WHITE PLAINS, N.Y. — While many dairy farmers view plant-based products as squeezing out traditional cow’s milk and yogurt for merchandising space in dairy departments across the United States, Danone North America believes the two can co-exist in harmony.
As the U.S. market leader in yogurt and the world’s largest Certified B Corp, Danone N.A. is also the top plant-based producer in the United States. The company is investing heavily in growing and making both businesses more sustainable.
Mariano Lozano, chief executive officer of Danone N.A., explained to attendees of the International Dairy Foods Association’s Dairy Forum 2019 in Orlando, Jan. 20-23, that the dairy industry needs to rethink its sustainable agriculture practices because the current approach is not working for farmers, the soil and processors.
“Continually increasing market demands make it harder for farmers to stay profitable,” Mr. Lozano said. “And land is often stripped of nutrients. It’s eroding. It’s losing capacity to retain water, feed crops and support dairy farms. And milk price volatility makes it challenging for producers and processors to run profitable businesses.”
That’s why Danone N.A. is taking a “one size does not fit all” approach in how it thinks about sustainability. Its goal is to be carbon neutral by 2050.
Danone is taking a “one size does not fit all” approach in how it thinks about sustainability.
To accomplish this, the company manages a diverse portfolio of products, dairy and plant-based. On the dairy side, the company engages with family farmer partners with herds ranging from 20 to 4,000 milking cows to improve their sustainability practices. This includes conventional, non-G.M.O. and grass-fed farming.
“By addressing the root causes of volatility, we help farmers focus on farming and generational transfer instead of short-term costs,” Mr. Lozano said. “We form partnerships with our farmers. By focusing on people, we support shared learning for generations of farmers to come.”
The company is investing in the land, too. This is in both dairy farming and planting crops.
“By advancing regenerative agriculture practices, we help to restore the soil so it works harder for us,” Mr. Lozano said. “We take a multi-faceted approach.”
This includes offering many varied plant-based products, such as almond, cashew, coconut, oats, pea and soy. The company educates its family farmers about rotating crops to improve soil and yields.
Danone N.A.’s plant-based business includes established brands such as Silk and So Delicious, as well as Vega, a vegan nutritional bar and shake brand that the former WhiteWave business acquired in 2015. Vega has expanded into the refrigerated dairy case with cashew-based products. Danone also rolled out a new brand — Good Plants — an almond-based probiotic yogurt alternative.
Danone N.A. also now offers plant-based options under its dairy brand portfolio. This includes two new products under the Oikos Greek yogurt brand. Oikos Dairy-Free is made with coconut milk and has a full-flavor, premium proposition. Oikos ProPlant features 10 grams of complete protein obtained through a proprietary mix of soy and nuts. The product will be hitting shelves this summer.
On the dairy farm side, in Danone N.A.’s first year of its soil health program, the company’s efforts have impacted 12 dairies in 5 states with 26,183 acres from 330 fields. That’s more than 24,500 milking cows and nearly 33,000 cows in total.
“By investing in a sustainable approach to agriculture, we reduce uncertainty in our own costs, leading to more innovation,” Mr. Lozano said.
That innovation is taking place in both the dairy and plant-based categories. The company’s new Two Good yogurt is made with a patent-pending slow-straining process. The technology removes most of the sugar from the milk before the yogurt is made. Each cup is slow-strained down to 2 grams of total sugar. The result is a thick, creamy Greek-style yogurt that is rich in protein with 85% less sugar than average yogurts.
Mr. Lozano explained that as much as lower sugar is a priority, on the polar opposite end of the spectrum is indulgence, which is also an opportunity. That’s exemplified in new Oikos Oh! The indulgent double cream yogurt is crafted with premium ingredients and interlaced with decadent amounts of flavorful ingredients.
Wallaby Organic Aussie Crème Yogurt is another indulgent option. The new chef-inspired flavors — caramelized pineapple, spiced peach and strawberry red wine — are the brand’s answer to a more mindful dessert without sacrificing bold flavor. The base is an 8.5%-milkfat yogurt infused with a dulce de leche flavor.
“And in between (lower sugar and indulgence), probiotics are a growing opportunity,” Mr. Lozano said. “As are clean label kids’ products, protein and plant-based.”
On Feb. 8, the company opened a new building at its DuBois, Pa., facility to increase production of plant-based foods to meet growing consumer demand. This multi-million-dollar investment to expand capacity grows the nation’s largest production facility for plant-based yogurt alternatives and adds additional capabilities.
“Many people who enjoy our products look for plant-based options because they are interested in lessening their impact on the environment through diet,” said Chad Stone, plant director at the DuBois facility.
For Danone, it’s all about providing its customers options.
“The industry tends to cluster the different products into segments, but consumers don’t,” Mr. Lozano said. “We believe it’s important to have a strong house of brands to address the specific pockets of growth and offer products in all shapes and sizes.”