Blog: You, us, everyone

Danone's portfolio is focused on health and nutrition, with strong positions in chilled dairy, water and nutrition. It aims for 3-5% LFL sales growth and a mid-to-high teen recurring operating margin in the medium term, which we believe are credible targets.

Danone's targets, in our view, are slightly more ambitious and coherent than peers', including Nestle. According to the Ellen MacArthur Foundation, Danone achieved improvements in its recyclability percentage by reducing the use of polystyrene (which it will phase out worldwide by 2025), and it highlighted that its recyclability score will sharply increase when it phases out PVC by 2021. The company will shift some non-recyclable packaging to paper in order to achieve its target for 100% reusable, recyclable, or compostable by 2025.

In 2020, Danone Waters increased its global target on recycled content for plastic packaging to more than 50% by 2025, reaching 500/o recycled PET (rPET) use worldwide and 1000/o across Europe in 2025. It has initiated collection and recycling initiatives in each of its top 20 markets (by sales volume) by 2025.

Nestle, by contrast, will increase the amount of recycled plastics in its packaging to 30% by 2025 (vs. 150/o previously) and 50% for PET water bottles.

By 2025, Danone Waters has committed to halving the amount of virgin plastic used by the water brands and implementing all Volvic 's products in Germany, all Evian and Volvic small formats in France, and Evian on-the-go products in the UK to be made from 100% recycled PET. It also launched new large formats (above SL), reducing the usage of plastic per litre by 20-40% (which are made with 100% recycled PET).

It has set up a voluntary packaging organisation in Indonesia with five other FMCGs within the PRAISE industry coalition in order to incentivise and increase collection and recycling of packaging, and also support social inclusion of the informal sector.

More broadly, Danone has increased its focus on consumer education in markets with a high risk of leakage. The company has also been focused on optimising extended producer responsibility (EPR) and deposit return schemes {DRS). The use of bioplastic among fast-moving consumer goods companies is largely related to non-biodegradable plastic bottles. Some companies have invested in biodegradable flexible packaging, such as snack bags, tea bags, and sachets.

Danone's overall approach positions it well among its peer group to leverage both sustainability within its brand and to enhance its impact via its targets and best practices for plastic packaging.