Danone dares to dream of regenerative dairy

Danone has been crafting pledge after pledge on sustainability, urging its rival big food conglomerates to follow suit. Recently recognized for its work reducing deforestation, the French multinational last year launched a coalition to look into the widespread adoption of regenerative agriculture practices in the dairy sector.

With net global sales standing at $14.3 billion in H1 2020, executives at Danone are often proud to point out that over 30% of the company’s global sales are now covered by B Corp certification, a marker of sustainability credentials – and one that the company not wants its peers to adopt while it tries to reach 100% certification itself.

To get there, Danone has been pursuing a goal of carbon neutrality by 2050, and closer to the present, has outlined some lofty ‘2030 Goals‘ that dip daringly into rebellious rhetoric.

“A food revolution is happening,” the company declares in a statement outlining these goals, “and we choose to serve it.”

One way to check in on the viability of these sorts of promises is to shadow the work of one of the company’s top revolutionaries – Cees Jan Hollander, who is Danone’s global farming expertise manager. His task is to help drag these high-flown pledges into reality through dozens of innovative projects with farmers, startups, and other stakeholders.

Hollander offered AFN a teaser of how he plans to barnstorm a panel at next week’s Animal AgTech Innovation Summit on September 14.

The panel — held virtually, of course — will be chaired by Anterra Capital’s co-founder Maarten Goossens, and is titled ‘New Priorities for Innovation in Animal Agriculture, and Emerging Opportunities for Collaboration.’ Sitting at a safe social distance from Hollander, and braced for debate, will be University of California, Davis scientist Frank Mitloehner; Sebastien Pascual from Singapore sovereign fund Temasek; and Jeroen van de Ven, chief operating officer at Merck subsidiary Antelliq.

On one matter, Hollander is sure there won’t be any difference of opinion between the panelists: “We all agree that agriculture needs to change,” he said, before expressing concern at how the majority of consumers have “lost that sense of where their food is coming from.”

Tackling traceability

Even Danone, he admitted, could not tell you which cow produced which bottle of milk. There are technologies that offer that, he noted; but Danone’s traceability is “at the farm level,” where the company regularly assesses animal welfare and nutrition standards. That’s already quite a high bar, he claimed, as Danone does not buy milk off the market as other companies do, where origins can be more opaque. “We really want to work with our farmers who supply us milk,” he said, noting interest in some emerging technologies that could ultimately enable that bottle-back-to-cow traceability.

He highlighted Connecterra, a Dutch AI startup using data and analytics to help dairy farmers become more efficient and agile. It’s already working with Danone in this regard. [Disclosure: Connecterra has received investment from AgFunder, which is AFN‘s parent company.]

Innovative feed supplements

Hollander, whose own grandfather was a cow farmer, also expressed interest in technologies promoting emissions reduction among cattle. Burger King came forward with a ‘low methane Whopper‘ sandwich earlier this year, claiming it could slash a single beef cow’s emissions by more than a third by adding 100 grams of lemongrass leaves to its daily feed. Australia’s Commonwealth Scientific & Industrial Research Organization last month launched FutureFeed — a venture with funding from retail group Woolworths and commodities handler GrainCorp, among others — to commercialize its research into cattle feed containing methane-inhibiting seaweed.

Danone and Connecterra are digging into dairy sustainability. Find out more here

Hollander himself would not be drawn into endorsing the viability of lemongrass or algae supplements, but said Danone was “keeping a very close eye” and running “its own pilots” through its farm portfolio to see which feed additives might be effective and healthy for cattle. He also took stock of ongoing work with a company he declined to name, but which was offering innovative feed supplements that reduce the need for vaccines or antibiotics through promoting better microbiome health.

Sourcing plant-based proteins

In light of Covid-19 and a rising interest in alt-protein products in the first half of the year, Danone is facing a strategic dilemma of how to source and scale its own offerings. A plant-based version of Actimel, its probiotic yoghurt drink, is being rolled out in supermarkets. Other paths to the growing vegan and ‘flexitarian’ markets are coming through acquisition. Danone Manifesto Ventures, the company’s early-stage VC arm, recently invested $10 million into Laird Superfood, a plant-based startup founded by former pro-surfer Laird Hamilton, who is now mooting an IPO.

That’s not to say these products get a free sustainability pass because they aren’t derived from animals; soy, oats, peas, coconuts, almonds, and other plant-based protein sources will all have to be held to high regenerative ag standards as well, according to Hollander. “We want to exclude 100% any soy from deforested areas,” he said, though “at the end of the day, it’s super, super difficult to [achieve that].”

One way is to think about harnessing existing knowledge through its dairy and vegetable supply chain, he said. “We try to involve our farm portfolio that we have on the ground, to incorporate [soy] in their crop rotations. Also oats.”

Reaching for regenerative

Hollander is working on projects in 15 countries where Danone sources its milk and vegetable products. These are designed and operated to encourage farmers toward regenerative agriculture, where they can benefit financially, socially, and ecologically, he explained. “We want to motivate farmers to really work with soil […] To make our soils more fertile, and put carbon back into the soil.”

Burger King, Cargill, and the WWF have teamed up to reseed grasslands in the US Great Plains. Read more here

To do that, he said, he is not implying a return to bygone days of horse and carriages. “It’s repairing what was broken; it’s keeping what was good,” Hollander said of the drive towards regenerative ag, which essentially seeks not only to limit the impact of farming on the environment, but make it net positive.

“Currently, we are at this bridge between the old way of farming and regenerative agriculture,” he said. “If startups can bring something [to the table], then for sure we will use that […] We want to use the energy that startups bring.”