PARIS — Third-quarter results from Danone S.A. show companies still can find profit in the yogurt category, provided they are in growing yogurt segments. Regular yogurts and Greek yogurts are suffering, but children’s yogurts and indulgent yogurts are growing, said Cécile Cabanis, chief financial officer, in an Oct. 17 earnings call.
“We are clearly in the most dynamic yogurt segments with Activia in probiotics, Danimals in kids’ yogurt and Silk and So Delicious in plant-based yogurt,” she said. “So this overexposure to the fast-growing part of the category is allowing us to consolidate our leadership in yogurt as a whole …”
Silk and So Delicious benefitted from demand for nut-based beverages and expansion in adjacent segments like mousses and ice cream, according to Danone, while coffee creamers also posted strong growth.
The yogurt category helped Danone’s essential dairy and plant-based segment in North America (E.D.P. and Noram) to post strong third-quarter numbers. Sales grew 1.4% to €1,293 million ($1,485 million) from $1,275 million. Like-for-like sales growth was 2.7%, and volume growth was 3.4%.
Paris-based Danone S.A. companywide in the third quarter recorded sales of €6,186 million ($7,105 million), which was down 4.4% from €6,472 million in the previous year’s third quarter. Currency had a negative impact of 5.2%, driven mainly by the appreciation of the euro against the Argentine peso, Turkish lira and Brazilian real. Like-for-like sales growth was 1.4% while sales volume declined 1.9%.
In Waters, third-quarter sales slipped 1.5% to €1,248 million from €1,268 million. Like-for-like sales growth was 6.4%, and volume growth was 2.2%. Expanded distribution of Evian led to growth in Waters in North America.
In the first nine months of the year, Danone S.A. companywide had sales of €18,579 million, which was down 0.5% from €18,672 million in the same time of the previous year.
Ms. Cabanis said Danone now considers Argentina to be hyperinflationary as defined by the rules of the I.F.R.S. Foundation, a not-for-profit organization that develops globally accepted accounting standards. The hyperinflationary designation means Danone beginning on Jan. 1, 2019, will exclude Argentina from its like-for-like definition. Argentina accounted for about 3% of Danone’s net sales in the first half of 2018.