As the largest supplier of fresh dairy products in the world, €13 billion in sales last year, and offices in more than 120 countries, there is no doubt about the expanse of Groupe Danone’s reach. Yet, their 2005 Social and Environmental Responsibility Report has a section called: “Serving the Local Community All Around the World” – a seemingly contradictory statement for what hardly seems like a local operation.

However, a new venture in Bangladesh addresses this seemingly conflictual statement and proves that it is in the best interest of corporations to seek out the ‘local’ and invest in them not as charity cases but viable business partners. On November 8, 2006, Grameen Group and Groupe Danone opened the first factory of Grameen Danone Foods, a 50-50 business partnership between the companies to locally produce and sell nutritionally enhanced yogurt products. Specifically, the yogurt will contain iron, zinc, and iodine supplements to begin addressing the needs of a country where 48 percent of children under five are malnourished. Located in Bogra, 150 kilometers north of Dhaka, Bangladesh’s capital, the new venture is expected to create over 1000 livestock and distribution jobs to community members previously trained in micro finance. With Grameen’s partnership, Danone has effectively engaged one of the pre-eminent ‘local’ groups.

For the members of the corporation, this partnership is a calculated business investment, part of their global strategy in pursuit of profit -- this is not a ‘feel good’ corporate social responsibility project. “The important thing to remember is that there is no conflict between the demands of business and those of social progress. On the contrary –only an economically viable solution can bring people lasting benefits,” Danone CEO Franck Riboud states in their annual report. In Bangladesh, their business interests are as focused and intense as they are within their Evian division. But their approach has shifted.

In South Africa, Danone coordinates a group of women titled ‘Daniladies’ who sell yogurt in the townships and slums at affordable prices. To finance the project, Danone abandoned their normal advertising budget, relying on word of mouth and door to door sales in order to expand market share. While this approach is novel, they never shifted production to a local model or actively engaged the local community in the process. In Bangladesh, this is the shift – takings years to capture the opinions and knowledge of villagers in and around Bogra at all steps of the process, from brainstorming sessions, to production, to sales.

Indicative of this shift is the partnership with, not acquisition of, Grameen Group. Such an approach is telling of an admission by the corporation that knowledge on the ground, knowledge that they don’t have, is essential in creating a viable business plan. This approach is a reversal of common business practices in emerging markets, a reversal of power flows that usually have corporations telling local persons what to do better, more efficiently.

A pioneer of micro credit, Grameen Bank is heralded for its work combating the lowest, most dire forms of rural poverty. With 5.8 million borrowers, the same people who own the bank, it makes small loans averaging $120. While known especially for their lending practices of seed money to women for micro enterprises, the Grameen Group is also shifting paradigms, advancing beyond micro credit proper into more nuanced, long-term, business solutions to poverty for villages, and malnutrition for individuals. Dr. Muhammad Yunus, recent winner of the Nobel Prize, said of the new business venture:
This represents a unique initiative in creating a social business enterprise, i.e. an enterprise created not to maximize profit, but created with a declared mission to maximize benefits to the people served, without incurring losses. It is a small project to begin with, but contains the seed of a new breed of business, which can change the economic world fundamentally... this is not a fancy idea of a graduate student, but this is a serious business - business to make a difference to the world.’
What results, is a business model that seems, in its design, consistent with a 50-50 approach, each partner contributing their unique skills towards a clearly stated, mutual goal.

This design states, according to a press release from Danone, “Grameen Danone Foods' mission will be to bring daily healthy nutrition to low income, nutritionally deprived populations in Bangladesh and alleviate poverty through the implementation of a unique proximity business model.”

While this endeavour is new for these two companies, the idea of selling affordable, nutritious food products to the poor is not. For example, Promasidor has been selling small sachels of powdered milk and food supplements in Africa for 20 years. But, they are a family owned company. For Danone, a company that charted 6 percent growth last fiscal year, there is a difference. As a publicly owned company, recently rumoured to be bided on by Pepsi, profit is the bottom line – this project must make money.

This venture sits within a burgeoning trend among the business community: a transition towards sustainable business models. The UN calls it ‘Responsible Entrepreneurship’ and defines it as: “A concept and a process whereby entrepreneurial enterprises integrate social and environmental concerns in their business operations and in their interactions with their stakeholders.”1 As 50 percent of Bangladesh’s population lives below the poverty line (World Bank, 2000) the need to create jobs with a livable wage is immediate.

There is no contradiction here, this model is different and locally concerned; “With this initiative, social impact on local community takes prece¬dence over the need to maximize profits and share them with local communities,” concludes Groupe Danone Executive Vice-President of Asia Pacific Emmanuel Faber.

Aaron Charlop-Powers is a student at the University of North Carolina, Chapel Hill. He worked with Carolina for Kibera in Kenya. His email is thelastcp@gmail.com