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Danone Turns To Poorer Countries For A Revenue Boost

June 25, 2010: 02:13 AM EST
With sales of its yogurt and other products slowing in North America and Western Europe, Danone has turned its attention to poorer countries for a revenue boost. The company already derives 42 percent of its sales from emerging markets, a significant increase from a decade ago. Determined to reach a billion customers a month by 2013, Danone is targeting “customers who live on dollar-a-day food budgets,” according to The Wall Street Journal. But though the potential markets are huge, they have very little money. "The biggest problem is that prices are too high," says a U.S. professor. "Companies overestimate the size of the market and end up selling to the middle class, not the poor." Other hurdles to overcome: distribution networks are unreliable, costs are hard to control.
CHRISTINA PASSARIELLO, "Danone Expands Its Pantry to Woo the World's Poor ", The Wall Street Journal, June 25, 2010, © Dow Jones & Company, Inc.
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