BCTGM - Campaign to Organize Dannon - Victory in Minster, Ohio

UPDATE 10/7/08: Dannon Workers Ratify First Contract Click here for more!

Dannon Workers

December 7, 2007

Dannon Workers in Minster, Ohio Vote for Union Representation with the BCTGM

Minster, Ohio -- More than 300 workers at the Dannon yogurt plant here have become members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) following a National Labor Relations Board (NLRB) election that concluded yesterday.

An overwhelming majority of workers voted on December 5 and 6 to become members of the BCTGM.

"These workers are to be commended for standing strong in their efforts to become unionized," notes BCTGM International President Frank Hurt. "While this organizing victory was the culmination of efforts on many different fronts, it all came down to the strength of the workers," Hurt adds.

The Dannon workers first reached out to the BCTGM through the union's online organizing contact form in early January. A group of workers met with BCTGM International Representative John Price in late January to discuss their desire to become unionized.

"The workers primary issues concerned health and safety, retirement and job consistency and stability" recalls Price. "But what it always comes down to is the dignity, justice and respect of workers."

The Dannon Company Inc. is a subsidiary of France-based Groupe Danone, one of the world's largest food and beverage companies. Groupe Danone is the world's leading producer of fresh dairy products, the second largest producer of biscuits and cereal products and a leading producer of bottled water. In the United States, Dannon has yogurt manufacturing facilities in Minster, West Jordan, Utah, Fort Worth, Texas, and Londonderry, New Hampshire.

According to Price, the BCTGM's affiliation with the global International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers Associations (IUF), played a large part in the organizing effort. The majority of Danone's worldwide operations are unionized and the IUF has a formal relationship with Groupe Danone dating back to 1986.

The IUF reached out to unions in Europe and Asia that represent Danone workers to inform them of the organizing efforts in Ohio. Upon learning of the Dannon workers' desire to join a union, Danone unions from around the world began sending letters of solidarity to the Minster workers. Letters were received from Belgium, Russia, Germany and other countries.

"Within this global economy, this was an overwhelming show of global solidarity," concludes Hurt.

In the News...

November 1, 2007

Dannon workers take a stand!

More than 80 Dannon workers from first and second shift put on BCT Power shirts and marched into plant managements’ offices demanding Dannon fulfill its commitments and recognize their union. They held signs saying "We deserve dignity and Respect and UNION NOW!

One Dannon worker, who was awarded a Purple Heart in Iraq, served as the group’s spokesperson. He read a statement demanding Dannon recognize that a majority of workers had authorized BCTGM to represent them. The group urged plant management to sign a document recognizing the union, chanting "Sign...Sign...Sign!"

Second shift workers and 12-hour shift workers who were on the job showed their solidarity by wearing BCT Power shirts in the plant.

Still, Dannon local management refused to sign the recognition agreement. In doing so, they continued to violate an agreement between parent company Danone and the IUF, the Swiss-based global union federation that the BCTGM is affiliated with.

Local management admitted that Danone management in Paris is not against recognition, but has left the issue up to the American management, which refuses to abide by the agreement with IUF.

The Dannon workers’ solidarity action was supported by several IUF affiliated Unions which represent Danone workers around the world. The unions sent letters to Danone's headquarters demanding the union be recognized.

Groupe Danone Rolls Out Dannon Yogurt to Subway Shops
French dairy giant labels U.S. a 'frontier country' for its growth potential

(MarketWatch, 9/4/07)

Groupe Danone, the world's largest maker of dairy products, has started selling its Dannon yogurt in Subway's more than 20,000 U.S. sandwich shops as it seeks to expand sales in restaurants and catapult the country into its top yogurt market over the next three to five years.

The introduction, which features Dannon yogurt as part of Subway's Fresh Fit low-fat sandwich menu, marks Dannon's first "massive" nationwide expansion into U.S. restaurants, said Juan Carlos Dalto, chief executive of Dannon Co., the White Plains, N.Y.-based U.S. subsidiary of French dairy giant Group Danone. Closely-held Subway is the largest fast food chain by the number of stores.

Dannon has introduced probiotic yogurt such as Activia, boosted marketing, and worked with retailers in an effort to make the U.S. -- its No. 3 yogurt market after France and Spain -- into its top market by sales.

The strong potential for yogurt sales in the U.S., where consumption trails far behind other developed European markets, has led Groupe Danone to label the U.S., the world's largest consumer of packaged foods, as one of its so-called "frontier countries," alongside Russia and China.

"We see the U.S. as a tremendous opportunity," Dalto said in an interview with MarketWatch. Selling to restaurants "has always been an obsession for us, but it hasn't always been easy for us to build a sustainable and profitable business. This is the first time we find a clear win-win situation. This would give us massive reach."

Dalto said Dannon is also talking with other unidentified restaurants for possible partnership opportunities. He declined to disclose the terms with Subway but said the relationship is profitable.

