Danone recorded a 4.4% reduction in its third-quarter net sales due to a poor performance of its infant formula unit in China and a consumer boycott in Morocco.
The world’s largest yogurt maker – which owns brands such as Activia, Evian and Volvic – saw revenues fall in three of its four business units. Total sales for the quarter were €6.19 billion.
Danone CEO Emmanuel Faber
In its international dairy and plant-based business, the company’s largest division, net sales shrank by 8.1%. However, the firm drew attention to the double-digit growth of Alpro and the brand’s expansion into Eastern Europe.
The company’s North American dairy and plant-based unit posted a revenue increase of 1.4% thanks to buoyant demand for nut-based beverages which benefitted its Silk and So Delicious Dairy Free brands.
In July, So Delicious launched a frozen mousse line to continue its expansion in the vegan dessert sector.
Danone’s specialised nutrition unit saw sales fall by 6.2%, partly due to an unfavourable year-on-year comparison in China. Finally, the company’s waters unit recorded a 1.5% reduction in net sales.
Emmanuel Faber, Danone CEO, said: “Our performance in EDP and waters compensated for challenging conditions in China where early life nutrition shows changes in market dynamics following a period of exceptional growth.
“We also have the foundations in place to navigate current emerging market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth. As a result, we have today reaffirmed our guidance for the full year.”
In August, Danone invested $10.6 million in start-up Mitte through its Danone Manifesto Ventures initiative. The German brand has developed a countertop water system that purifies water by distillation and offers cartridges which create drinking water enriched with minerals, creating an at-home alternative to bottled water products.
© FoodBev Media Ltd 2020