In a round table held by Aspen Institute in June 2023, Shane Grant, Danone's CEO of Americas, shared examples on how the company uses purpose to guide its key business decisions and strategies.
Purpose Guides the Business Growth Engines
Grant explains that its purpose is about the business. In other words, that purpose is integrated in what they sell, how they sell, and where they sell it. Specifically, the purpose has to inform how the business evolves. Today Danone’s growth engines are low and no sugar, gut health, plant-based, and high protein, but its growth engines are fully consistent with its purpose of “health through food to as many people as possible.” Their business is growing while their purpose is being realized.
Purpose Guides the Social Responsibility Decisions
Once again, Danone's purpose is: bringing health through food to as many people as possible. Through the lens of their purpose, Danone decides if they weigh in or not on social issues. As Grant explains, they do not step into an issue if it is not deeply connected to their business or their purpose.
One example of an issue they stepped in was the infant formula shortage crisis in the US. At the time, while Danone had a global footprint for its infant formula business, in the US, they did not truly have a meaningful presence. For Danone, there was significant risk entering the infant formula business especially during a pandemic, but because this was a health issue, they made the decision to bring almost 2 million units of their brand Aptamil into US with the help of the government and retail partners. As Grant states, "these are big societal moments where it's really important that we make the right decision to step in." And purpose informs these kinds of decisions.
Purpose Guides Market Definition
The above example shows us how Danone uses the first part of their purpose to guide their social initiatives. Danone also uses the second part, "as many people as possible," as a guide.
To connect purpose to strategy to execution, it all begins with interpreting the purpose. For Danone, it means thinking about what "to as many people as possible" means. At the executional level, this means questioning the accessibility of their products. Grant elaborates,
"Can all levels of the socio economic spectrum access Danone's brands? And concretely, where are the brands available? They are available in Whole Foods, but are they available in a discount dollar store? Are they available in relevant small packages that people can access? And so it comes down to operation decisions that prove to ourselves, to our partners, to our people, that we really mean it."
In 2019, Danone launched a new brand in the US called Two Good, which is a great example of a brand manifesting its purpose. Two Good is a creamy dairy yogurt with zero added sugar, which addresses consumers' in less sugar and healthy options. The brand also helps accessibility to healthy foods by donating to food rescue organizations when consumers buy the product.
"Hardwiring" the purpose into the business
"If you're serious about the purpose manifesting and showing up, you have to hardwire the purpose into the business and hardwire the purpose most concretely into what you sell," explains Grant. The above examples show us how Danone used the purpose to guide their CSR activities and the core business. There are no shortcuts to becoming purpose-driven, but if there was one, it would be what Danone has shown above. Take your purpose and wire it to the key decisions your company has to make at all levels of your business.
Purpose must be inspiring and functional
For Danone, their purpose has two key components that guide business decisions:
Bring health through food
To as many people as possible
Their purpose and above example offers a lesson on articulating purpose. Purpose statements should be inspiring, but at the final stages of articulating purpose, companies must also make sure the purpose is structured well so that it is effective at guiding business decisions.