas Kyriaco, Danone

We experience drastic changes in the way we live and consume. A new generation of consumers is looking for more transparency and authenticity from the brand they consume. In the face of the COVID-19 pandemic, we can observe the rising demand of wellness products & services and the need to return to the core values related to health and well-being, in particular with regards to food.

At WellnessHub we are building a unique ecosystem to inform & connect conscious leaders and drive more innovations and partnership between corporates and startups. I had the chance to interview Thomas Kyriaco, One Planet One Health Customers Director at Danone company, to discuss how Danone responds to new consumer expectations, which initiatives are being put into action and the importance of corporate social responsibility in today’s market climate.

Philippe Garnier - Founder

Thomas, tell us about your professional background and your main mission at Danone.

I started my studies at Science Po and then at HEC business school. I spent 7 years at L'Oréal as a part of the global Marketing team. It has been almost twelve years since I started working at Danone where I am mainly in charge of international marketing and business development. But for the last two years, I've been reorienting myself towards a new mission which I'm passionate about and which is extremely in tune with everything that is happening in the world right now. We call it "One planet, one health", in other words, Corporate Social Responsibility. "One planet one health" is our vision, it’s also a new business model we develop at Danone and my role is to implement this business approach among our major retail clients. My job within the company covers all our categories, which is both cross-business unit and international. I am first and foremost in charge of Carrefour and Tesco, which are two distributors who are very advanced from a CSR point of view.

Since the term is becoming increasingly widespread, how would you define CSR and its

main role?

At Danone, since the 1970s, the corporate responsibility doesn't stop at the factory doors. The mission is to bring health through food to as many people as possible.

Today this idea seems obvious and people are aware of many issues, especially now with the

COVID-19, but 20 years ago it was a revolution. There we were already present on the market of baby foods, water and yoghurts... Now, this adventure becomes even more ambitious. 4 years ago Danone chose to massively invest in WhiteWave to enter the plant-based market, which Danone sees as a natural extension of its original mission through yoghurts. Nevertheless, these are different categories of plant-based products we will continue working on.

With over 50 years of experience that CSR is embedded in Danone’s DNA, it might still be difficult to implement new consumers' expectations into the business model, the way the company operates as well as the manufacturing processes.

4 years ago, with the arrival of Emmanuel Faber, our health-focused mission, in which Danone has always believed, extended to what is our vision today "One planet, one health". There is no global health without the health of the planet, and, what is good for the planet is good for our health. This becomes even more obvious today in the light of the Covid-19 pandemic and the major environmental challenges the world is facing. CSR at Danone involves a fundamental coherence of the offer. If we have a clear mission, outlook and an offer, it implies that the portfolio must be in line with our values, encouraging healthier and more sustainable habits. To give a clearer understanding, Danone has made the choice to focus on healthy products with already 90% of our portfolio that is in healthy categories: water, yoghurts, milk and other daily dairy products, beverages with 0% sugar, early life nutrition products and medical nutrition.

That is what makes Danone so special, also explaining why we chose at a very early stage to support and start deploying Nutriscore on our products to promote transparency and encourage healthier behaviours. Following the logic of things, this principle is completely in line with consumer expectations who want transparency and authenticity. As it appears today, from 30 to 40% of people scan at least one product with an application like Yuka while grocery shopping. Not seeing that means losing the track of today's consumer behaviours and expectations.

We can observe the increasing number of consumers' demands for more transparency

particularly in food, what are the other main trends you see at Danone?

Transparency and health pillars will become even stronger, given that everyone is wondering what will happen to us after this health crisis. Needless to say, that the major health-related changes will occur, leading consumers to crave biodiversity, carbon footprint reduction, and the consistency in the corporate actions that brands choose to take. Consequently, today we ask all our brands to choose a fight, or what we call The Manifesto Brand. For example, we have a water brand from Mexico Bonafont, which is the leading bottled water manufacturer in the country. For over 15 years, the brand has been celebrating and advocating gender equality, which is a huge issue to this day. Their actions are carried out through donations, training, as well as the annual 5K race, gathering over 70.000 women in the streets of Mexico City and other cities in the name of gender equality.

The results of this initiative are very tangible. If we take the example of evian, our most

committed brand, not only does it incarnates purity and health through the water of exceptional quality but it is also very committed to preserving the water sources. For the past 25-30 years now, a whole range of good practices has been put in place to ensure the preservation of natural resources. evian is the first brand to have declared the intention of becoming a full circular brand, making all of its plastic bottles from 100% recycled plastic by 2025. The brand has also obtained global certification for being carbon neutral.

You previously mentioned existing initiatives in other countries. In your opinion, which countries are the most advanced on the subject of consumer insights and where the innovations are coming from?

Today, social monitoring makes it possible to identify things in a quantitative and in qualitative ways, as we can listen to hundreds of thousands of conversations and we are dealing with enormous volumes of data. What we see today is that many early expectations in terms of carbon impact, biodiversity, health or social responsibility are very often coming from the Anglo-Saxon countries. This is where many conversations on the subject emerge, but these expectations are clearly more and more widespread.

To me, one of the most extraordinary examples of brands disrupting the Consumer Goods Industry in recent years is a startup called the Dollar Shave Club, using direct to consumer strategies and social media to build a strong community online. They have managed to disrupt a huge market of Razors products and finally got acquired by Unilever for $1 Billion. As a way of capturing innovation and new trends, Danone has launched a Danone Manifesto Venture investment fund, allowing to scrutinize the diversity of new businesses as well as the dynamic of startups globally.

