110909_laiterie du berger

La Laiterie du Berger,
a Social Business
in Senegal
C
Created in 2005 by Frank Riboud, CEO of Danone, and Muhammad Yunus, father of microcredit
and 2006 Nobel Price for peace, danone.communities is an investment fund that aims at
supporting, financing & promoting social business within Danone mission « Bring health through
nutrition to as many people as possible ».
danone.communities has started with 3 innovative projects : Grameen Danone in Bangladesh,
1001 Fontaines in Cambodia and, in 2008, La Laiterie du Berger in Senegal.
La Laiterie du Berger ambition is to valorize the fresh milk collected locally, notably among Peul
cattle herders, through production and distribution of quality affordable dairy products.
Some key facts about Senegal
T
Total population is 12,5 millions inhabitants
on 196 722 km2 surface
50% of population lives in urban areas
(Main town : Dakar = 2,6 Million inhabitants)
Density in Dakar = 4500 inhab / km2 vs
Tambacounda = 11 inhab / km2
Life expectation is 56 years.
45% of population is aged below 14
Fertility rate is 5 kids / woman
Over 2 $ per day
1 to 2 $ per day
Less than 1 $ per day
Household income per day
Senegal is ranked 144 by UNDP (2010) in
terms of human development (vs
Bangladesh 129)
64% of population in Senegal lives on less
than 2USD per day
Senegal is highly dependant on imports for
food : only 39% of food consumption comes
from local production (EDS, 2007)
A paradoxical milk situation
S
Senegal has a long breeding tradition : 30 %
of the population, representing 4 million
people, live on breeding
Dairy products consumption is deeply
integrated in local food habits : 90 % of
families consume yoghurts on a weekly
basis.
Local fresh milk is barely distributed :
farmers keep it for their own consumption or
sporadically sell it on traditional markets
90% of the traded milk is imported, mainly
reconstituted from powder milk
A local supply business model
L
La Laiterie du Berger mainly buys milk from
cattle herders living 50 km around the plant,
located in Richard Toll in the Peul region.
Organising the milk supply is a big
challenge as cattle farmers are spread in
the bush and daily supply per farmer varies
from 1 litre to 3 litres, very sensitive to
seasonality.
The milk collection is organised, twice a
day, around 3 roads that reach over than
600 herders families .
In 2010, 680.000 litres of fresh milk were
collected, representing a 23% increase in
comparison with 2009.
Besides milk collection, La Laiterie du
Berger is providing hygiene, feeding and
veterinary advices as well as forage and
feed during the dry season to help herders
increasing the level of productivity, and
therefore improving their living conditions.
Herders can sell daily without travelling to
the markets. They get more regular and
higher incomes.
A factory rooted in the Peul region
T
The factory is rooted in Richard Toll, in the
sahelian region, close to the milk collection area.
It started operating december 2006.
It was initially designed to process and pack
liquid fresh milk, yoghurt, cream and fruit juices.
Since the 2009 repositioning, it now focuses on
yoghurts – mainly in the form of pouches - &
cream.
The factory created around 40 jobs.
The factory yearly capacity is 3000T, when
organised in 3 shifts. In 2010, it worked in 2 shifts
and used approximately 50% of the 3 shifts
capacity.
The factory is benefiting from Danone technical
assistance notably on R&D and quality.
Dolima, a dairy range garanteeing quality
of imported brands with local prices
D
Dolima is the unique brand in Senegal
proposing dairy products made of locally
collected fresh milk.
DOLIMA means in Wolof* “ Give me more” .
Consumers buy it because they feel it is good
for them in taste thanks to the ‘true’ natural
milk, and also good for their country thanks to
the use of Senegalese milk.
Most of the children can afford this nutritional
product : the take away product is a pouch
sold at 100 FCFA (ie 15 euro cents).
Yoghurts represent 99% of volumes, with 10
SKUs (from 90g pouch to 4,5 kg bucket) .
Fresh cream is a profitable niche product
representing 1% of volumes.
The range is supported with professional
marketing tools.
