America's Emerging Market

As mentioned in this week’s “Danone Expands Its Pantry to Woo the World’s Poor” article, the Danone corporation has recently focused on expanding its focus, from its traditional Western, high-income clients, to new BOP clientele (Passariello). The goal of doing so is to increase its profits through expansion into a relatively untapped market. Specifically, the company has provided, low cost, and often, high-nutrition products to consumers in developing countries such as Bangladesh and Senegal. Focusing on such countries may continue to prove quite profitable for Danone given that they continue to apply the four A’s of social innovation at the bottom of the pyramid: Affordability, Acceptability, Availability, and Awareness, as outlined in the MIT Sloan article (Anderson). In addition, I believe that such strategies can be applied to the development of low cost food products focused on meeting the needs of another type of “emerging” market here within the US. Within recent years, the obesity epidemic within the US has emerged as a new problem. With this problem has emerged a new and relatively untapped market, those that wish to provide healthy food to themselves and their families at a low cost. According to the CDC, nearly 27% of US adults are obese (CDC), with the epidemic most negatively affecting those who suffer from poverty. Trends have shown that “the states that are becoming obese are the states that are low income," (Osterweil). A key reason for this is that healthy foods are often “out of the financial reach of many Americans” thus forcing low income families to “rely on cheaper, high calorie foods to cope with limited money…lead[ing] to over consumption of calories and a less healthful diet” (Osterweil) (Center). Based on this information, I contend that Danone, and similar companies wishing to increase profits by focusing on the developing world, should also consider focusing on the new market of the obese poor within the US and other developed countries. I say “new market” because throughout history, being overweight has been associated with prosperity and being thin, with poverty (Center). Within the US, times have changed to the point where “the lower you go down the socioeconomic status ladder, [the fatter] people tend to be” (Center). To tap in to this market, Danone should consider targeting its products (or their “Americanized” counterparts) currently selling in Senegal, Bangladesh, etc., within the US. Doing so should both help benefit America’s poor obese population and increase Danone’s profits. Fellow classmates, do you agree that this population represents a viable market? Do you feel that doing so would be profitable? If not, what barriers to you foresee blocking profit? Sources: Anderson, Jamie and Markides, Costas. "Strategic Innovation at the Base of the Pyramid." MIT Sloan Management Review (2007): 26. CDC. Vital Signs. 2009. 09 11 2010 . Center, Food Research and Action. Hunger in the US. 07 2006. 09 11 2010 . Osterweil, Neil. MedicineNet.com. 19 03 2004. 09 11 2010 . Passariello, Christina. "Danone Expands its Pantry to Woo the World's Poor." The Wall Street Journal (2010): 4.