What else do you see in terms of innovation, whether it’s tech or digital, that disrupts these

markets?

Foodtech is developing rapidly, but at the same time, we are essentially dealing with technologies that have existed for a very long time. One trend that I see emerging in terms of innovation is the aspect of collaboration. Today, for products and consumer goods brands like Danone, there is a huge part of the business portfolio that is entirely renovated every year. In 2019, 30% of Danone's total sales consisted of products that had not existed 12 months before that. So, it's something that's hardwired into the genes of every brand of consumer goods. On the other hand, we currently have many collaborative initiatives that are being put in place, yet three or four years ago they didn't even exist.

One example I'm particularly proud of is the investment Danone has been making for a century now. That includes yoghurts and in particular the detection of the right bacteria and the discovery of the fermentation processes that would be fastest, most efficient and most in line with consumer taste expectations. These 100 years of investment have resulted in Danone being able to register the patents of 1,800 strains. On the occasion of Danone's 100th anniversary, in April 2019, they were made fully accessible to the entire scientific community to encourage the development of new quality products and to support open research. This is a true embodiment of our day-to-day mission.

Danone has launched the Danone Manifesto Venture investment fund. Does it also allow you to trigger innovations and benefit from the thriving startup ecosystem?

This is exactly what we seek within the company. Danone Manifesto Venture was founded less than 5 years ago, with a very emblematic first investment in Michel and Augustin. Today, for instance, our fund is investing in Phenix, specialized in collecting unsold food wastes to give it a second life. The original intention arises for the fact that one-third of the world's food production is not consumed by humans. It says a lot about how much can still be done, considering the fact the world population will soon reach the 10 billion point. We are therefore ready to invest in bold projects which will change the world for the better.

In light of the COVID-19 crises, big commitments were put in place to help these companies financially. Danone has even set up a special fund for the entire Danone ecosystem, to help brands get through these difficult times.

Today, brands must be socially responsible and business-driven at the same time. How can

such a big company as Danone ensure customers, that their commitments are real?

That is the question of promises that brands must keep on a daily basis. An important thing to keep in mind is that we live in an era where consumers are extremely sceptical and we have to come up with real strategies and commitments and clearly communicate them. The “One planet one health” journey is moving forward with the intention of Danone to become an “entreprise à mission”, which is another step forward to contribute to making the Food Revolution happen.

How do you communicate this transition towards transparency through the digital space,

including social media?

First, we have a CEO who is naturally an opinion leader, who is very present in the digital environment. When it comes to spreading this message across society, the stakes are high. We also keep encouraging Marketing teams to think about digital in a broader sense. Today what is important is to identify each of the communities our brands want to address, define tailor-made messages and deliver them, applying different approaches at the right time, on the right platform and to the right target.

What we see today is the increasingly important role of companies and brands in the world of tomorrow. As we see all these new brands emerging on the market, would you like to give a special mention to any entrepreneurs or innovative brands?

A company that always impresses me is Patagonia. It has been implementing various initiatives for more than 40 years. What is truly remarkable is its ability to bring communities together. The brand has chosen to be a part of 1% for the Planet movement, and the money they collect goes to projects that promote biodiversity and the preservation of the environment. Above all, what is new is that they now invest in influencers and young activists, helping them bring their projects to life. And it works very well for an activist brand like Patagonia. I find it very inspiring the way they align their vision, their ability to raise funds and redeem themselves in society by encouraging young activists.

Could you tell us more about the Consumer Goods Forum?

Consumer Goods Forum is an international organization that brings together 400 companies, distributors and manufacturers. The purpose of the forum is to promote business for good. It has several coalitions of action, from logistics to supply chain. The one I am working on is called Health & Wellness. There are currently 10 cities in the world chosen by the CGF to launch the experiments by bringing together a group of distributors, manufacturers and partners and asking them to implement initiatives that encourage conscious behaviour.

I have a chance to co-manage one of these initiatives with Carrefour, which was launched in Lyon, France. It brings extraordinary opportunities, allowing us to cooperate with the industry by getting away from the traditional guidelines. Moreover, we work with INSEAD, European Institute of Business Administration, which allows us to measure the impact of the projects we put in place. To give a few examples, we have introduced a 100% healthy front checkout in some stores. So instead of having chewing gums and chocolate bars, they now have a full range of A and B Nutri-score products. We have also taken onboard chefs from Lyon who have been interested in putting at least one A or B Nutri-score dish on their menus, a locally produced dish that is in line with seasonal products. With COVID-19, we had to put some of our activities on hold. Not so long ago, we even discussed with the government of Lyon who has been supporting our initiative from the very beginning, to find out the best way to provide help at the local level. The city gave us a list of local producers looking for employment opportunities. This way we were able to start dispatching this list to see what could be done for these small local producers.

As one of our WellnessHub contributors, would you have any advice for the ecosystem?

If you can get business, NGOs and governments to work in coalitions, you can create efficiency and ethics. I believe that WellnessHub has a big role to play to drive more innovations as it brings together corporates and startups. And the solution lies right in front of our eyes: we need to collaborate within the business community, alongside large companies and startups but equally with NGOs and public authorities.