Danone targets new consumers and markets

30 June 2010

SENEGAL: Danone, the food group, is heightening its focus on serving many of the world's poorest consumers living in Africa, Asia and South America.

With sales momentum slowing in Western Europe and North America, Danone is just one of a growing list of multinationals that are now targeting shoppers on considerably more limited incomes across the globe.

Among the company's primary low-cost brands are sachets of Dolima drinkable yoghurt and individual cups of mineral water.

Last year, 42% of Danone's sales were drawn from emerging markets, up from 6% only ten years ago.

The dairy giant is now aiming to reach one billion customers in these areas a month by 2013, compared with some 700 million today.

"The objective is to do business, not just with the top of the pyramid," Franck Riboud, Danone's chief executive, argued.

Elsewhere, Adidas, the sports brand, is experimenting with a training shoe that costs €1 ($1.21; £.80), which it has rolled out in Bangladesh.

L'Oréal, the cosmetics specialist, is putting its weight behind trial-sized packets of shampoo and face cream available for the equivalent of a few cents in India.

Unilever, the FMCG giant has also introduced Cubitos, or small cubes of flavouring costing as little as two cents each, specifically for developing nations.

But analysts warn that manufacturers will have to slash prices more drastically if they are to make any long-term headway from this kind of activity.

Data sourced from Wall Street Journal; additional content by Warc staff