Case Study: The Dannon Company Essay
According to The History of Danone (2009), Isaac Carasso was inspired by the research of Elie Metchnikof, and in 1919 he began using ferments from the Pasteur Institute to manufacture yogurts to sell on prescription to pharmacies in Barcelona, Spain. Carasso began this work, because he saw an opportunity to help the number of children suffering from intestinal disorders, due the lack of healthy nutrition following the First World War. By 1929, Daniel Carasso, Isaac’s son, continued to grow the company by launching the company Danone in Paris. Business for Danone continued to prosper in Paris until 1941, when Daniel Carasso was forced to leave France during the German invasion. Leaving behind the Danone foundations in Spain and France, Daniel fled to the United States, where he founded The Dannon Company (Dannon) in 1942. After returning to France in 1945, he put all his efforts in rebuilding the original Danone he had started sixteen years earlier. In the process of building Danone, he decided to sell the US Dannon to Beatrice Foods in 1959, which later sold it back to Danone in 1981. Now Dannon operates in the US, as a wholly owned subsidiary of Danone, and is has its headquarters located in White Plains, New York. Dannon currently employs more than 1300 people, and produces more than 100 dairy based products (“2011 Sustainable,” 2011). Dannon follows closely in the footsteps of its parent company, by actively working to maintain a high level of commitment to Corporate Social Responsibility (Marquis, Pooja, Tolleson, & Thomason, 2011). According to the “2011 Sustainable” (2011) report, Dannon strives to incorporate CSR into its daily activities by integrating social goals with economic goals, and using its mission as a way to inspire the success of its progress. The case study takes a closer look at the strategy Michael Neuwirth, senior director of public relations for Dannon, deployed to determine how Dannon should communicate its CSR initiatives, or if Dannon should even invest assets at all into communicating the CSR initiatives of the company (Marquis et al., 2011).
By looking at the history and mission of Dannon, in relationship to its parent company Danone, Marquis et al. (2011) examine the collaborative efforts of Neuwirth, along with other department heads, to find measurable impact of such a communication strategy. Much of the concern for Neuwirth, throughout the case study, was in reverting back to the mission statement of Dannon and how it aligned with the philosophies of Danone, and ensuring that any actions taken supported the vision and mission of the company. To Communicate or Not to Communicate?
The case study points out that Neuwirth was working on the concept of the project in the beginning of 2009, and it is of considerable note to point out that Dannon released its, “2009 Corporate Social Responsibility Activities” report on Aug 02, 2010 (CSR Press Release, 2010). From every aspect of the case study, one could argue that Dannon had every reason to proactively communicate its CSR initiatives; the real question was more focused around on how it should be done. The challenge then was more about making sure the company took the right steps to build its communication around a foundation of the mission of Dannon. The company needed to look as the potential risks and cost effects of an active CSR communication policy, then determine a strategy for measuring the success of its efforts. It appears Neuwirth implemented a process for communicating Dannon’s CSR initiatives, much the same way a solid CSR initiative should operate, by getting stake holders involved. He started by considering the impact of a communication strategy on the company, and began openly communicating ideas and looking for feedback from other company leaders.
A good portion of the case study revolves around the conversations Neuwirth had with five “Key Dannon leaders”, although undoubtedly more conversations were conducted before he made his final decision. The key leaders Neuwirth communicated with were: Alessandro Arosio, Senior Director of Marketing; Jon Pollock, Brand Manager; Marc Jove, Senior Vice President of Marketing; Claudia Sargent, Director of Media; Tony Cicio, Vice President of Human Resources; and Gayle Binney, Manager of Corporate Responsibility and The Dannon Institute (Marquis et al., 2011). Stakeholders will generally detect duplicity in CSR motives; intrinsic or genuine motives as well as extrinsic profit-related motives; however, stakeholders will be tolerant of clear extrinsic motives, if the CSR initiatives are rooted in intrinsic values. This leads to the perceived “win-win” scenario, and is one of the driving factors behind company CSR initiatives, as they realize the value of helping society while still being able to focus on the impact to the bottom line (Tonello, 2011). In addition, if campaigns are not communicated specifically around the brands it produces, then a “halo effect” for the entire industry could be the end result, of a poorly executed communication strategy (Marquis et al., 2011) Therefore, it is important for Dannon to construct a carefully balanced communication strategy, which considers the perception of its stakeholders in the marketplace, while also ensuring to highlight the specific impact of its CSR initiatives within the communities it operates. Impact of a Corporate Parent
