Danone 2019

Abstract

In April 2018, an unprecedented boycott campaign is launched against Centrale Danone, Danone's subsidiary in Morocco. Boycotters are speaking with one voice against the increasing cost of living, unemployment and inequalities in the Kingdom. In two months, sales are slashed by half and the company is forced to put an end to more than 900 temporary contracts. The boycott ends up costing 1.7 points of annual growth sales to the Danone group. However, such consumer discontent comes as a shock for Centrale Danone, which had been cultivating an image of socially responsible company. Danone is considered in France and around the globe, as one of the pioneers in corporate social responsibility and shared value. Since the 1970s, Danone is pursuing a dual project, with both economic and social ambitions. Therefore, there is a big misunderstanding within the group on why Centrale Danone has been targeted. As Danone’s board members are pushing for more profitability, the boycott questions the foundations of the dual project. Does Danone have the right approach to creating shared value for all stakeholders and consider well enough the complex socio-economic contexts of countries where it is operating ? How could it avoid future crisis and had it responded well enough ? Was the dual project an dream, especially for a listed company? The case will start by exploring the rich history of Danone and Centrale Danone and will then study their way of doing business with purpose. In a second part, the case will have a closer look at boycott incident and the Moroccan context. It will dive into a major corporate crisis, affecting both image and sales, and analyze its possible explanations. In a third part, the case will assess the consequences on Centrale Danone and its resilience capacity.

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