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ltinto our genes. Health is part of the •••“In 2004we postedthe strongestorganic growthin our history—7.8%”The DanoneadventureDANONE’s business model is based on organic growth,driven by geographical expansion, innovation and the rapidprogress of brands that stand for health.INTERVIEW WITH FRANCK RIBOUD> FRANCK RIBOUD49, Chairman and CEO since1996. Joined the company in1981 and worked in accounting,marketing and sales beforebecoming Managing Directorof Evian, then head of BusinessDevelopment and Acquisitions,and Vice-Chairman in 1994.08 > BASICSSTRATEGYDANONE 2004> 09 BASICSSTRATEGYidentity of our top brands such asDanone, Evian and LU, and we have alwaysemphasized the connection between food,beverages and health. That is reflected insurveys consistently showing that ourbrand portfolio is recognized as the mosthealth-related in the entire food industry1.Which in a way is hardly surprising, sincehealth has been a constant focus of ourdevelopment for the last ninety years. Ourstrategy aims to maintain that lead with thecontinued development of tasty, appealingproducts winning recognition for provenhealth benefits. Our research and developmentcenter, Danone Vitapole, whichpools the expertise of several hundredscientists and specialists around the world,gives us the resources we need to developnew products with a continued focuson health and nutrition. In that, it is playinga crucial role in building our future.Obesity is regarded as one of today'smain challenges for public health.What is your view of that?F. R. > The trends are definitely worrying.Obesity affects around 300 million peopleand numbers are particularly alarming insome countries. But the problem is complex,and diet is just one aspect. While ourproducts are on the whole nutritionallybalanced, we certainly do not want tosidestep the issue. Yet prevention ofobesity is not the only challenge, as thescientific community and consumers willrecognize. There is also the question of promotingthe healthy growth of children, particularlyin developing countries, as wellas preventing deficiencies and boostingimmunity. Not to mention well-being interms of digestion, water intake and soon. DANONE aims to provide effectiveresponses as far as possible. Not only withour products, but also through researchand the work of Danone Institutes andother initiatives to prompt public awareness.In tackling these complex issues,we place special emphasis on dialog withthe scientific community and consumers,continuing our long tradition of concern forhealth.To return to 2004, what do you thinkwere the least satisfactory developments?F. R. > Well, clearly the impairment of ourassets in home-and-office (HOD) waterdelivery2 in the US and, to a lesser extent,Europe, was a blow. Our performances inthis area remain very strong in emergingmarkets like Mexico and Indonesia. Butthe going has been much tougher in theUS, where the model is very different andthe business is not really the same, exceptthat it also involves sale of water in largecontainers. DS Waters, a company in whichwe have a 49% interest, is facing rapidchanges and we probably failed to properlyanticipate their importance. And that ledto a sizable exceptional charge on 2004accounts to recognize the decline in thevalue of HOD assets over the previous twoyears. We now have to find appropriateways to make up for that, which will probablymean adjusting our business modelin this area.Your Biscuits business line hasreturned