A complete operation willing to develop, obtain and make the most from the best available resources, enabled to get to know clients, ease their access to products and achieving their satisfaction while benefiting the company, its partners and suppliers
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With more than a century since it first opened for business in Europe, Danone established a solid presence around the world in the dairy products and drinking water industries. The Danone group set foot in Mexico almost half a century ago and has strengthened its leadership through an important product portfolio, fulfilling the mission of bringing health through food and hydration to the most possible people. Also, Danone has established a solid reputation as a reliable household name as a result of the highest quality standards shared by its products, contributing to consumers’ diet and nutrition.
Danone’s operation in Mexico ranks at 7th place worldwide, performing a key role in the company’s global business strategy.
Solid nationwide operations
The brands managed by Danone in Mexico are grouped into three business units:
• Essential Dairy Products (EDP) and plant-based products: Activia, Bene G, Danmix, Danone, Danonino, Danup, Danette, Dany, Oikos, Vitalínea, YoPro and Leche de Origen Danone (milk), all of these are dairy products, besides the Silk brand of coconut, oat, rice and soy beverages.
• Bonafont: One of Mexico’s beloved brands of quality drinking water, available in sizes from 20oz. to 340oz.
• Bonafont en Tu Casa (home delivery service): Bonafont water straight to Mexican households through recyclable and returnable bottles in 45oz. and 83oz. sizes.
Danone supplies nearly 300,000 clients involved in the retail industry, besides convenience store chains and supermarkets.
The company has 45 facilities nationwide. Danone’s almost 1,000 delivery routes serve approximately 50,000 clients every day.
Danone’s plant in Irapuato, Guanajuato is the group’s largest yoghurt plant in Latin America and in recent years has earned important accolades, such as the 2020 Sustainability Prize from the Transportation Innovation Week, for the first electric refrigerated truck prototype. In 2017 and 2019 the company was awarded the National Prize for Logistics. The first of these for using a natural gas-fueled delivery fleet and a strategy optimization in the Greater Mexico City area, and the second time for their control tower app.
During the last five years, Danone’s facilities have been reconditioned to guarantee service and supply for consumers nationwide.
“100% of these facilities were conditioned to support the company’s organic growth and innovation strategy,” said Carlos Caratachea, Supply Chain Director for Danone México.
Proved experience in every department
Caratachea, a biochemical engineer, graduated from ITESM (Monterrey Institute of Technology and Higher Education) - Queretaro Campus. His wide experience in the food and beverage industry has taken Caratachea to leading companies such as Jumex, Jugos del Valle, Comedores Industriales, Coca-Cola FEMSA and Unilever, where he has performed in areas such as production planning, materials, demand, quality control, warehouse management (both for finished products and raw materials), systems and distribution, among others, obtaining knowledge about every link in the supply chain.
Caratachea arrived at Danone in 2005. Before being named Supply Chain Director in mid-2020, he was in charge of nationwide Distribution and Storage for five years, and from 2012 to 2016 he led the production plant at Irapuato to be the best plant during five straight years among 140 Danone plants worldwide.
Besides all the awards obtained in Danone, as well as the Total Productive Maintenance award, from the Japan Institute of Plant Maintenance for Unilever’s Tultitlan plant, in 2020 Caratachea became recipient to the Eminence in Logistics award, on behalf of the Soy Logístico association.
“I never accomplished any result by myself, I always did it with help from focused, disciplined teams, striving for ‘how should we’ ways to achieve results,” the executive declared.
Tech driven
One of the supply chain’s main traits at Danone Mexico is the willingness to explore, learn and include new technologies enabling them to ease tasks, save and improve results, thus leading to increase the value chain.
Danone’s investments in disruptive technologies, such as smartwatches, RFID and warehouse management systems have been useful for inventory management, orders and also for digital research resulting in the detection of new clients. For planning and consumer service tasks, Danone relies on RPA for data extraction and analytics.
“We’ve thrusted the use of technology to simplify tasks and improve our service and savings indexes,” Caratachea explained.
Digital technologies in vehicles and devices have made operations easier, providing delivery workers predetermined routes, designed according to each day, schedule and other conditions in their area, aligned with the control tower, which not only monitors delivery times, but also offers support in client geolocalization. The control tower allows making decisions to plan routes and delivery times according to possible traffic conditions such as temporary road restrictions, roads under construction or repairs and traffic accidents, among other critical events, in real time, protecting operational continuity.
Currently, the Danone fleet is working with new devices that not only share the vehicle’s location, but also its temperature and built-in photosensors detect cargo door openings involved in possible unscheduled stops in the delivery route.