First and foremost, Dannon is responsible for reporting to Danone, and is ultimately accountable for its actions to the parent company. This is inevitably going to impact the decision making process, for the leadership of Dannon, when considering the communication of its CSR initiatives. Although Dannon leaders are entrusted with the local management of the company, they still must consider how their decisions will be perceived by the leadership at Danone. Dannon leaders will certainly consider their business model, mission statement, and resources before making any decision; however, the process for making a decision, evaluated by superior management, will arguably always be a different, than if the decision where made at the highest level. In addition, Danone has traditionally worked to train and communicate company values to the leaders of the organization. Danone uses the acronym HOPE: humanism, openness, proximity, and enthusiasm; to instill the values of the company in the leadership of the organization. This process of training and instilling the core values of Danone into the senior leadership of Danone is referred to as the “Danone Way” (Marquis et al., 2011) Since 2001, the Danone Way is used as a method of evaluating subsidiaries’ social and environmental responsibility performance, by evaluating performance levels for 16 key practices in five separate categories (“Danone 2012,” 2012). By generating a way of thinking and culture structure for managers, Danone is essentially creating an accountability framework for its leaders, and in doing so sets an expectation for how performance will be delivered and evaluated. Having a parent company gives Dannon several advantages; that is as long as Danone gives Dannon leadership the freedom to make regional decisions that specifically impact the American marketplace. The advantage to Dannon is having a global brand that gives its strategies substantial economic stability. While many companies would be considering the livelihood of their business in relationship to their CSR initiatives, Dannon is able to exercise its communication strategy, more as an opportunity for potential growth, than an essential part of survival in US marketplace. This could be contributed, in part if not entirely, to its ownership by a large multi-national corporation with substantial and stable economic positions. The benefits of having Danone as a parent company are arguably much greater than any risks it presents, other than the accountability Danone presents to the leadership of Dannon. The Communication Strategy
A solid strategy for Dannon needs to stay focused in the segment of healthy foods, as this is the core of their mission, and the impact of healthy foods on improving society. Since one of the core mission principals of Dannon is to increase consumption, then an effective CSR communication strategy should also support measurable increases to consumption. The key is to foster collaboration between the CSR program and the overall mission of the company, to drive win-win outcomes with its efforts. Tonello (2011) lays out quite a useful framework for an effective CSR communication strategy, which should prove useful in developing a strategy for Dannon, outlined below: CSR Fit
When selecting CSR programs to get involved with it is first important to evaluate how well the program can be associated with the products a company produces. This will prove to be a value, not only to the sustainability of the program; but also, with the perceived intrinsic motives by stakeholders. In 2010, Dannon decided to get involved in the fight against cancer by supporting the National Breast Cancer Foundation, with an annual Give Hope with Every Cup campaign (Marquis & Thomason, 2011). Even though there could appear to be little connection between the fight against cancer and dairy products, there is a good CSR strategy fit, since the cause is fundamentally
based related to nutrition and health. But also, and possibly more impactful, is because Dannon selected a high issue support campaign that aligned with its mission to increase consumption. By mirroring the competition, Dannon is able to fend off market share loss each October, the time when its competitor, Yoplait, runs its Save Lids to Save Lives campaign in partnership with the Susan G. Komen for the Cure foundation (Marquis & Thomason, 2011). Dannon did an excellent job selecting a CSR initiative that aligned well with the perception of its product, mission statement, and marketplace challenges. CSR Impact
It is important for a company to stay focused on CSR commitment or the impact of CSR, to keep the communication based in facts, as to avoid the appearance of showboating its contributions. Also, if communicated correctly the motives of the company can be seen in the durability of the commitments it makes. By getting involved in long term projects for change Dannon shows a real commitment to society and its stakeholders, as opposed to short term involvements, which could be perceived as PR exploits for profits alone (Tonello, 2011). During the first year of the Give Hope with Every Cup campaign, Dannon reports over 12 million codes were uploaded online and over $1.6 million was raised to support cancer research. In addition, the campaign generated over “150 million earned media impression and 147 stories and placements”, and media coverage of the campaign was found in numerous national media sources (Marquis & Thomason, 2011). Where to Communicate: Message Channels
Dannon should continue to report its annual CSR activities on its website and in the marketplace. Utilizing multiple platforms will help the impact of Dannon’s CSR communication, as multiple channels give the company multiple opportunities to reach various stakeholders, and multiple channels will reinforce the value of CSR initiatives for stakeholders. Various channels would include, but not limited to, the company website (Dannon.com), an annual stand-alone report, including CSR issues in the annual shareholder reports, public reporting of political donations and policies, regional human rights policy reporting, and other sources of official reports
