The sustainability road has been a long one for global food and beverage company Danone. The biomass facility coming online at its New Zealand Nutricia plant this year is the latest milestone. Kim Berry writes. This article first appeared in the March edition of Food & Drink Business.
In 1973, Danone’s then CEO Antoine Riboud gave a landmark speech on the idea a company can not only fulfil its economic obligations, but also be a force for good in society.
This marked the birth of what Danone calls it ‘dual commitment’, which encompasses the creation of economic value (or returns for shareholders), as well as social value. In 2017, it articulated this even further: One Planet, One Health.
Danone head of corporate affairs Scott Pettet told Food & Drink Business that the company’s philosophy is that you can’t produce healthy food if you don’t have a healthy planet.
To that end, there has been a steady rate of change to meet the expectations of a company that is making such claims. Danone approaches it as four pillars: climate change; water stewardship; regenerative agriculture; and a circular economy for packaging.
“Quantum leaps of change are difficult, while incremental gains over time are realistic and effective,” Pettet says.
The company has demonstrated its commitment with a range of bold ambitions. Goals include being carbon neutral across its full scope by 2050, and reducing water consumption across its production sites by 60 per cent. Most pressing is its plan to have 100 per cent of packaging recyclable, reusable or compostable by 2025.
Global ambition with local impact
At its spray drying facility on NewZealand’s South Island, Danone is investing significantly to reduce its carbon emissions, with the end goal being a carbon neutral production facility.
In 2020, the company commenced installation of a $28 million (NZ$30m) biomass boiler to provide renewable heat, which comes into operation this year.
“Biomass is not unique as a technology, but in this application it is quite uncommon at the moment with many processors around the world still relying on coal or gas. The boiler will be fuelled by locally sourced wood waste from sustainable forestry operations within 50 kilometres of the plant.
“Keeping it local also ensure a broader economic benefit for the community, including the creation of jobs,” Pettet says.
Danone’s commitment to biomass is global, with its Wexford plant in Ireland already carbon neutral, largely due to the impact of the biomass technology.
Such projects are complex and take years to plan and execute, often with hurdles associated with the application of relatively new technologies.
The company has also announced it will move to 100 per cent renewable electricity for all of its New Zealand plants this year.
“Switching to renewables and using biomass will reduce CO2 emissions by around ninety-five per cent at our Balclutha plant. This equates to CO2 emissions reductions in excess of 20,000 tonnes per year,” Pettet says.
Decarbonising vs carbon offsets
The adaptation to more sustainable operations takes time and a range of commitments. Pettet says criticism of companies just using offsets can sometimes be justified, with changes to practices ultimately the most important step.
“We ask ourselves a series of questions, how much can we eliminate through re-engineering or new technologies? What does that mean from a product perspective? How are we being responsible, ethical and environmentally conscious to meet consumer demand?
“Of course we look at the economic costs and implications, but it is also taking in the dimension of societal value and what we are contributing in that realm.”
The changes to the New Zealand plant are one part of a global goal for Danone to align its businesses worldwide on carbon neutrality.
In October 2020, the company’s infant formula brand Karicare committed to reduce and offset 100 per cent of its carbon emissions at each stage of the product lifecycle by 2030.
The new Karicare Gold Plus+ Organic will be among the first products to be certified carbon neutral by 2022, with other products in the Karicare range progressively certified up to 2030.
“By making changes to our manufacturing systems and moving to low-carbon processing and production, we can start to do some really interesting things from a product perspective,” Pettet says.
“By taking a carbon neutral stance with Karicare we are giving consumers the opportunity to vote for the kind of world they want when they make purchasing decisions.
“This is becoming increasingly important as consumers become much more informed on topics like climate change, plastics and recycling. They want to be able to make a difference and know they’re not contributing to the problem through the purchase decisions they make.”
Over the last 50 years, Danone set itself numerous challenges to meet its ambition for business success and societal contribution.
With many large scale changes now in place, opportunities for product and process innovation abound.