Demand for baby food in China drives Danone sales growth

From: FoodBev

Danone has seen its sales increase by 10.8% in its first-quarter results thanks to the “very strong momentum” of its infant formula brands in China.

In the first three months of the year, the French company posted sales of €6.09 billion, up from €5.5 billion last year.

Its early life nutrition unit reported high-teen sales growth, due  to the performance in China which saw over 50% like-for-like sales growth. It benefited from a positive mix as a result of Aptamil Platinum expansion in the ultra-premium segment and progress in building a sustainable direct sales model in China.

The Danone waters business reported sales up 4.2% with growth in Europe boosted by brands such as Fontvella in Spain and Zywiec Zdroj in Poland.

Its international dairy and plant-based business posted 0.8% sales growth. Alpro maintained its high-single-digit growth, increasing in its core markets while proceeding with geographical expansion in France and Spain and product diversification in ice creams, organic beverages and coffee drinks.

Finally, Danone’s North American dairy and plant-based business reported sales down 0.2% with the company’s yogurt brands struggling. However, plant-based foods and beverages were said to deliver “strong sales growth”, driven by the ongoing rebound in nut-based beverages.

Danone CEO Emmanuel Faber

Danone CEO Emmanuel Faber said: “I am very pleased with the strong results we have achieved in the first quarter. With organic growth of almost 5%, this start to the year confirms the strength of our portfolio, reflects our relentless focus on execution and delivery, and our continued investment in brands and innovations.

“We have achieved further progress in developing a more sustainable platform of growth and in the premiumisation of our offering in early life nutrition in China, broad-based growth in waters, and gradual improvement in our essential dairy and plant-based activities.

“With the issuance of the first social bond by a multinational company and the B Corp certification of its subsidiaries in North America, Danone has also reached in the first quarter important milestones in its ambition to lead the way in creating and sharing value for all.

“We are reaffirming our confidence in the agility of our model to navigate a volatile environment to deliver our 2018 guidance and to accelerate towards our 2020 ambition.”

In the first quarter of the year, Danone completed the sale of 14% of its stake in Japanese probiotic drinks company Yakult for €1.3 billion in a move to streamline its operations.

Its investment arm Danone Manifesto Ventures led a $30 million funding round in US coconut water brand Harmless Harvest.

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