Sustainability Series: The Dannon Company, Inc.
October 29, 2013
Headquartered in White Plains, New York, The Dannon Company, Inc., sells and produces more than 10 million cups of yogurt a day in about 200 flavors, styles and sizes. The top-selling brand of yogurt worldwide, Dannon® is sold under the names Dannon and Danone. Danone was founded in Spain by Issac Carasso in 1919, and in the USA by Issac’s son Daniel in 1942. The company prides itself on consistently delivering high-quality, wholesome products. We talked to Michael J. Neuwirth, Senior Director of Public Relations for Dannon, about tackling sustainability from the perspective of both health and environmental issues.
How does your business define sustainability?
More than 40 years ago, our company made a commitment to balance economic and social priorities, recognizing that both must be sustainable in order for the enterprise to succeed.
Today at Dannon we maintain this commitment by keeping four key areas of our business in balance as we make decisions, and these are: health and well-being, community impact, environment, and financial performance. We realize these priorities in myriad ways every day with examples including: making our products more nutritious, light-weighting of our packaging, supporting physical activity in schools, optimizing transportation, and, of course, increasing the frequency with which people choose to enjoy yogurt.
How are you incorporating sustainable practices into your business?
In 2012, we reduced the carbon footprint of The Dannon Company by 4.68%. As a result of projects from across the world (including Dannon USA), our parent company Danone reached its 2008-2012 goal to reduce its carbon footprint by 30%.
Many sustainable practices have been adopted to accomplish this, including the way we multi-source production of our yogurt to reduce distances to ship to customers, provide fresher product, and yield a reduced environmental impact when compared to producing from a single location for U.S. distribution. In 2012, due to multi-sourced production, miles traveled were reduced by 1.8 million, saving 292,000 gallons of fuel and $2.86 million, which contributed 2.34% carbon footprint reduction to our Supply Chain team’s overall 3.7% carbon footprint reduction.
In terms of agriculture, our plant in Fort Worth, TX received its first shipment of condensed milk from McCarty Family Farms in April 2012. This grew out of a relationship that began in between Dannon and the McCartys, a family farm based in Kansas, whereby McCarty Family Farms would provide 100% of the milk used by Dannon’s Fort Worth, TX plant, thus enabling Dannon to build a direct relationship with dairy farms and continuously improve on environmental sustainability. With Dannon’s support, the McCartys have built an on-farm condensing plant to supply Dannon with condensed skim milk and pasteurized cream. Condensing the milk on site at the farm reduces the environmental impact of shipping and allows for on-farm reuse of water retrieved during condensing.
When we look at the life cycle of the yogurts we make, we realize a lot of opportunities, many of which we are already acting on. This includes our sourcing of milk from farms located as close as possible to our factories. In terms of energy use, over the last five years we have upgraded utility systems at each of our production plants, resulting in usage reductions in electrical (~35%), gas (~31%), and water (~31%).
From a packaging perspective, our investments in additional Form-Filled Seal (FFS) packaging lines allow us to continue to reduce plastic consumption and reduce the need to transport empty pre-formed cups before they are filled. Form-Filled Seal packaging allows us to make the cups we use to package yogurt from roll stock that is heated and formed into cups immediately before they are filled on the packaging line.
And lastly, more than 95% of Dannon’s products are carried by trucking companies participating in the United States Environmental Protection Agency’s Smartway Transportation partnership, a program aimed at improving mileage for trucks and reducing carbon dioxide emissions through improvements in truck design.
What are your short term and long term goals?
Every day we strive to reduce the environmental impact of our operations throughout the life cycle of the foods we make, while at the same time maximizing the impact on our social priorities.
Specific to carbon, we seek to reduce our carbon footprint and help keep carbon in soil and forests. Specific to packaging, we seek to source materials from sustainable resources and turn waste into a resource. Specific to agriculture, we seek to support competitive agriculture that creates social value, respects natural ecosystems and generates better nutritional balance. And specific to water, we seek to protect and help restore water to whom and where it matters most.
Where do you think you’ll have the biggest impact?
Our biggest environmental impact today originates with the milk we use to make yogurt and that is where we believe we can have the greatest impact over the long term both in terms of how the milk is produced and transported. Our work and initial results with McCarty Family Farms is a testament to progress in this area.
We believe new partnership models for working with farmers can enable us to work together to reduce our carbon and water footprint on farm, as well as implement waste and energy management initiatives.
How do you measure your progress?
As one of Danone's subsidiaries, Dannon participates in annual environmental benchmarking and reporting across the plants and facilities that are within our operational control. Through this reporting we are measuring, managing, and improving our use of energy, water, COD, waste, carbon, and greenhouse gas emissions. Additionally, we publish an annual sustainable development overview, which we make available to the public on our website.
How do retailers factor into your efforts?
Working with retailers, we begin by understanding the customer's core business priorities – some of which include initiatives around environmental sustainability – and we work in partnership to create "win-win" opportunities for our customer/the retailer and Dannon. A good example of this is our work with select customers to focus merchandising on form-fill-seal packaging, which has a smaller environmental impact than a pre-formed cup.
Why are sustainable business practices important to the food industry?
From the perspective of nature, the food we make is derived from agriculture, and agriculture impacts our earth. Additionally, as food is made and packaged to ensure its safety, quality and taste, there are impacts on carbon, energy, and waste. Finally, some food, like our yogurt, requires refrigeration, which has an impact on energy use.
From the perspective of health, nutritious food is essential, and by making and promoting better-for-you foods we are contributing to the wellbeing of the general population.
Why are sustainable business practices important to the consumer?
Many people today are focused on the origin of the products they consume and the practices that occur at that origin – for example, dairy or fruit environmental and social management practices on farm. When it comes to food choices people are most often influenced by taste, price, and accessibility. However, in addition, sustainable business practices when communicated to or known by the consumer can create a sense of trust and confidence in a particular brand.