Danone set to triple number of small milk producers in Mexico with $1.3m funding

By Mary Ellen Shoup contact

- Last updated on GMT

Photo: Danone
Photo: Danone

Related tags: Danone, Mexico, Milk production

'Margarita', a social project launched by Danone in 2010 to support and develop Mexico's network of small milk producers, has received US$1.3m in funding from a collaboration agreement with IDB Lab (Laboratorio de Innovación del Banco Interamericano de Desarrollo) with the potential to triple the amount of small dairy producers in the country.

Since 2010, the Danone Margarita initiative has supported small milk producers that did not have adequate technical resources to increase and improve their milk production partially contributing to Mexico's milk deficit. The social initiative project was recognized by the Ecosystem Fund as the best sustainability project of Grupo Danone.

The funding will help Danone triple the estimated number of farmers the company originally predicted it could support when the project was introduced nine years ago. To date, 368 small milk producers in the state of Jalisco, Mexico, have become milk producers with a sustainable business. These farmers  currently supply 18% of the milk (53,268 metric tonnes annually) used by Danone in Mexico.

Mexican food company BIMBO announced that it will soon being buying milk directly from Danone Mexico. Ecosystem Fund, ​a partner to the Danone Margarita, said it will contribute another $920,000 for training, monitoring, evaluation and project management. Agricultural NGO Nuup, has also joined the mission supporting  small farmers in Mexico. 

"The signing of this agreement with the IDB Lab, and the collaboration of other actors such as Nuup and ​BIMBO is a great step for our Margarita project, which will continue to promote the development of small producers and the sustainable production of milk in the country. The joint work will be key to achieve this initiative on a larger scale, tripling the number of producers benefited, which could rise in the coming years to more than 900,​said Mariano Salceda Servín de la Mora, vice president of new business for Danone Mexico. "The success of this project will take us further and further to continue converting small producers into small entrepreneurs."

Improving farm technology

Tomás Bermúdez, IDB Representative in Mexico, commented, "40% of the milk produced in the country comes from family farms with less than 60 cows. Therefore, the support of the IDB Lab will focus particularly on introducing and testing the use of disruptive technology, such as the Internet of Things (loT), which will operate with sensors placed on the cows to monitor their heat and movement, which will contribute to improve productivity and increase the number of producers integrated into the dairy value chain, thus improving the competitiveness of small producers and the dairy sector in general. "

With the additional funding, small dairy farmers in Mexico will gain access to technology that increases productivity, efficiency, and profitability of their milk production. 

According to Danone, the US$1.3m will implement "constant monitoring of the livestock"​ will allow the producer to gain immediate insights into animal health, reproduction, and comfort.  

"Together, this information will contribute to the best decision-making in the field, which in turn has an impact on better productivity indicators,"​ said Danone. 

Additionally, smalll dairy farmers will be equipped with an integrated technology platform that monitors and communicates the entire value supply chain to the farmer from milk deliveries, quality of milk, and financial accounting statements.

Each small farmer member of Danone Margarita will receive funds directly from IDB Lab who will administer the new technological development of the program.

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