U.S. sales of Dannon yogurt have been growing at a "double-digit" pace since 2006, when it rolled out the Activia yogurt, to more than $1 billion, or about 10% of Groupe Danone's total sales, company spokesman Michael Neuwirth said. They had been rising in the "high single digits" prior to that, he said.

Untapped U.S. potential
The U.S. consumes about 11 pounds of yogurt per person each year, whereas in mature markets like France, consumption is six or seven times more, Dannon said.

Subway, which has 26 million people going to its restaurants each week, picked Dannon over a number of other yogurt companies who had also expressed an interest in partnering with the company, said Tony Pace, who heads advertising and marketing for the closely held fast food chain. As of Aug. 23, Subway had 21,000 U.S. locations.

Subway may also consider offering Dannon yogurt to its 6,000 locations in 83 countries outside of the U.S., Pace said.
"The Subway deal will help Dannon's profile in the U.S.," said Virginia Lee, an analyst at research firm Euromonitor International. "This should definitely aid consumer recognition and improve sales at grocery stores. It would definitely increase market share."

Dannon had about 23% share of the U.S. market as of 2005, trailing behind General Mills Inc.'s Yoplait, which had 28%, according to Euromonitor. Yoplait has had the leading market share as it added flavors such as chocolate mousse to its Yoplait Whips line, Lee said. It has also attracted a loyal female following through its sponsorship of breast cancer research through the "Save Lids to Save Lives" program, she said.

U.S. consumption of yogurt has increased an average of 9.6% in each of the past five years to $4.96 billion in 2006, led by growth in drinkable and probiotic yogurt, according to Euromonitor. Yogurt companies have introduced flavors such as chocolate and lemon-lime, improving tastes and adding more convenient options as U.S. consumers became more health conscious, she said.

Danone, India's Wadia Meet on Ending Venture

(9/4/07 Reuters)

NEW DELHI - Top executives from India's Wadia Group and France's Danone have met in London to work out an end to their Indian joint venture, but no agreement has been reached, the Economic Times reported on Tuesday.

"Nusli and Franck met. Very friendly discussion. Talks are progressing," Wadia Group said in a statement issued late on Monday, referring to Wadia Group Chairman Nusli Wadia and Danone Chairman Franck Riboud.

A spokeswoman declined to elaborate further on Tuesday.
Wadia Group and Danone hold equal stakes in India's top biscuit maker, Britannia Industries Ltd, through their joint ownership of Associated Biscuits International.

Monday's meeting was expected to unveil a separation plan for the Associated Biscuits venture, the Economic Times said in an unsourced report. But talks were inconclusive and had been extended for another day at least and possibly a few more, it said.

The paper last week said the diversified Wadia Group was set to buy Danone's stake in the venture at a discount of as much as 20 percent to the market price.

The Wadia Group has had a rocky relationship with Danone, having taken the French firm to court over its strategic stake in an Indian biotech firm, which Wadia said violated a non-compete clause in their joint-venture agreement.

Danone, reported to have locked horns with Wadia over the licensing of international rights to the best-selling Britannia Tiger biscuit brand, is keen to tap the growing demand for packaged foods in India.

Danone recently sold its biscuit and cereal snack unit to Kraft Foods Inc, excluding its stakes in its Indian and Latin American businesses.

Kraft Offers $7.2 Billion for Groupe Danone's Biscuit Business

(New York Times 7/4/07)

Kraft Foods, the maker of Oreo cookies and Ritz crackers, said today that it had offered $7.2 billion in cash for the biscuit business of Groupe Danone, the French food and beverage giant.

The sale would give Kraft a new asset in the snack food business, its fastest growing segment, and allow it to extend its global reach.

For Danone, which said that the offer was a strong strategic and industrial opportunity, the sale would allow it to spend more money on its long-term growth strategy. Franck Riboud, the chief executive of Danone, said at a news conference in Paris that he wanted to accelerate the development in products like dairy and water.

The business that Kraft is trying to buy includes operations in 20 countries that employ about 15,000 people in 36 manufacturing facilities. It does not, however, include Danone's biscuite brands in India or Latin America.

Kraft's footprint in Europe and Asia would grow considerably as a result. The purchase would double Kraft's business in China and allow it to enter the market in Russia, where Danone is a big player.

Kraft said the headquarters in Paris where the operations are now run would remain open for the foreseeable future. It also vowed not to close any factories for at least three years after the sale is completed and keep the current general manager of biscuits, Georges Casala, in place. Both are factors that Danone said were decisive in convincing it to seriously consider the offer.

The deal is subject to regulatory approval, and Kraft said it expects the transaction to close by the end of the year.
It would be the biggest move by Kraft's chief executive, Irene Rosenfeld, who was brought in last year from PepsiCo to turn the company around.

Kraft has been under pressure from the investor Nelson Peltz, who owns 3 percent of the company, to sell the Post cereal business and Maxwell House in an effort to raise its stock price. He has also recommended a stock buyback program.