“Consumers have lost the value of food” – Trends-Tendances sur PC

“The more we grow, the more we have an impact. The more we have an impact, the more we grow”, summarizes Nathalie Pfaff Seigle, CEO of Belux, on the occasion of the 50th anniversary of the group’s “double project”. A dual project that lies in the ambition for the company to create both value for shareholders and value for society. “A necessary reconciliation between the economic performance of the company and its social and environmental responsibility”, continues this 40-year-old Frenchwoman who has been living in Belgium for five years. Accompanied by Nigyar Makhumudova, the Group’s Growth and Innovation Director, from Azerbaijan, she explains to us why economic performance is inseparable from sustainability.
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“The more we grow, the more we have an impact. The more we have an impact, the more we grow”, summarizes Nathalie Pfaff Seigle, CEO of Belux, on the occasion of the 50th anniversary of the group’s “double project”. A dual project that lies in the ambition for the company to create both value for shareholders and value for society. “A necessary reconciliation between the economic performance of the company and its social and environmental responsibility”, continues this 40-year-old Frenchwoman who has been living in Belgium for five years. Accompanied by Nigyar Makhumudova, the Group’s Growth and Innovation Director, from Azerbaijan, she explains to us why economic performance is inseparable from sustainability. TRENDS-TRENDS. What does Belgium represent for Danone? NATHALIE PFAFF RYE. Belgium is a great country for the group. We employ 1,800 people there and we reach more than five million households with our products. We have five units here: an office in Brussels, the Alpro offices in Zwevegem, a research center in Ghent and two production plants in Wevelgem and Rotselaar. NIGYAR MAKHUMUDOVA. Belgium is a geographically strategic location, which makes it a perfect laboratory for large-scale marketing tests. It’s a small country, but it makes it possible to quickly analyze the consumer’s perception of a new product, which is very useful for analyzing and anticipating market trends. What are the group’s investments in Belgium? NPS We have invested heavily in our two production plants. Recently, we committed more than €5 million to a wastewater reuse program. Eighty percent of the water from the manufacturing process is reused. The two production sites operate with 100% renewable energy thanks to an investment of more than 20 million euros in Wevelgem alone. This efficiency now allows us to reduce our energy bill by two thirds. Why are these two factories important for the group? NPS It was in Rotselaar that the engineers invented Actimel, which is one of our most important products. The Wevelgem plant produces the Alpro brand, which we took over five years ago. It is one of the most innovative centers in the plant segment. Vegetables are precisely the new trend in the market. How do you respond to this request? NM We have the ambition to become the largest flexitarian company. We therefore made two major acquisitions in order to achieve this objective by buying Silk, a brand available in the United States and Canada, and Alpro in Europe. The plant is a segment very rich in innovations. NPS Nearly 38% of Belgian consumers say they are flexitarians. We want to convert as many people as possible, for example with our product This is not milk, a vegetable drink that imitates the texture of milk but also yogurts or cheeses. Plant-based drinks aren’t really new… NPS No, but we’ve worked to change tastes. The group started with a soy milk that was intended only for people who are vegan or lactose intolerant. We have evolved thanks to work on fermentation which has made it possible to broaden the range of products offered to consumers. NM We have also launched a range of vegetable drinks for baristas. There are other products in development but we cannot communicate about them yet. The recent International Food Exhibition (SIAL) unveiled the three most important axes of innovation: pleasure, health and ethics. Do you think your business meets these criteria? NM Yes, completely. Of all the food companies, Danone is one of those that focus the most on health. Eighty percent of our portfolio is made up of products with a nutriscore A or B. Ninety percent of our portfolio is ATNI (Global Nutrition Index) certified, which means our products can be consumed daily. At the same time, we pay great attention to pleasure, with a variety of tastes. NPS In terms of ethics, many things are being done. We have three carbon neutral brands: Actimel, Evian and Volvic. On the Actimel bottle alone, we have halved the plastic weight, the label has also been replaced, which corresponds to eight tonnes less plastic on the Belgian volumes produced over one year. There is also work on the ingredients. Oats, almonds and soy mainly come from Europe. In fact, it is work that is carried out on each actor in the agri-food chain, including farmers who must be paid properly. You have also been a B Corp certified company (therefore meeting certain social and environmental objectives) for seven years. Is it a competitive advantage? NPS Yes, probably, although we don’t see it as such. Rather, it is a tool that allows us to analyze how and where to improve. Almost 80% of our subsidiaries worldwide are now certified. And in Belgium, all our categories are B Corp certified. NM This may also help to attract the younger generation who are particularly sensitive to these social and environmental issues. Danone products were absent from many shelves because of an excessive price increase that large retailers refused. How do you analyze this episode? NPS The health crisis, the rise in the prices of raw materials or energy are crises that affect everyone. This is a reality for the entire chain, consumers, businesses and retailers. We recorded an increase in our production costs between 16 and 20%. We decided to bear half of it because we felt it was also our responsibility, but we had to pass the other half. We don’t decide the price to the consumer. We work with all partners to ensure that everyone takes their responsibilities. As a multinational, you have a bargaining power that some don’t. Is this an advantage, in your opinion? NPS Being a great brand is both a strength and a weakness. Yes we can negotiate as we are big enough. But it is precisely because we are big that the economic consequences are multiplied. Consumers are turning more to own brands which are generally less expensive. Is it complicated to be a big brand in times of crisis? NPS We know that consumers pay more attention to their budget and seek the lowest price. They only take what they need. Our products are in the category of necessary food products. We therefore need, as a brand, to be able to remain a consumption habit. This requires innovation and optimization of production costs while remaining accessible. The consumer can choose committed purchases with essential and responsible products, even if they are sometimes more expensive. You want a revaluation of the food chain. Does this require a price increase for the consumer? NPS It’s not so much a question of price but more of the value of the product. Consumers have lost the value of food as they have become accustomed to low retail prices. Paying less in food affects the quality of products with less natural, less nutritious and less environmentally friendly ingredients. How does a multinational adapt to the consumer in order to remain among their favorite brands? NPS We define ourselves as a “multi-local”, this means that we are a multinational with local roots in each country where we are present. There is nothing more local than food, so we have to adapt our brands to consumer habits, and that means taste. In Belgium, for example, we launched a Danio with speculoos, while in the United States, they are pumpkin. Prices are sometimes lower in countries neighboring Belgium. How do you explain it? NPS In Belgium, salary indexation must be taken into account, which does not exist in France or the Netherlands, for example. Energy prices are also lower in France. Added to this are taxes relating to companies, packaging and production methods. This tax lasagna – which I call a mille-feuille – has price implications at the consumer level. The price gap needs to be monitored to avoid cross-border shopping which is not good for business or government. Is it really realistic to want to ensure economic profitability while guaranteeing sustainability and a positive social impact? NPS We equate profit, sustainability, health and employees and aim to maintain this balance. Is it easy? Of course not, but we have commitments to respect. Without economic performance, it is impossible to create a strong brand that consumers will turn to. Our strategy is to offer products that are good for health, without compromising on the environment and sustainability, in order to have a large-scale change. Being sustainable also makes it possible to be economically profitable, we see this with energy.