“We are evolving toward an understanding of what the market offers to create solutions which become sustainable,” the executive declared.
Strategic partners and supplier development
Creating synergies and establishing collaboration programs is a key factor for Danone Mexico. The main goal of working hand in hand with large retail chains is finding solutions able to optimize supply while reducing costs. The company has strong relationships with Ferrero Rocher and Mars in logistics and product delivery.
“The most important aspect is the creation of mutually beneficial solutions. There’s a willingness to explore new business opportunities,” Caratachea commented.
On the other hand, there are suppliers evolving into levels of highly specialized collaboration. The company that first supplied a monitoring system for Danone’s trucks is currently in charge of Danone’s control tower. Freight trucks with two decks and dedicated freights are a result of built trust after accomplished goals and the vision of economy of scale and volume sales. In fact, the refrigerated electric truck -which already earned a prize- was a Danone-driven collaboration between a truck manufacturer, a car body maker, the refrigeration system supplier and the financing entity. The company also shares close relationships with startups as a reference about different operation models.
A common trait about these and other suppliers and their relationship with Danone in Mexico is their vision to create high-value, appealing, sustainable and solid strategies.
“Danone stands out for venturing into investments with support and collaboration from local suppliers. They’ve helped us with their flexibility and willingness to take steps along with us, because the solutions we propose bring business opportunities,” the executive explained.
Global support for one of the best markets
Being part of a global corporation like Danone implies aligning and following determined standards, as well as fulfilling its commitments to subjects such as the environment, health and sustainability.
On the other hand, this also means having multiple resources available which help every operation worldwide to share experiences and success stories to improve best practices.
Support from the global headquarters also includes digital resources such as the “Campus X” e-learning platform, which offers training sessions in different topics such as quality, R&D, production, supply chain and sales, among others.
Each country’s operation is subject to reviews, detecting improvement areas and also to exchange resources which are not in use in a certain country.
“The support we have from the group is key to achieve our goals faster,” Caratachea declared.
Changes derived from COVID
Consequences derived from the COVID global pandemic resulted in a flurry of new measures in businesses worldwide, and Danone Mexico was no exception. Danone’s operation was transformed, becoming a safe and healthy space for its staff by conditioning its facilities to comply with sanitary measures and preventive protocols, besides arranging new operation models supported on technology, such as virtual meetings, new digital platforms for communication and other resources alike.
These conditions also resulted in improvements in communication with clients and detecting a rising awareness in consumers about product sizes from the data generated during the quarantine period.
“COVID has led us into a more mature and complete operation, able to fulfill our clients’ and consumers’ expectations,” the executive explained.
Corporate Social Responsibility: contributing to growth
Both in Mexico and on a worldwide level, Danone engages in active efforts to achieve its “OnePlanet. OneHealth” ambition, focused on the wellbeing of individuals and the planet.
In terms of sustainability, there’s been significant progress in efforts aimed at renewable energy, packaging, water, regenerative agriculture and carbon footprint reduction, among other matters, as it actually happens with the company’s vehicle fleet, two cargo decks in trucks and reducing the use of fossil fuels is focused on reducing the carbon footprint and other emissions. Also, the plant in Irapuato runs on wind power.
Danone also runs important projects which have become a transforming force in its social environment, as it has been with the Margarita program, a sustainable strategy favoring milk supply by developing small producers who lacked the proper technical advice to increase and improve their production. Currently, more than 500 Mexican producers from the state of Jalisco have become small entrepreneurs, or the Madre Tierra (Mother Earth) program, a regenerative and sustainable agriculture program offering a significant increase in productivity to small producer communities with strawberry crops in Maravatio, Michoacan.
Evolution and increasing digitization as a process facilitator
Upcoming developments at Danone undoubtedly bring some kind of excitement amidst the evolution that the logistics and chain supply areas are capable of displaying. The pandemic brought along new entrepreneurs that must be serviced and supplied, for whom different distribution models are being developed, according to context and conditions.
The arrival of the refrigerated vehicle becoming part of Danone’s distribution network for smaller clients is servicing a recently discovered
sector which seems to grow. For Danone it is highly important to offer variety in its portfolio with water and other products able to contribute to the transformation of Mexicans’ diet and for consumers aware of the products they use.
Undoubtedly, it is expected that Danone will continue adopting digital resources and directing efforts toward reducing any environmental impact.
“Driving green tech helps a lot, that’ll be here in upcoming years, more digitization producing data that enables us to serve what clients need and demand,” finalized Carlos Caratachea, Supply Chain Director for Danone Mexico.