The MT Interview: Franck Riboud

A decade at the top of yoghurt firm Danone hasn't dented the boss's modesty. The scooter-driving ex-windsurfer has quietly steered the company to global eminence.

by Matthew Gwyther
Last Updated: 06 Nov 2012

Mmmm, Danone. There - got that one out of the way right at the beginning. It's a slightly winsome little corporate ID sign-off but very effective.

I'm sitting in the entrance foyer of Danone's global HQ on the Boulevard Haussmann in Paris with a non-stop loop of Danone ads - from Turkey, to Brazil and back to Portugal - running on a monitor in front of me. A lot of mmmm. Outside, the sun is shining and the city is looking its gorgeous summery best. The whole Danone corporate set-up oozes healthful, yoghurty vitality, from the probiotic cafe next door serving wheatgrass and carrot juice right down to the huge poster of the company's sporting ambassador Zinedine Zidane, looking out imperiously over the waiting area. (MT was in town just before the midfielder's moment of madness in the World Cup final. But more of ZZ No-top later.)

At about 8.50am, out of the corner of my eye, I notice chairman and CEO Franck Riboud slip in past the front desk, unremarked by everybody. He has just parked his scooter outside. No chauffeur-driven BMW limo for him. Dressed very low-key in tieless shirt and slacks, he makes his way to the lift and upstairs. Ten minutes later and I'm ushered into his presence.

He has a modest corner office covered with family pictures and memorabilia. Nothing big, nothing fancy, not remotely regal.

Riboud is now 50 and has been in charge of this jewel in France's business crown for 10 years. He's slight and greying with specs - and looks in good nick. He is sport-mad and still windsurfs and skis, plays soccer and golf. He has a small child with his second wife, who is a golf pro.

He is known within the group for his fiery temper and his ability to 'crack jokes at morning meetings'. This morning, he seems perfectly affable, despite being stopped on his scooter on his way to the office and fined by the police for driving in a bus lane.

Riboud doesn't like giving interviews and grants very few, even to the French press. French business leaders have never been keen on the confessional or justifying their actions to the world, especially the media. And it just isn't the French style to lionise bosses and put them on a pedestal as the Americans did with Jack Welch. So meeting a British hack is something quite new for him and he isn't entirely at ease.

Maintaining his privacy is another strong reason for keeping out of the business pages. He enjoys his anonymity and being one of the masses. 'I can take a plane or a train and nobody recognises me,' he says. 'I like that. When I went to Highbury to watch Arsenal, I took the Tube.' And he doesn't sit in the directors' box. Being a leader in France, you must always remember the fate of the haughty Louis XVI and Marie Antoinette. You need to know they cannot eat cake.

Riboud's English, although by no means perfect, is infinitely superior to my French and not lacking in animation. He punctuates his speech with many highly expressive sound-effects, from whoopee-cushion raspberries through 'bah-bah-bah', to an odd sort of 'bwaaarfff!' This is helpful because his utterances often go all the way around the houses as he makes his point.

Riboud is a classic Gallic blend of circumlocution and the gnomic turn of phrase.

MT is here because it is a year since 'the Pepsi debacle'. Last summer, Riboud and his company found themselves making headlines for all the wrong reasons and, for a while, Danone became a potent symbol of much that is going wrong with France: bucking the market, retreating into chauvinistic economic protectionism, failing to play by the rules, dissing the Americans.

It was around early summer last year that rumours began circulating about Pepsi's pursuit of Danone. No wonder.

Riboud's is a peach of a company for the 21st century. Whereas Pepsi pumps out sugary drinks that have a shrinking allure, Danone is all glaciers, flowing alpine streams and cows that smile. The company has even claimed that female abdominal 'bloating' can be eased by taking its live yoghurts.

It possesses an array of brands, from Volvic to Actimel, that exude wholesome goodness. When the investment bank JP Morgan did a lengthy study of companies most vulnerable to the backlash against obesity, Danone was the best placed in the world to capitalise on the new mood. The company pushes the 'active health' qualities of its products very hard. 'Danone's DNA is in the pharmacy,' says Riboud.