*(major local language in Senegal)
A distribution system reaching
small proximity shops
L
La Laiterie du Berger serves all categories
of shops, from modern trade and petrol
stations to small proximity shops in Dakar
and Saint Louis regions.
But the majority of shops are small
proximity shops, usually equipped with a
single fridge or freezer where all categories
of cold chain products are stored together.
In order to be able to deliver products in
urban areas not having roads
infrastructures, La Laiterie du Berger has
developed a pouss pouss delivery service.
In addition, La Laiterie du Berger has also
created some dedicated shops.
Birth of the project
T
Laiterie du Berger
Shareholders
25%
Bathily Family
I&P
75%
Step 0
20042005
Step 1
2006 2007
Step 2
2008 June 2009
Step 3
July 2009
- Dec 2010
Step 4
Jan 11 -
The Laiterie du Berger story started in 2004 with
a family of believers.
Bagore Bathily, graduated in Belgium in
veterinary science. He was inspired by a first
experience in Mauritania with the Peul cattle
farmers and wanted to keep supporting them in
his home country, Senegal.
With passion, he enrolled two key members of
his family : Ibrahima Kane, Engineer from
Polytechnique & Ponts & Chaussées in Paris,
senior manager in Nestle operations both in
Europe and Africa, and Maryam Bathily, MBA
from ESC Lille, manager of her own marketing
events company in Senegal.
In 2005, I&P (Investisseur & Partenaire pour le
Développement), a private finance company,
convinced by the project and the business plan,
decided to invest as a long-term partner, with
25% equity stakes.
The company was established in 2006.
Start of the company
Y
Year 2006 was key in the company’s life.
The core network of cattle herders was
constitued, the milk collection process was
designed and implemented.
The factory was built in Richard Toll.
Set yoghurt
Stirred yoghurts
The first range of products consisted in
liquid pasteurized milk, set and stirred
yoghurts, cream and juices.
Cream
Milk
Juices
2007 full year sales were 268 MioFcfa and
360 tons.
Step 0
20042005
Step 1
2006 –
2007
Step 2
2008 –
June 2009
Step 3
July 2009
- Dec 2010
Step 4
Jan 11 -
Joining of
D
danone.communities decided to be part of
this social business in 2008, and invested in
La Laiterie du Berger, with 25,5 % stake
equity.
In addition, danone.communities started
bringing its know-how through various
missions of technical assistance.
Laiterie du Berger
Shareholders
The factory benefited from several missions
related to industrial & quality control.
Danone also supported the development
and the optimisation of the distribution
system, clustering the potential clients into
different categories.
A marketing approach was initiated to better
understand the local consumers, position
the brand and support sales.
Bathily Family
I&P
25,5%
danone.communities
49%
25,5%
Step 0
20042005
Step 1
2006 –
2007
Step 2
2008 –
June 2009
Step 3
July 2009
- Dec 2010
Step 4
Jan 11 -
140
120
103
98
120
93
71
72
100
72
72
63
115
60
80
119
101
97
47
60
34
38
36
33
40
32
26
31
34
82
31 33 31
47
26
86
98
36
36
32 34
60
99
89
96
T
The products faced strong competition from
products manufactured from imported milk
powder.
82
127
66
80
100
82
75
76
Millions F CFA
Milliers de KG
Launch of Dolima enabled a rapid growth
105
104
40
66
20
20
0
In 2009, the product range was refreshed
and relaunched under the Dolima brand.
The relaunch was an opportunity to improve
the taste, texture, packaging and marketing
support. Since then, sales have grown well :
to 728 tons / 540 Mio Fcfa for full year 2009
& to 1270 tons / 990 Mio Cfa for full year
2010.
