Danone is concerned not only with the good health of its business but also its customers and to change intent into reality to accomplish a circular economy.
Danone has become a world leader in four businesses: Essential dairy and plant-based products, early life nutrition, medical nutrition, and water. Building on a unique health-focused portfolio has enabled it to become a key player in the food revolution.
Packaging MEA Technology Editor Vikram Fotedar spoke with Samir Moftah, Danone Egypt’s Director of Research and Innovation plus Quality and Food Safety.
Packaging MEA (PMEA): Can you tell me about Danone’s activities in the MEA region, and particularly Africa?
Samir Moftah (SM): We have two businesses. One is early life nutrition, in other words
baby formulas, and the other is everyday dairy products. We manufacture all our dairy products in Egypt starting from the farm. We have the farm where the milk is produced and the milk is later converted into yogurt and UHT milk which is sold in the market. We do export, but most of our business is in Egypt. Our early life nutrition business is imported entirely from Europe.
PMEA: Within the yoghurt segment, what circularity and recyclability measures is Danone undertaking?
SM: We are working very hard on establishing circularity solutions for our yoghurt packs and pots. There are a lot of programmes for converting. These pots are mostly made of PS, which is hard to find for recycling. So we are trying to convert these into other material like PET. We are also investing in understanding potential future solutions that are even more environmentally friendly. In Egypt we follow the same steps as the global team. We are looking at how we can convert all of our packaging so it has a recycled future, because we know PS is hard to recycle.
PMEA: We are talking about you moving away from poly- styrene towards polypropylene or PET. What kind of lid would be used for this package?
SM: Currently the lid is manufactured locally. We are looking at how we can make it more sustainable. It is a metalised lid. It is an important part of the product. Hence we have to be careful when we make those conversions that we don’t impact the product. There is a lot of consumer need to be addressed, such as ensuring it opens properly. We are working through that right now.
PMEA: There have been initiatives towards moving away from aluminum packaging. Is this something Danone is planning to adopt in Egypt?
SM: We are yet to find a solution to [do away with aluminium] and protect the product at the same time. This product has a six-month shelf life. We are trying to find a balance. I am not aware of any success in that area. There are
some propositions where the metal remains the same but the top layer is being changed, which looks interesting. We are evaluating them. I am reaching out to the industry to see if there is an alternate solution. We are also evaluating moving
away from Tetra Block copolymers to other alternatives because it
is important we balance sustain- ability and recyclability. The trick
is how do you get something that the consumer accepts but at the same time provides sustainability.
PMEA: Do you see that coming into the liquid segment?
SM: Yes, I have some flexibles coming into the liquid segment. One of the things we talk about a lot is “on-the-go consumption”. Consumers are looking for products that are easy to handle and consume while they are walking, driving etc. What I also see is that a lot of flexible technology is becoming easier to recycle/manipulate. I am starting to see a real drive in that area.
PMEA: How large is the Egypt market? What is the growth rate from the dairy perspective and generally from food perspective?
SM: I am excited about Egypt. There is a lot of potential. There are 100 million consumers. If you look at the Egyptian consumer from A class to E class, they have different needs and requirements. There are a lot of basic needs like food that is safe, high quality, brands that they trust. That is something that cuts across [all segments], but consumers are looking for different things.
The Egyptian market is growing, which is great, but it is a tricky market. You should be able to cater to different needs and that requires understanding the consumer very well. The dairy market is doing well. It is very competitive in Egypt. Our competitors are doing some really great things in the market. We are excited about the com- petition; it keeps us all on our toes and we are trying to satisfy the 100 million people.
PMEA: Another big advantage that Egypt has is that it is on the cross- roads of the Middle East, Africa and Europe. Is that part of your strategy going forward, to make it a manufacturing hub for the wider region, or will you be primarily be working in the Egypt market?
SM: Export is definitely part of our strategy. The Egyptian government makes it easy to export and at the same time, as you said, Egypt is at the crossroads of several markets.
But we don’t support putting preservatives in our products, so our dairy maintains a very short shelf life. Within these limits of our shelf life, yes, we are trying to export to around the area, but I don’t think we will be exporting to Europe.
PMEA: In other parts of the world, Danone is also doing cheese. Are you?
SM: No, Danone’s cheese business is quite small. We did have a cheese acquisition in Egypt a few years ago but later we decided to exit that market. We have a yoghurt business and a ready-to-eat dessert business. We see added value in those two, from both the product point of view and from the packaging point of view. We are looking for ways for consumers to consume our product on the go. It is not just about products we can bring to the market, but also new ways to consume the product, which is packaging-driven.
PMEA: Can you talk about challenges you are facing from a packaging procurement perspective, and anything you would like to see done differently. Is there any message you would like to pass on to our readers?
SM: We are looking at how we can have our products stand out on the shelf. As I mentioned earlier, it is a competitive market and there are a few competitors who are doing very well. It is a cluttered market. The majority of the trade is through traditional trade. There are small stores where there is not much visibility. We are opening our eyes to the ability to stand out on shelf which could come through printing and forms of packaging. Most of our products are made through FFS machines and so we are looking for something that will work with our machines at the same time.
I have been reading a lot about connectivity. I haven’t seen any converters coming with that kind of new technology in the region. Today, consumers are quite involved. They are looking online for the best deals. I have seen in other regions the converters coming through with these kind of things, but I haven’t seen that much in this region. My call to the industry is please help us with trying to stand out and attract the consumers to our products.
It will also be good for the industry to get together and address the sustainability angle. In Egypt, we have an opportunity to make a difference and I think the industry should get together. There is an opportunity for us to reduce waste and increase the recyclability of all our products.
We focus our campaigns on healthy living, but as we go down the socio-economic class, we see the health issues are really dire. Through the company’s portfolio, we are really trying to drive this health message as much as we can. I think we can make an impact in this area, because the current Egyptian diet can definitely use some more healthy products.
PMEA: I have come here a few times and I cannot help but notice that obesity among the youth is a problem in Egypt.
SM: You are right. I have seen obesity, anemia, lack of exercise, heart conditions, and so on. There are a lot of issues and the government is actively working on screening people and creating awareness. We are trying to play our part as well. We have taken a couple of initiatives in that area to help our consumers to better understand what healthy eating is like and what are the components of healthy eating. Hopefully we can make a difference. You are right, the situation needs immediate attention, and the government is acting on it.