(Tonello, 2011). By reiterating the CSR initiatives the company is involved in, and repeating the message within all its official communication, Dannon drives home the value of its program and its commitment to the success of those programs. In addition, it is fundamental for Dannon to incorporate CSR into every form of communication it puts out into the marketplace. If the company intends to operate within the framework of a truly socially responsible company, then its communication should reflect those values woven into the core of how they operate. Advertising and Packaging
Dannon should continue to review its advertising campaigns to ensure that elements of its CSR program are built into every message it delivers to consumers. Dannon has done a commendable job by partnering with Jamie Lee Curtis for its Activia campaigns. Curtis, 51, is not only a highly recognizable celebrity in the US market, but she also has her own story about the fears and personal contact with breast cancer (Garton, 2010). Consumers can intuitively associate Curtis as a reasonable spokesperson for the Activia brand, as well as a spokesperson for breast cancer awareness. This aligns well with the mission of Dannon, “to bring health through food to as many people as possible”, by finding synergy between a marketing campaign to increase consumption, while also building marketing platform to increase CSR awareness to its consumer base (“2011 Sustainable,” 2011). In addition, the breast cancer awareness campaign is relatively easy to recognize by the color pink and primarily the pink ribbon, which is the international symbol of breast cancer awareness (History, n.d.). Utilizing the color pink and placing the pink ribbon symbol on the packaging of Dannon products, is an effective way to associate its products with a high visibility CSR initiative in the marketplace. Dannon should continue to evaluate its packaging schemes to ensure the synergy between its CSR initiatives and mission are represented and communicated through labeling. External Communicators of CSR and Stakeholder word-of-mouth
When considering the communication of its CSR initiatives, it is important for Dannon to evaluate the various channels of external communication sources. Dannon leaders need to be aware of how their CSR initiatives are being communicated by media, consumers, NGOs, governments, and other
stakeholders. There will likely be a tradeoff between the credibility of communication channels controlled by Dannon, compared to communication channels the company has no control over. Consumers would understandably be more skeptical of communication about the benefits of company CSR programs, if the communication is coming directly from the Dannon (Tonello, 2011). Therefore, Dannon leaders need to work diligently to gain the support of external communication channels to help promote positively on their efforts. Finally, Dannon needs to consider the word-of-mouth exposure its CSR initiatives receive from its stakeholders. With an effective CSR communication strategy, Dannon can effectively gain support from employees and consumers. Leveraging the social ties of these focus groups, Dannon can spread the effectiveness of its CSR programs across multiple channels, as these groups typically have a wide reach to other stakeholders (Tonello, 2011). Not only does the impact of word-of-mouth spread quickly through various forms of social media, it is often perceived as more genuine and believable. In addition, this is a powerful marketing resource, costing Dannon very little, in terms of financial resources, but could reap the greatest level of returns on its efforts.
The Dannon case study provides an excellent analysis of the next steps a company should take after establishing a solid CSR program. If a company can build a culture around CSR and implement it effectively, then the company will most likely operate more responsibly. However, once the initiatives are in place and are actively being executed, a company needs to consider how and when to communicate its efforts to stakeholders. It is one thing to do the right things for the right reasons, but in the business world it is always important to ensure your actions are supporting the mission of the company. If resources are being utilized to ensure the long term sustainability of the organization, then the allocation of those resources need to be transparent to stakeholder, just like any other financial or human resources would. The concept of reporting CSR initiatives is relatively new and is undoubtedly part of consumer demand for companies to be more transparent. As consumers lose faith in the actions and intentions of corporations, it becomes more and more essential for
company leaders to open up avenues of communication. This is important, not only to let stakeholders know what the company is doing to make positive changes; but also, to seek genuine feedback from stakeholders to ensure the efforts of the company are in line with market demands. It would seem the days of “fat cats” making decisions for the good of the company, behind closed doors, is becoming an unsustainable business model. Much like people develop slowly overtime, companies are also slowly developing more socially sustainable programs and finding ways to communicate their efforts effectively.
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Tonello, M. (2011, April 26). What Board Members Should Know About Communicating Corporate Social Responsibility. The Harvard Law School Forum on Corporate Governance and Financial Regulation. Retrieved November 12, 2013, from http://blogs.law.harvard.edu/corpgov/2011/04/26/what-board-members-should-know-about-communicating-corporate-social-responsibility/