With Pepsi apparently on its tail, Danone's shares soared by more than 13% in a single day. Riboud kept schtumm: 'Bwaarff! The best thing I thought is to say nothing!' Then in waded the French government, vowing to keep Danone in French hands as it was declared - like defence or the nuclear power industry - a matter of national security. Patrick Ollier, head of the economic affairs committee in the National Assembly, vowed he would enlist the help of French institutional investors to fortify the Danone barricades against the foreign hordes.

Why such a fuss? Such issues have always been ticklish in France but since the rejection of the new European constitution in May 2005, the government has become hypersensitive in its defensive posture. Danone became an object of ridicule worldwide. (It has also devalued its paper as a tool for its own future takeovers because it is now assumed to be bid-proof.)

'The French are in a tizzy,' laughed the Economist, pointing out how far up French noses the victory of the American Lance Armstrong in the Tour de France had got. MT's diarist Howard Davies mocked French prime minister De Villepin, saying: 'His high-profile opposition to a Pepsi threat to the independence of Danone was just the sort of thing to appeal to the French distrust of les Amerloques (a pejorative term for Americans). It's hard to believe that standing up for the inalienable rights of Express Dairies to lose money would have the same effect here.'

Needless to say, Riboud doesn't find it very amusing. The episode did Danone considerable damage and diverted attention from its genuine success.

During Riboud's chairmanship of the group, its market capitalisation has grown from EUR8.5 billion (£5.85 billion) to EUR22 billion.

Seventy-one per cent of its stock is owned by institutions, of which only 29% are now based in France: 15% are American and 9% from the UK.

Danone has 90,000 employees worldwide and it even has a research centre in Shanghai dedicated to getting the Chinese into yoghurt (they lack the vital enzyme to digest cow's milk). So it's an international company with its sights fixed on new markets in the developing world. It uses its 'Frenchness' with great care as a tool because so many aspects of that abstract idea in business are now negative.

Riboud himself is fond of saying: 'The nationality of Danone is Danone.' To which the doubters reply: 'Wasn't it your dad, the last boss, who said: "Danone is like Chartres cathedral, and Chartres Cathedral cannot be bought"?'

As a damage-limitation exercise, Riboud Jnr gave a lengthy interview to the company's website in which he sought to put a few things straight. He is asked: 'You buy businesses outside your home country, France. So why become so indignant at rumours that your company might be a takeover target?'

He replies: 'I am not indignant. I am defending an industrial project. A project that is a success ... Acquisitions and industry consolidation are a normal part of business life and I accept both the risks and opportunities involved. Danone makes a lot of acquisitions in all parts of the world. But they are not hostile ... they concern businesses looking for a new partner or a new shareholder. I simply do not believe in hostile takeovers. You can never build anything worthwhile, lasting and profitable with people you start out by attacking.'

Then Riboud is quizzed: 'Wasn't French mobilisation for Danone a bit over the top?' He replies: 'It was certainly impressive and it drew quite a lot of criticism, particularly in France, where some people naively try to be more free-market than the free marketers. But there are plenty of examples in other countries. Recent cases in the US, Italy and Germany show much the same attitude.

'In any case, in my opinion it is the duty of governments and political representatives in all parts of the world to do what they can to see that the decision-making centres of large businesses stay in their home countries. There is nothing shocking about that. I don't think there was anything out of place in the way the French government and politicians showed concern over the possibility of a hostile bid. But, as always with Danone, there was an emotional as well as a purely rational side to the issue.'

Call me sceptical, but there seems to be an awful lot of having your cake and eating it here. However, it is also true that even the most market-hardened economic liberals on this side of the Channel must have felt a slight sense of unease on hearing that BAA had sold itself off to the Spanish. The truth is that, although we may believe that in the long run the French approach will be to their detriment, in the short term it makes running their businesses easier.