0
avr-08
juin-08
août-08
VOLUME YAOURT
oct-08
déc-08
févr-09
VOLUME CF
avr-09
juin-09
VOLUME LAIT
août-09
oct-09
VOLUME JUS
déc-09
VOLUME YT LIQUIDE
Laiterie du Berger
Shareholders
9,9%
févr-10
5,0%
avr-10
juin-10
août-10
VOLUMES AUTRES
oct-10
CA TOTAL
Bathily Family
I&P
danone.communities
Grameen Crédit Agricole
49%
Phitrust
25,2%
25,2%
Step 0
20042005
Step 1
2006 –
2007
Step 2
2008 –
June 2009
Step 3
July 2009
- Dec 2010
Step 4
Jan 11 -
Mid 2010, the range was reduced to focus
on yoghurts and cream. 9 SKUs were
dropped out (milk, juices and liquid
yoghurts)
This growth has been made possible in
particular by the entry of two new
shareholders, the Grameen Crédit Agricole
foundation and the Phitrust foundation,and
the provision of a long-term loan by BIO
(Belgian Investment Overseas).
2011 perspectives
O
The objective in 2011 is to develop sales up
to 150T per month while making a
significant step towards profitability
1400
1200
1000
800
600
Turnover (K CFA)
400
Net result (K CFA)
200
Collected milk (000l)
0
-200
2007
2008
2009
2010
2011
-400
-600
Therefore some key operational challenges
will be addressed throughout the year.
The range will be simplified to lower the
complexity level at all stages (production,
supply chain and sales) and to reinforce the
quality management.
A project run together with Grameen CA ,
GRET & Coopération monégasque has
started in order to develop milk collection
capabilities.
Organisation and processes will be
reviewed to keep developing team
empowerment and excellence in execution.
Step 0
20042005
Step 1
2006 –
2007
Step 2
2008 –
June 2009
Step 3
July 2009
- Dec 2010
Step 4
Jan 11 -
Monthly steering committees are run
together with I&P and danone.communities
to align on strategic decisions and monitor
technical assistance.
Latest 2011 results are very promising
+60%
Thanks to advertizing, distribution
& good company focus
188T
160
188
x3!
160
While downsizing & simplifying range since june 10
& despite quality issues Q1/Q3 2010
Tons
180
xx
Sales in tons
148
140
120
103
93
140
66
71
100
72
63
60
32
26
40
26
86
100
*
88 86
124
115
74
80
115
115
105 110
119
101
47
38
32 34 36
33
93
89
85
127
60
80
95
82
72
72
76
98
82
75
120
101
105
91
104
60
107
36
31 3431 33 31
40
20
20
0
0
juin08
août08
oct08
VOLUME YAOURT
déc08
févr09
VOLUME CF
avr09
juin09
août09
VOLUME LAIT
oct09
déc09
févr10
VOLUME JUS
avr10
juin10
août10
oct10
VOLUME YT LIQUIDE
déc10
févr11
avr11
VOLUMES AUTRES
juin11
août11
CA TOTAL
Millions F CFA
200
LDB’s social impact is already visible
Nb of herders families with
daily access to market
Before LDB
2009-2011
0
600
Status of herders vs
neighbourhood
Av. earnings from milk /
month / family
Before LDB
2009 -2011
0 Fcfa
22000 Fcfa jan 09
(37000Fcfa ie + 70%
jan 2011)
Access to services
Before LDB
Today
Conflicts as
cattle eating in
sugar cane
or rice fields
Structuring win-win
relationship with
Compagnie Sucrière
du Sénégal & rice
farmers
Access to veterinarian
services & insemination
Access to cattle feeding
Before
2010
None of them
All of them for vet
services / 2500
cows inseminated
Sedentarization
Before LDB
Since 2009
Before LDB
Since LDB
Before LDB
Today
No access to
bank services or
limited link with
development
world
Breeders have
access to services
(education, credit
through bridge with
bank = credit ligne
of 35 Moi for the
cooperative
Access to
cattle feeding
but only on
cash paiement
Access to cattle
feeding for all 600
families on credit
and with education
Need to
transhume up to
800km during dry
season
Sedentarization less
precarity, continuous
access to social
services (education,
health) …
Breeders will
benefit from GRET
study about
developing milk
sector
Community
management of fields to
ensure regular feeding
(roufage availability
during dry season)