This Dairy Company Says Its Business Model Is the Future of Corporate America
Written by Beth Kowitt
The tie up between Danone’s North American dairy business and WhiteWave has created one of the top-15 U.S. food and beverages companies by sales, as well the country’s no. 1 dairy business (excluding cheese).
But the new unit, called DanoneWave, now tops another ranking and one that has nothing to do with food: On April 12, the day the acquisition of WhiteWave was approved, the newly formed enterprise received its status of “public benefit corporation”—the largest company in the U.S. to have that distinction.
“It’s a clear statement to the world—and the people in our company—about what we’re up to and trying to do," says Lorna Davis, CEO of DanoneWave, "which is to bring healthy food to as many people as possible."
A benefit corporation has a certain legal framework that is meant to hold a company to a higher standard than the pure pursuit of profit. Instead, it's mandated to balance the interests of all stakeholders, rather than prioritize shareholders, and is required to create a positive impact on society. (A benefit corporation is different from a “B Corp,” which requires a certification from the non-profit B Lab. DanoneWave is working toward getting its B Corp certification by 2020.)
DanoneWave views its mission as using not only fewer ingredients when possible but also more natural ones, as well as sourcing and labeling non-GMO products to satisfy a growing consumer demand. “It’s clear that consumers are particularly interested in the subject of their food,” Davis told Fortune. “Every single cell in the body is a function of the food we eat and a function of the planet that grew it.”
In addition to offering healthier products, the company is also pushing sustainable ingredients, water conservation, waste reduction, and animal welfare.
Davis says that Danone has been pursuing a deeper purpose for decades, starting in 1972 when the company’s founder said in a speech that “responsibility doesn’t end at the factory gate,” Davis says. “It’s been a fundamental backbone of the company since then.” The company went on to reshape its business toward a healthier portfolio, selling off its biscuit division, for example.
Davis, who joined Kraft as part of the biscuit deal, made her way back to the French dairy company in 2015 as “chief manifesto catalyst.” Her mandate was "to bring the purpose of Danone to life.” After the WhiteWave acquisition, Danone’s CEO asked Davis to run new entity. “As soon as we talked about the business, it was inevitable that it was going to be a public benefit corporation,” she says, noting that both have Danone and WhiteWave had similar missions in their desire to change the way people eat for the better. “I think it’s a perfect marriage in many ways,” she adds.
As part of its benefit corporation status, DanoneWave has established an external advisory committee led by Rose Marcario, the CEO of Patagonia—another benefit corporation. A number other food businesses, including Plum Organics and King Arthur Flour, also hold benefit corporation status.
"In 10 years time, people will say its inconceivable that business was done any other way,” says Davis. “The notion that a company can only care about profit will be seen as old-fashioned and irresponsible.”