Social Business: Overview of Grameen Danone Essay

Grameen Danone Grameen Danone Foods, popularly known as “Grameen Danone” is a social business enterprise which, launched in 2006, has been designed to provide children with many of the key nutrients that are typically missing from their diet in rural Bangladesh. This is run on ‘No loss, No dividend basis. During his visit to Paris, France, in 2005, Professor Muhammad Yunus, the founder of Grameen Bank was invited by Franck Riboud, the chief executive officer of Groupe Danone (known as Dannon in the USA).

On 12 October 2005, they met in La Fontaine Gaillon, a Parisian restaurant. There Yunus proposed to form a joint venture between Grameen and Danone with the objective of supplying nutritious food to poor children of Bangladesh. As proposed by Muhammad Yunus, Franck Riboud agreed to participate in the project to be styled a social business.

Accordingly, the Grameen Group and Groupe Danone entered into an agreement to form a company called Grameen Danone Foods – a social business enterprise in Bangladesh.The objective was to bring daily healthy nutrition to low income nutritionally deprived populations in Bangladesh and alleviate poverty through the implementation of a unique community based business model, where no profit will be appropriated by the investing partners. World famous soccer star Zinedine Zidane of France flew to Bangladesh on a two-day visit to inaugurate the launching of Grameen Danone Foods Ltd. on 8 November of 2006. Grameen Danone Foods Ltd. s a social business enterprise undertaken by four Grameen companies, namely, Grameen Byabosha Bikash, Grameen Kalyan, Grameen Shakti and Grameen Telecom and Groupe Danone of France whose objective is to help eradicate poverty by providing nutritious dairy food for children in the rural areas. It is planned that 50 additional dairy plants would be set up in the next 10 years (from 2006) in the rural areas of Bangladesh. Grameen Danone Foods Ltd.

roduces a special yogurt called Shakti Doi from pure full cream milk that contains protein, vitamins, iron, calcium, zinc and other micronutrients to fulfill the nutritional requirements of children of Bangladesh and contribute in improving their health. While ‘Shakti Doi’ (which means ‘power yogurt’) is primarily intended for children, it is also appropriate for adults. The price of each 80 gram cup of yogurt is Taka 5 only equivalent to Euro 0. 05 (five cents). It is an affordable price even for the poor people of Bangladesh.

Grameen Danone Foods will reduce poverty by creating business and employment opportunities for local people since raw materials including milk needed for production, will be sourced locally. The companies that make up Grameen Danone Foods Ltd. have agreed not to take out any of the profits out of the company. Instead they will invest these for creation of new opportunities for the welfare and development of people. Hence it is called ‘social business enterprise’.

Grameen Danone has planned to set up and launch as many as 50 production plants during the ten years between 2006 and 2016.The first factory has been built in Bogra district which is about 230 km north of Dhaka, the capital city of Bangladesh. The first factory is a small one built upon an area of 7,000 sq ft.

Its daily production capacity was 3,000 kg of yogurt when launched in 2006. In 2008, the production capacity has been planned to be enhanced to 10,000 kg and beyond. Several hundred livestock-farming and distribution jobs would be created in the local community as a result of establishment of the first factory.