Two yogurt tasters are testing the flavor and aroma of the products that the multinational Danone is researching in a laboratory and that will hit store shelves in a few months. In another nearby room, several researchers are analyzing the ferments that they will use to produce dairy products. This is the new innovation center that the food group founded in Barcelona, and based in Paris, has inaugurated this week in the French city of Saclay and which is the star of its business strategy.
With an initial investment of one hundred million euros in the land, Danone has built a scientific hub in which 550 specialists will investigate and devise the products that it will sell in the coming years and that will allow it to set ground against the competition, in which each Once again, the private label plays a more important role. Distributor foods have increased their share this past year driven by the inflationary spiral that is plaguing Europe. In Spain, the CPI for food reached 15.7% in December and the reduction in VAT on basic products approved by the Government has had a reduced impact on prices and the monetary effort of households.
Thus, consumers have changed their purchasing habits and the distribution brand has gained a presence in the shopping cart. In Spain, private label products reached a share of 46% last year compared to 54% for the manufacturer. The growth of the first group in one year has been 2.6%, according to data from NielsenIQ. The same is true, to a greater or lesser extent, in the vast majority of European countries. Portugal, Germany, France or Italy are also experiencing advances in the private label.
What can manufacturers do to keep the consumer? Competing on price is difficult. Danone has recently launched a campaign in which it reduces the price of its most popular yoghurts. A way to retain customers and re-attract those who have switched to other, cheaper brands. But what really makes the difference is innovation and the launch of products that keep up with new social trends, says Isabelle Esser, Danone's director of research, innovation and quality.
"Innovation makes it possible to add value, either with a better texture of the product, a more pleasant taste or as a response to the nutritional needs of consumers", explains Esser from Saclay. “You have to be different,” he adds.
This new center will focus on the fermentation process of both dairy and plant-based products, as well as mineral waters. “Dairy is still our core business, but we are seeing a fantastic acceleration in plant-based foods,” continues Esser. Added to this is the entry of products rich in protein. “The world population is increasing and with it the need for protein; we will need protein from animal sources, from plants, and probably from biotechnology as well. We are still in the research phase, but we need large sources of protein and we see potential in this axis ”, he underlines.
This work helps the company to stay one step ahead of the competition and offer alternatives and new lines that the private label has not yet reached.
Danone is also confident that the processes to be investigated at its new center – such as packaging alternatives or product formulation efficiencies – will contribute to reducing total costs for the company.
The group billed 24,281 million euros in 2021, 3.4% more. During the first nine months of the last financial year –whose full results will be presented on February 22– sales amounted to 20,700 million euros. The increase in sales in the third quarter made him raise his growth forecast for 2022, to around 7%.
The company that Antoine de Saint-Affrique has run since 2021 raised prices to offset the high costs borne by the entire agri-food industry since the war broke out in Ukraine. Price increases contributed 10.9% to revenue growth in the third quarter.
With a presence in more than 120 countries, Spain ranks eighth in terms of business volume. The United States, China and France make up the top three for Danone.
