Danone sales accelerate in third quarter

by Eric Schroeder
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Dannon Non-GMO Project verified yogurt
Danone has gained market share in U.S. yogurt.
 

PARIS — Danone S.A. posted accelerated sales growth in the third quarter of fiscal 2017, as overall group sales soared 16.6% to 6,454 million ($7,580 million) from 5,537 million in the third quarter of fiscal 2016.

Emmanuel Faber, chief executive officer of the Paris-based company, said the rapid growth reflects “the strength of our portfolio of cohesive consumer health-focused brands and a solid execution against our strategy, with a step-up in innovation and activation plans.”

Emmanuel Faber, Dannon, Danone
Emmanuel Faber, c.e.o. of Danone

“The increase in like-for-like sales has been underpinned by the allocation of additional resources to serve rising demand in Specialized Nutrition, especially in China,” Mr. Faber added. “Strong headwinds remain in Brazil, which continue to impact EDP International negatively. The integration of WhiteWave is on track and starting to deliver results.”

Danone reported sales for its Essential Dairy and Plant-Based (EDP) North America unit of 1,290 million ($1,515 million) in the third quarter, up sharply from 627 million in the same period a year ago.

Cecile Cabanis, Danone
Cecile Cabanis, executive vice-president and c.f.o. of Danone

Elaborating on the unit’s results in an Oct. 17 sales trading statement, Cecile Cabanis, executive vice-president and chief financial officer, said, “In U.S. yogurt, we gained market share despite a category that is slightly declining and highly competitive. This performance has been supported by strong sales growth, especially in emerging yogurt segments, such as plant-based. 

“On coffee creamers, we continued to deliver a persistent robust growth, ahead of the market, including positive category dynamic and continued share gain. This performance is also supported by the ramp-up of successful innovation, like SToK, … which is a young, craft brand of cold-brew iced coffees.

“The plant-based business posted a positive growth, driven by gradual stabilization of the core beverage portfolio and very strong sales growth of VEGA International and So Delicious frozen desserts. Market trends for the core beverage also appear to be improving in Q3.

Vega snack bar and So Delicious Dairy Free frozen dessert, Danone
VEGA International and So Delicious frozen desserts have experienced strong sales growth.
 

“The Premium Dairy business continues to be pressured by the industry’s oversupply of organic milk. We continue to take steps to reduce our organic mix supply through review of the contracts; reallocation of the supply into emerging areas of the portfolio, such as organic yogurt, cheese and creamers. We are also optimizing utilization of milk through innovation, such as an extended-shelf gallon, a vitamin D-enhanced milk and high-protein single-serve. Finally, we continue to work on fixing the short-term issues around fresh food.”

Going forward, Ms. Cabanis said Danone has experienced enough improvement to expect category fundamentals to remain solid.
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