French food giant Danone SA gears up to meet demand from customers interested in nutritional benefits of products

As China continues to open up to the outside world, the French food giant sees more opportunities and is eyeing a bigger presence in the country.

"We are here innovating, creating, making in China for China," said Bertrand Austruy, executive president and secretary-general of Danone.

While the strong words convey the French food giant's determination to develop in the country, the latest fiscal figures speak for themselves.

In Danone's third quarter fiscal report, early life nutrition sales grew more than 10 percent while the figure in China soared by over 20 percent, registering the highest sales revenue ever.

"With the new momentum, we will beef up our presence in China to promote a healthier, more scientific and properly structured diet, as well as eating and drinking habits in China," he said.

The Paris-headquartered company now operates eight plants and employs a staff of around 9,000 in China. Danone first entered China in 1987 and now it is the company's second-largest market globally.

During the second China International Import Expo (CIIE) held in Shanghai last month, Austruy shared his vision for the Chinese market, the country's opening-up and Danone's new plan in the nation.

What's the importance of the Chinese market to Danone's global business?

China presents great strategic significance for Danone's global business development. The Chinese market contributed approximately 9 percent of Danone's global sales in 2018 and has now grown to be the company's second-largest regional market in the world.

In the same period, more than 30 percent of total revenue of Danone's early life nutrition business came from China. China is currently at the forefront of development in many areas including science and digitalization, which has brought Danone huge opportunities.

The Chinese government has introduced a series of initiatives to optimize the business environment, including the Foreign Investment Law. Have you felt the transformation of China's business environment?

Danone has achieved continuous, healthy and robust development in China thanks to the country's ever-improving business environment since the start of the reform and opening-up. China has become the second-largest market for Danone in the three decades since the company entered the country.

The company has benefited from the improvement of China's business environment over the past few years, which has helped to foster a friendlier environment for foreign investors in China.

Commercial regulations are being improved constantly, governance enhanced, and the legal environment is becoming better regulated, more transparent and fairer. The efficiency of government departments, including those involved in commerce and taxation, has improved and standards of service are becoming better and better.

Also, China is developing rapidly, and is at the forefront of development in many areas including science and digital transformation.

The Chinese government is introducing a series of initiatives to support opening-up, which we believe will further optimize the business environment in China and protect the investment rights and interests of foreign enterprises.

Supporting cross-border e-commerce development and replicating successful practices at free trade zones enable Danone to bring its best products to China quickly. The CIIE provided Danone with a unique opportunity to bring its quality products from around the world to Chinese consumers.

Are you optimistic about the Chinese market? What's your latest investment in China? Do you plan to further expand your investment in the near future?

We're convinced by China's huge development potential and market dynamics, and we're confident in developing in China, especially driven by the escalation of consumption upgrade. Chinese consumers now place more value on the health and nutrition benefits of food and beverages, matching our corporate mission and core business.

By continuously upgrading production facilities and supply systems, we ensure the most advanced manufacturing processes and equipment to further satisfy China's ever-growing market needs.

Looking ahead, we will continue to push forward the steady development of Danone's business in China. We will further support China's pursuit of its goals under the Healthy China 2030 strategy with Danone's expertise in the healthy food business.

We believe that China's reform and opening-up will advance to a higher level, and Danone expects to achieve better development in China, thriving on an even better business environment.

Facing an ever-changing market context in China, what kind of new initiatives will Danone introduce to continue driving the business growth in the country?

The size of the Chinese market and opportunities in the country are attractive. We'll continue to bring more advanced and innovative products, contributing to the consumption upgrade in China.

Over the past few years, China's consumption market has maintained a stable yet rapid growth, with a steadily expanding volume and a continuously optimized structure. We are also investing significantly in research in China for China, including establishing partnerships with local institutions in China to develop products catering to Chinese consumers.

The central authorities have again hailed the importance of opening-up during the second CIIE. What's your take on that?

This once again sends strong signals that China will open wider to the outside world. We're also encouraged by China's pledge on five measures to promote higher level opening-up. We firmly believe that it will provide a better business environment for foreign enterprises in the country.

The openness of the trade environment in China, the development of e-commerce and the opening of FTZs have enabled Danone to bring the best products to China quickly. We must say that China is truly a country full of opportunities.

Danone has long attached importance to the Chinese market. We applaud and support the country's efforts to drive a new round of high-level opening-up as well as actively open its market to the world.

We are more convinced and confident to continue our strategy of "Innovating in China for China, Creating in China for China and Making in China for China".

Since last year's CIIE, is there any new development regarding Danone's business in China?

We have continued to bring the most advanced and innovative products from around the world to meet Chinese consumers' ever increasing needs.

Since last year's CIIE, Danone has introduced more than 10 SKUs (stock keeping units) sourced from New Zealand, Poland, France and other countries to the Chinese market.

By continuously upgrading production facilities and supply systems, we ensure the most advanced manufacturing processes and equipment to further satisfy China's ever-growing market needs.

We're currently establishing a new production line in Wuxi, Jiangsu Province, in light of huge growth potential of the medical nutrition industry brought by an increasingly prominent aging trend and the growing number of middle-income earners in China.

Danone will grasp the huge opportunities brought by the CIIE and China's further opening-up to continue bringing more healthy, high-quality products to the Chinese market as well as spread healthy dietary concepts to Chinese consumers.