Real world stories about innovators and innovative companies are an important way to learn and we place high value on them at Innovation Excellence. We are very pleased to begin a series of case studies on companies who have been curated by Hult International Business School and Center for Innovation, Excellence and Leadership (IXL Center) in their book Greenovate!
The book Greenovate! documents 53 case studies that are defined by “sustainable, green innovations” (or “green ovations”). Each profile combines business innovation with a synthesized concept of sustainability, from startups to leading global organizations. The next case study in this special Greenovate! case study series is:
GRAMEEN-DANONE – Eco-Friendly Mini-Factory for Food
A small capacity yogurt factory built to address malnourishment and poverty using sustainable local resources and a novel business model
INNOVATION
Grameen Bank and Groupe Danone have partnered to develop a self-sustaining enterprise business that produces fortified yogurt for the local community using only local resources and sales and distribution capabilities in Bogra, Bangladesh
SUSTAINABILITY
The factory uses renewable resources such as solar energy and rainwater recycling. Yogurt is packaged in biodegradable cups made from cornstarch.
RESULTS
The factory produces 22,000 pounds daily, enough to provide breakfast for 130,000 children; the successful pilot is now being scaled up. Yogurt is priced as low as $0.09 per 2.1 ounce serving, making it affordable to the poorest people
DRIVERS
LEADER’S VISION:
The CEOs of Grameen Bank in Bangladesh and Groupe Danone in France — Dr. Muhammad Yunus and Franck Riboud — joined efforts to maximize the positive social and green impact of their businesses
HIGH POVERTY:
Bangladesh is one of the world’s poorest countries with about 40% of the population living under the poverty level — many on less than $3 per day
MALNOURISHED CHILDREN:
54% of preschool-age children are stunted, 56% are underweight and 17% are on the verge of starvation — many also suffer from deficiencies of vitamin A, iron, iodine and zinc
BARRIERS
MILK SUPPLY:
The location of farmers in remote areas combined with the absence of refrigerated trucks often made transporting milk to traditional processing factories time-consuming and impractical
LACK OF INFRASTRUCTURE:
Danone’s distribution system, which employs refrigerated trucks and air-conditioned warehouses common in developed countries, was not suitable for Bangladesh
CHILDREN DISLIKE PRODUCT:
The new yogurt “Shokti Doi” was fortified with Vitamin A, iron, calcium, zinc, protein and iodine, but the first samples were rejected by children because it was too runny and not sweet enough
ENABLERS
COMMITTED PARTNERS:
Working with the International Cooperative Alliance (ICA) from Switzerland, Grameen Danone identified an enzyme used in Brazil which could preserve milk during the required transport time
NEW DISTRIBUTION MODEL:
The company uses door-to-door sales by the “Grameen Ladies”– micro-entrepreneurs selling yogurt from the mini-factory to Bogra and surrounding villages
INVOLVE THE CONSUMERS:
Danone experts improved yogurt with syrup made from locally grown date palms, a traditional sweetener, and refined the level of sweetness by using taste trials
IMPACT
INTERNAL:
Exploiting this new production, supply and distribution model, Grameen Danone has launched new products and doubled its annual sales during its first three years
EMPLOYMENT OPPORTUNITIES:
The company provides jobs to the local community — the door-to-door selling model employs about 500 women and about 50 factory workers
IMPROVED NUTRITION:
One container of the yogurt provides 30% of a child’s daily requirement of vitamins, iron, zinc and iodine
WHAT’S NEXT
After the initial success in Bogra, Grameen Danone Foods Ltd. plans to build 50 mini-factories by 2020, each with an annual production capacity of 3,000 tons, thus meeting the needs of 150 million people
image credit: danone.com
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Tyler McNally, Ronald Jonash & Dr. Hitendra Patel are co-authors of Greenovate! — Companies Innovating to Create a More Sustainable World and members of the leadership team at IXL CENTER, the Center for Innovation, Excellence & Leadership at Hult International Business School.
