Saturday, November 22, 2003

Oligopoly Brief:  Groupe Danone French-based Groupe Danone is one of the world's major food producers (#7 by some accounts), but one that has decided to specialize in a very few areas where it can be #1 or #2. It is the world's #1 seller of dairy products (yogurts, cheese, desserts) and the world's #1 in biscuits/cookies. It is #2 in the world in bottled water (Nestle is number one). Danone is a good example of a company that has gone away from a scattershot approach to groceries, to a very precise specialization in the three abovementioned categories. That policy was a deliberate search for advantageous oligopoly positions. The company once owned a beer brand (Krounenberg) and a set of other European groceries, all of which it has sold off (discarded). Among the few miscellaneous grocery products it still holds are its condiments division: which includes HP and Lea & Perrins sauces. It also sells some fruit beverages in the Australia and New Zealand. The company also has a significant minority share in BSN Emballage, a glass-bottle-making company. Four brands make up 50% of the company's sales. Those are: Danone dairy products (#1 worldwide) Volvic and Evian water (2 of the top 4 worldwide) LU biscuits (cookies) and crackers (#2 worldwide) In the US, the company has entered into strategic alliances. Coca Cola and Groupe Danone have set up a partnership to distribute and market Groupe Danone's retail bottled spring and source water business in the United States. The two companies' flagship water products, Evian and Dasani (Coke) are not in included. In addition, Danone and Japan-based Suntory have formed a partnership to sell their US bulk delivery waters, sold primarily to offices. The new venture, DS Waters Enterprises, LP, is now the leading HOD (Home-Office Delivery) company in the United States. The company still continued to expand, with recent new ventures in China and Bulgaria. In Russia, it recently backed out of a merger with a major drinks company. Danone has decided on its strengths and is steadily leveraging its position in the specific area that it dominates. Danone Brands Product Type Brands Water Evian, Volvic, Wahaha (China), Aqua (Indonesia), Brio (Argentina), Villa del Sur (Argentina)., Font Vella (Spain), Danone Activ' (UK), Mizone (Australia, NZ), Dannon (US), Naya (US), Ferrarelle (US), Sparklett (US), Pure American (US), Castle Rock (US). H2GO (Australia, NZ) Bonfant, NZ Natural (NZ) Yogurt Danone, Dannon (US), Frusion (US), La Crème, Danimals (US) Biscuits/crackers/cookies LU, Prince, Jacobs, Tiger (India, Malaysia), Cheese Galbani (UK) , Britannia (UK), Vitalinea (Cz) Sauces HP (UK) Amoy (UK, China), Lea & Perrins (USA) Drinkable yogurt Actimel, Bio (Spain), Danimals Drinkable (USA), Danonino (Mexico), Petit Gervais (various) Infant foods Bledina (Fr) Soft drinks Bundaberg Ginger Beer (Australia, NZ), V (Australia, NZ) Cheese Taillefine (Fr.), Gervais Juice Fresh Up (NZ), Just Juice (NZ), McCoy (NZ), Stefan's (NZ), G-Force (Australia, NZ) Desserts Dany 11:18:11 AM

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