Near the Danone factory in Parets del Vallès (province of Barcelona) you can visit a museum dedicated to the origins of the French multinational. There are some of the cars that transported the yogurts formulated by Isaac Carasso to the pharmacies of the Catalan capital, when the food was sold as a medicinal product. The exhibition highlights the intense connection with Barcelona, ??where the group was founded in 1919, but just a few meters away there are signs that this bond is no longer as strong. “Danone leaves my mother on the street”; “Danone feeds the unemployed”; “No to closure”…
The fence that surrounds the plant is full of t-shirts where some of its 157 workers have written messages against the closure of the facilities, whose final closure could take a year. The shock is absolute among the squad. “We didn’t expect it, it caught us completely off guard,” says an employee at the factory gates who prefers not to give his name. At his age, he laments, finding a new job in the industrial sector will not be easy.
Only 23 of the 157 workers are over 55 years old and are, therefore, eligible for early retirement. Unions and the company are negotiating solutions, such as possible voluntary transfers to the Aldaia factory, in the Valencian Community, where Danone will carry 90% of Parets’ current production. The rest – the vegetable protein references – will go to Belgium. The first option, however, is the search for a buyer who will maintain the facility and preserve the maximum number of jobs, as happened with the Danone plant in Salas last year, acquired by the Dutch company Royal A-ware and specialized in cheese making.
Parets has produced 130,000 tons of dairy products at its peak and was a pioneer in the manufacture of some of the company’s emblematic categories, such as Danacol or Actimel. The quantities, however, have been falling over time. “Before we also produced for export to the United Kingdom or France,” explains Jordi Barragan, president of the Danone Works Council in Parets, but this segment was moved to other plants in the group.
Added to this is the general volume drop of the French multinational, of 0.8% in the first nine months of fiscal year 2023 (it will present the results for the year as a whole on February 22). Danone sells fewer products due to competition from the private label, which now leads the market share in the yogurt sector, and the change in consumer habits. The loss of volumes is more pronounced in Europe, 4.4% until the third quarter of last year and 1.2% in 2022. On the other hand, the market where it is growing the most is China and northern Asia, thanks above all all to sales of infant formula milk, of which it is the leader there.
No indication made the squad think about this outcome. In recent years Danone had invested 22.7 million euros in the Barcelona plant to promote references in vegetable proteins, and in 2023 alone it spent 6.3 million on various improvements. The collective agreement has also just been signed.
Sources from the multinational explain that this investment was intended to adapt production to demand. “The company opted for the production of plant-based products in this plant and the modernization of the facilities to adapt to this new trend,” they say. However, the investment effort was not enough, the group continues, to balance production capacity with sales. Currently, 45% of the factory’s capacity is unused. “We have been experiencing a decline for years in terms of volume of some of the dairy products manufactured at the Parets plant, and this has made us lose competitiveness,” Danone sources insist. Produits Frais Laitiers Iberia, the group’s dominant company in Spain, earned 10.8 million in 2022 (latest data available in the commercial registry), 36% less than in the previous year. Ten years ago, the company earned 75 million in Spain, although the perimeter of the company was different.
The group insists that its commitment to Catalonia continues with the maintenance of the water bottling plant in Sant Hilari, the packaging selection plant in Montcada and Reixac, and its R&D center and offices in Barcelona.
The unions, on the other hand, regret that since the total separation of the Catalan shareholders from the Spanish subsidiary, the group has been working with France in mind. The process, however, “has to go well.” They consider that the company is risking a high reputational price with the closure of Parets, which has been in operation for 41 years, due to its symbolic value. With its closure, the region where the first Danones in history were born will no longer produce these yogurts.