Riboud acknowledges that, despite globalisation and shrinking borders, the French do things differently. How would he typify what is different about the way in which the French do business? 'Maybe a more enthusiastic, sometimes a more passionate way. Above all, I think successful French businesspeople are often driven by a vision, an ideal - what we call our dream at Danone - something that goes beyond economics. We don't think that the bottom line is the only way to assess a business. We see business as an adventure, a way of changing the world. This is one of our assets and also maybe sometimes one of our limits.'

And how about keeping to the rules? Sometimes it irks us in the UK when we see organisations and countries bending them. 'Our relation to rules and processes is specific: we definitely have to play by the rules, but rules are not the goal. Victory is the goal. Rules are here to allow the game.'

This is the sort of utterance that gives not just the UK Independence Party but even the mildest British Eurosceptic a hernia.

But did he really think that his government's intervention - which many argue strongly broke EU principles of a free market - was helpful?

'I don't know. I don't ask myself that question. I didn't ask them to do anything ... What it maybe shows is that I am the most sexy lady in the food business. And I don't mind that.'

The roots of this alluring company go way back to 1919, when Isaac Carasso, a Jewish-Greek migrant from Salonica, opened a small yoghurt shop in Barcelona.

Yoghurt's origins are in the Balkans and the Middle East and go back many hundreds of years. Carasso's son Daniel is still alive today, attending meetings at the age of 100. Daniel came to France as a young man to study bacteriology at the Pasteur Institute and he had got industrialised yoghurt production under way by 1929.

Carasso junior fled to America during the Second World War but returned later and was a pioneer of developing flavoured and textured yoghurts.

In 1967, Danone merged with Gervais, another French dairy product group, and then in 1973 it underwent a further merger with BSN, a glass and bottle maker run by Antoine Riboud, Franck's father. BSN also had the mineral water group Evian and brewing giant Kronenbourg in its stable.

The Ribouds are a remarkable clan. The family is from Lyons and their drive and independence of spirit is said to come from Franck's grandfather Camille, who read his seven children to sleep with a combination of Baudelaire and Homer. Two of Franck's uncles are well known. Marc is a photographer with the famed agency Magnum and has won many prizes for his camera work in China and Africa. (Back in the 1960s, MT was an early champion of his pictures.) Uncle Jean fought in the French Resistance, was taken prisoner by the Germans and spent two years in Buchenwald. He went on to become chairman of the oil services firm Schlumberger.

So Franck had plenty to live up to. He was not a fast starter but that wasn't a problem as it was in his genes to be late out of the blocks - his father, having contracted TB, failed his baccalaureate and this gave him the title of his autobiography, Last in the Class.

Franck didn't shine at school either but was very sporty. He graduated as an engineer but initially lived the life of a vagabond windsurfer.

Then he chose to pursue another passion, his love of skiing, by taking a job with ski manufacturer Rossignol.

When this ambition was thwarted by lack of snow, he joined the junior ranks of Danone. He trained as an accountant and worked his way up through various divisions.

There is a 45-year-old family photo of the Ribouds in which four-year-old Little Franck is screaming in protest.

He's just realised that the chocolate box into which his hand is dipping is empty. He was the youngest, and, according to his Aunt Barbara, 'always the last to get his hand in the pie'.

It wasn't until Antoine was 77 in 1996 that he finally decided to hand the pie over to his son. The story is that it was Michel David-Weill, the head of Lazards banking empire and a Danone director, who suggested to Antoine that Franck should lead the group. The accusations of nepotism were loud and lengthy. 'There isn't anything worse than that,' says Franck. 'I had no legitimacy.'

But Franck is widely held to have done very well and to have confounded his critics. Once he was into the top seat he wasted no time in implementing his strategy, which involved undoing a lot of his father's efforts. He sold off all businesses not related to the new triumvirate of focus: water, dairy produce and biscuits. Out the door in quick succession went Kronenbourg, Panzani, the pasta-maker, and Liebig, the soup company. Danone even off-loaded Britain's beloved Lea & Perrins last year. Franck became the pioneer of focused brand management.

