[Audio of Muhammad Yunus]

[GUSTAVO MORENO]

This audio we just heard is from Muhammad Yunus telling how he met the president of Danone and suggested opening a Danone in Bangladesh.

"To do what?" - The president of Danone replied.

"Why, to produce yogurt. You tell me your yogurt is delicious" - Everyone laughs.

"Actually, it's for a special purpose" - Yunus concludes.

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[VIGNETTE]

My name is Gustavo Moreno, but you can call me Gus. In today's Audiocase, I want to share a little bit of the story of Danone's partnership with Grameen, who is a Muhammad Yunus Social Company.

Grameen Danone Foods is a Social Company founded in 2006 in Bangladesh. Its objective, social mission, is to reach malnutrition in the city by providing products such as delicious yogurt, which contains several nutrients that are lacking in the diet of poor children, in order to promote these products at an affordable price for everyone.

This was precisely the special purpose that Muhammad Yunus suggested to Frank Riboud, then president and CEO of Danone (October 12, 2005).

Yunus explained to Frank that in Bangladesh, more than 54% of preschool children (9.5 million young people) are malnourished and 56% of these children are underweight.  

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Right away, Frank looked at Yunus and said: "I'm in! I'm in, let's close this partnership and create a joint venture ."

Yunus calmly looked at him and replied, "Calm down. I'm not done yet ." And, in sequence, he said: "We are going to establish a partnership, we are going to make this a social business" .

Frank asked, "But what is a social business?"

Soon Yunus explained that, in this type of business , you can invest but cannot withdraw dividends, that is, you can recover all your invested money, every penny, but after the time your money has been returned in the same amount in that has been invested, a cycle ends.

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From this moment on, all the profit that this organization will have is no longer from the investor but from the company itself, as a social business is guided by a social problem. In other words, a social business is created and designed to solve a social problem.

Upon understanding this new concept, Frank Riboud had no doubts and immediately wanted to close this partnership with Yunus. At that moment Yunus says that he was in doubt if the director of Danone really understood his explanation or if his accent didn't allow the understanding.

All kidding aside, that's how Grameen Danone Foods was born.

It is very interesting for us to understand that experts indicate that if a malnourished child consumes 2 cups of this yogurt a week, over a year, that child will fully recover.

So Grameen Danone's mission is to fight malnutrition in Bangladesh and since 2005 it has been working on that front.  

This company currently produces Shokti+. But beyond that, the company also generates broader social benefits, for example: on the supply side, it supports local Bangladeshi farmers by purchasing their milk; in the field of distribution, the company provides work and training for the so-called Ladies Grameen, who are the people  that sell these products in rural areas.

Not so long ago, in 2018, Grameen Danone was awarded Seal B (or Company B) certification, basically, this seal is given to a company that aims, as a business model, for social and environmental development. Here in Latin America, we have an adaptation of this certification, called Sistema B.  

In 2019 the company also won the title of "Best for the World" within all companies that are certified in the Community category, recognizing the positive impact for a shared and sustainable prosperity for all.

Currently, Grameen Danone impacts 300,000 children in Bangladesh in addition to having a sustainable business model that generates income for approximately 500 farmers, 200 Ms. Grameen and 117 van pullers, who distribute the products.

In addition to this very successful social enterprise, Muhammad Yunus is involved in other fronts that encourage social business, having already written some books on the subject and having even won a Nobel Peace Prize in 2006 for having coined and established a company. around the concept of microcredit which, in a summary of the opera, is a bank for very poor people. That's why Yunus was also known by the nickname "Banker to the Poor".

I wanted to finish our audiocase for today by telling you the 7 principles of social business according to Yunus.

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1. The business objective is no longer the maximization of profit and becomes the overcoming of a social problem that threatens people and society;

2. Economic and financial sustainability, that is, the business must be able to stand on its own;

3. Investors receive back only the amount invested and no further dividend is given;

4. When the amount invested is returned, the company's profit remains in it for expansion and improvement, continuing to solve this social and environmental problem;

5. Environmental awareness must be related to the entire production chain, from the extraction of raw materials to delivery of the final product;

6. The labor involved must receive remuneration following the best working conditions;

7. Do it all with joy!

So, did you enjoy knowing a little more about Social Business?

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We interviewed Letícia Stables, President of The Justice Movement at  near Peak.  Come read!