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Danone is looking at developing more affordable, healthy options in response to changing consumer demands amid the coronavirus crisis, which at its height drove a rapid rise in food prices.
Emmanuel Faber, chief executive of multinational food and drinks group Danone BN, +1.47%, said that he believed people will move to healthier versions of comfort foods and will have to rebalance their diets as the pandemic continues.
“Right after health, food is the second item on people’s minds — we’ve seen that with the panic buying and pantry stockpiling of comfort foods at the start of the pandemic. That’s OK for two months, but as the lockdown continues and people aren’t exercising and staying at home, people will also need to have more affordable options,” Faber told MarketWatch in a telephone interview.
“Unfortunately not everyone will be able to indulge themselves with high-priced food. So for people who can’t really afford this, we are developing more affordable yet more nutritionally balanced options,” he added.
At the peak of the pandemic in April, the U.S. Bureau of Labor Statistics reported that grocery store prices experienced the largest monthly rise since February 1974. In Europe, food prices also crept up during lockdowns. In Germany, for example, food prices rose nearly 10% year-over-year in April, according to consumer association UFC-Que Choisir.
Read:Grocery prices are rising as eat-at-home demand soars during the coronavirus pandemic
Based in Paris, Danone DANOY, +1.22% sells a portfolio of well-recognized products, which range from Danone — Dannon in the U.S. — yogurt brands, including Actimel and Activia, to Evian bottled water, and baby milk formulas, including Cow & Gate, to more than 130 countries across Europe, America, Asia and Africa.
As the COVID-19 pandemic continues, Faber wants to ensure sustainability continues to be at the core of Danone’s strategy. In recent years, he has been shifting the group’s portfolio into fast-growing areas such as probiotics, plant-based and genetically modified-free products to encourage consumers to adopt healthier and more sustainable eating and drinking habits.
Read:Danone’s Annual Meeting Starts Friday. What Its CEO Says About Health Food and Having a Mission.
This strategy was accelerated with the acquisition of U.S. organic-foods producer WhiteWave, which Danone bought in 2016 for $10.4 billion. Danone North America teamed up with San Francisco-based biotechnology company Brightseed in June to investigate plant sources such as soybeans for unknown health and nutrition benefits.
On June 26, Danone won the support of more than 99% of its shareholders at its annual general meeting to became the first listed company to adopt the “entreprise à mission” model, which officially embeds environmental, social and governance goals (ESG) in the company’s bylaws.
The move reflects Faber’s commitment to position Danone as a purposeful business with a remit to create value not just for shareholders but for all its stakeholders.