It hasn't all been plain sailing, though. Its annual turnover of almost EUR14 billion is only just ahead of the figure being achieved when Riboud took over in 1996, and Danone is still dwarfed by the big kids like Nestle, Unilever and Kraft. An attempt to get into delivering mineral water to homes and offices in the US in alliance with Coke was a disaster and there is still a long way to go in America generally.

In the meantime, Riboud is proud that in Danone's push into Bangladesh his company will be pioneering the first biodegradable yoghurt pot. 'Little Franck really did it his way,' says Auntie Barbara. 'It was pure chutzpah, energy and competitive instinct.'

Riboud is well rewarded for his efforts, taking home EUR2.5 million last year.

So what does he think about the dodgy relationship between our two nations, which from Agincourt to 'Up Yours Delors' has never been one of neighbourly fraternity? 'I love to go to London,' he says. 'At the same time, your country is incredibly segmented. But some of your UK life is better than the French. The only thing I ask is you realise that France is not so bad. We don't want you Anglo-Saxons to think it's only a good place to live.'

Which of our companies does he admire? 'Cadbury Schweppes, but that's really American now. You are good at telecoms, finance, insurance. I love the way you play soccer (said with no hint of irony). I like Virgin as well. I don't know about their figures (who does?), but I like the guy. (Branson) looks as if he has fun.'

Riboud doesn't believe the Anglo-Saxon model is for his country, though.

'We can't take what you are doing in business in the UK and put it into France.' By this, we presume he means Thatcherism followed by Blairism.

'That will not be acceptable to people. The game is not to destroy the culture of the country but to adapt. Our main mistake is to blame everything on Brussels. That's very French.'

So what, in his opinion, could we learn from how the French live and do business? 'Pragmatism. We are more confident than you, sometimes. You say we're arrogant but we're just confident. We trust ourselves. I will respect the rules but the rules will not drive me. We obey the rules of corporate governance.'

This subject leads to one of the more comical episodes of our encounter.

Riboud is recalling an event he attended in London last year at which the host/compere made a lot of France losing out on the Olympics and then had a lengthy go at French protectionism, laying into Chirac and, it seems, Danone. Riboud is harrumphing at the childish indignity of it all and was clearly very hacked off. I'm fascinated to discover who the villain of the piece was. 'Oh, I don't know his name' - Riboud either genuinely doesn't know or refuses to acknowledge le rosbif by name. He then proceeds to describe the man's singular appearance and makes reference to his bald head with long, unkempt locks hanging around the sides. At the point where Riboud mimes a massive, Falstaff-like stomach the penny drops. It is, indeed, Sir Digby Jones, recently departed head of the CBI. One suspects Digby is now off Franck's Christmas card list.

And talking of obeying the rules, finally back to Zidane, who at the time of our conversation was a short week away from his disgraceful exit.

ZZ is not just paid by Danone to promote the company via children's sport but a big personal friend of Riboud's. 'In the next 10 years, Zidane will become the godfather of our huge children's sport programme worldwide,' says Riboud.

God only knows what the player said to Riboud in his first conversation with his benefactor after the exit for that early Berlin bath. Because every child knows that sticks and stones may break my bones ...


1. Living down the intervention of the French government during last year's 'stalking' by Pepsi

2. Coping as a smaller fish in a shark-filled sea of powerful global food manufacturers

3. Keeping Danone's place on the crest of the health and sustainability wave

4. Deciding when to go. Despite being only 50, he has already had 10 years at the top


1955: Born 7 November in Lyons, France
1976: Degree in engineering from Lausanne's Ecole Polytechnique
c1979: Competes in European windsurfing championships
1981: Joins family firm BSN as an accountant
1990: Made head of Danone's Evian unit
1992: Heads Danone's international development department
1996: Made CEO/chairman of Danone group
Also sits on boards of L'Oreal, Renault, Quiksilver and Paris St-Germain
football club

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