New York, New York, October 4, 2018
Danone North America CEO Mariano Lozano shared insights and lessons learned from Danone’s soil health initiatives and led a discussion on how soil and carbon drawdown represent a promising path to reversing the climate crisis faced by our global food system. Danone, the world’s largest B-Corporation, is working in partnership with Green America. Alisa Gravtiz, CEO of Green America, joined us to share her perspectives.
“When we moved away from GMO, we lost some old friends - but made some new ones.” - Mariano Lozano, Danone
“Everything must be aligned with the Big Goal, including the bottom line and business incentives. Danone has a business model that allowed the systems change to occur.” - Alisa Gravitz, Green America
Presentations
Central Takeaways
Mariano Lozano shared how Danone is fulfilling its commitment to Sustainable Agriculture and its goal to Preserve and Renew the Planets Resources by creating systems change throughout the organization.
- Leadership and incentives work together to make the transition to sustainability a reality. For Danone this starts with the CEO Emmanuel Faber. The company has a team of 150 working on the B-Corp process and the Soil Health Program lies with the Director of Agriculture - not with the Corporate Social Responsibility side of the company.
- A vertically-integrated business model has been key to Danone’s success. The organization is removing GMO ingredients from many of its products and is seeking to evolve sustainable agriculture practices for all its product portfolio. Its commitment to animal welfare and better agriculture practices has worked because of Danone’s business model. It realigned the entire organization with its goal and was able to work directly with farmers, getting them on board with the company’s transition.
- Sharing the risk with farmers. Starting in 2011, Danone began following a Cost-Plus Model where the company will bear the cost of transitioning to sustainable practices. The company established long-term relationship contracts with 40% of the farmers it works with that secured a guaranteed independent price for the good. The transition costs were less expensive than anticipated, indicating that sustainable agriculture and non-GMO practices are economically viable.
- Soil health is part of the equation. Danone developed a Soil Health Program to “establish healthier soils for future generations“. Once the organization removed its focus and reliance upon GMO seeds, it was forced to “develop a holistic agricultural perspective.” The program focuses on implementing non-tilling, cover-crop rotation, and better water management practices to increase the soils’ concentration of organic matter.
- Systems change is dependent upon economic viability. At the center of Danone’s sustainability initiatives is its goal to Grow Manifesto Brands. Brands are needed to carry Danone’s message - the pledge to non-GMOs and more sustainable practices - to the consumer. An increase in sales and a demonstrated profitability of a sustainable business model are vital.
- Importance of partnerships and collaboration. Danone has relied on partnerships with experts in sustainable practices to fill its knowledge gaps. Partners include Green America, Cornell University, the Ohio State University, and the Soil Health Institute. Alisa Gravitz highlighted the integral role these partnership play, stating, “There is a need to bring players through the whole system into the room, not just getting people into a room who are just like each other. Through convening it becomes possible to identify where the system’s change points are that can be influenced.”
- Call to action: a need for consistent data collection and information sharing. There is a lack of data and a need for scientific validation that illustrates the sustainable agriculture business models’ resilience and yields. For the larger players in the food system, this is particularly important to make the business case for sustainable agricultural and transitioning to non-GMOs.
About the Speakers & Organizations
- Mariano Lozano is the North American CEO of Danone. Danone is an global, health focused, food and beverage company that has committed improving the planet and consumers’ health, resulting in its becoming the largest Certified B Corporation in the world. Danone earned the certification in April 2018, a commendable feat because only 4% of companies that start the verification process earn the certification. Danone was inspired by the Sustainable Development Goals to develop Danone Goals by 2030, focusing on transforming its business model, brand model, and trust model towards sustainable practices.
- Alisa Gravitz is the CEO of Green America. Green America is a membership-based non-profit that seeks to create a socially just and environmentally sustainable society through harnessing economic powers, including consumers, investors, businesses, and the marketplace. Green America knows that systems change is not a solitary feat, so it seeks to facilitate collaborations that can make change happen. At the start of Danone’s transformation, it sought to fill its knowledge gap with expert partners, leading to a partnership and continued collaboration between Danone and Green America.