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Soup-To-Nuts Podcast: Danone’s innovation strategy focuses on ‘big bets’ of protein, enhanced plant-based & the biome

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/yumehana
Source: Getty/yumehana

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In an era where money is tight for consumers and companies alike, and leeway for new products to fall short of expectations is even tighter, many CPG companies are rethinking their innovation investment strategy to make fewer but bigger bets – a strategy that is paying off for Danone.

The French-based CPG giant known for its yogurts and range of dairy and plant-based beverages, has had a banner year for innovation with several high-profile new product launches, including the recent debut of its cross-brand Remix​ yogurt snack platform and International Delight Cold Foam Creamer. But it also has discontinued several products in the US, including Silk Nextmilk and So Delicious Wondermilk, which it launched in late 2021 – underscoring the increased pressure to ensure every innovation resonates with consumers and pulls its weight within the broader portfolio.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast​, Danone North America Chief Research & Innovation Officer Takoua Debeche shares how the company approaches innovation, where it sees the most potential for new product development and how it critically evaluates the product performance post-launch. At the Future Food Tech Alternative Proteins Summit last month, Debeche also shared how the company approaches collaboration and technological investments to further innovation and new product development.

[Editor’s Note: Never miss an episode of FoodNavigator-USA’s Soup-To-Nuts Podcast – subscribe​ today.]

‘We are really focusing on big bets’

Before the pandemic, many CPG companies were churning out new products – sometimes simple line-extensions other times envelope-pushing concepts that challenged consumers’ understanding and at times appeared to be solutions in search of problems.

The result was a long tail of products that diluted companies’ marketing and merchandising resources and threatened to compromise consumers’ overall perceptions of brands’ more well-established and beloved offerings.

But Debeche said Danone changed its tune two years ago when the company’s then-new CEO unveiled the company’s “renew strategy” aimed at reconnecting with a sustainable profitable growth model.

“Over the past couple of years, [Danone is] focusing on what we call ‘big bets.’ In the past, our approach was maybe too much innovation, to be honest. … We are really spending more time at the front-end of the innovation, and really deep-diving into what the consumer needs, who the consumer really is … what is the market opportunity, how can our brand solve some of those problems for consumers? And so, based on all this market analysis, we are then defining opportunities that we translate into ideas and concepts and try to make them bigger,” she explained.

Protein tops Danone’s innovation list

As illustrated by these product launches, Danone sees significant potential for innovation around protein, enhanced plant-based, low- and no-sugar options, new flavor and texture experiences and the biome.

Of these, Debeche said, protein offers a chance for Danone to expand its appeal to different consumer sets by highlighting the macronutrient’s diverse benefits, including for building and maintaining muscles in older adults and supporting consumers’ weight-loss and management goals.

“The trend on protein is here to stay. And it is not only high protein as in the quantity of protein, but the quality of the protein,” she explained.

She added the potential for protein expands across categories, including for products aimed at older adults who are at risk of losing muscle mass, consumers taking weight loss drugs who are seeking nutrient-dense solutions as well as products that support digestion, and children who need the macro-nutrient to support growing bodies.

Consumers are equally concerned about how much sugar, sodium and saturated fat they are consuming, and Debeche sees potential for Danone to create more products that are lower in so-called ‘nutrients of concern.’

Finally, Debeche said Danone sees room to innovate around products that support gut health – an area of increased concern for consumers as they learn more about the connection between the gut and their broader physical and mental well-being.

“We also are doubling-down on what we call the biome. I think that is really the core of our expertise. We are investing more in science and research on the biome,” and also consumer education so they know how the biome helps not only with digestion but their entire body, she explained.

A three-step approach to evaluating the success of new products

Danone has high expectations for each launch and will adjust marketing as necessary to ensure its success – but the company also is prepared to pull the plug if a product does not resonate with consumers or sell as hoped.

Debeche explained the company measures product success based on three prongs.

The first is how a product performs in the market and whether it meets consumer needs and preferences. Based on early results, Danone may need to adjust marketing. For example, Debeche said, if a product has low trial but high repeat-purchase then the company knows it needs to boost awareness and invest more in marketing.

Second, Danone carefully evaluates whether a product meets consumer preferences and category drivers, which includes taste, texture, packaging, visuals, claims and communication.

“The third step is we make sure that we really valorize” the product and why it is important or different, and that can include activations across media, Debeche said.

Collaborations open doors for new tech innovations

New products are not the only place where Danone is innovating – it also is teaming with startups and established players across industries to advance technologies that can enhance nutrition and sustainable food production.

For example, Debeche noted, Danone recently teamed with other stakeholders to create a cutting-edge Biotech Open Platform to advance the development of precision fermentation on a larger scale.

Looking forward, Debeche said she is optimistic about the future for Danone within the larger food system to create more sustainable, nutritious products that consumers want.

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