PARIS — The chief executive officer of Danone SA described 2015 as a “year of progress and delivery.” Net income for full year advanced 7.4% on a like-for-like basis to €1,282 million ($1,408 million), or €2.10 per share ($2.31), from €1,119 million ($1,229 million), or €1.88 ($2.06). The company said organic sales increased 4.4% for the year to €22,412 million ($24,608 million) from €21,144 million ($23,216 million) the year before.
A key driver for the Paris-based dairy giant’s return to profitable growth is progress in the U.S. dairy market, in part due to a rebound in the yogurt category, where the company markets such brands as Dannon, Oikos, Light & Fit and Activia.
Emmanuel Faber, c.e.o. of Danone SA |
“So we have more feet in the fresh chilled aisle in the supermarkets in the U.S. available for our growth,” said Emmanuel Faber during a Feb. 23 earnings call with financial analysts. “And Danone has actually taken more than its fair share last year of this additional growth. So we end up the year in the U.S. with a market share that is a record high historic, being the co-leader in the Greek segment half of the market (and) by far the leader in the traditional segment.”
Contributing to the company’s improved performance in the category was the introduction of Oikos Triple Zero, which Mr. Faber said “has been growing very fast and recapturing or reigniting growth actually in our Greek category overall and with, I think, lasting effects for 2016.”
Another successful launch for the company was Danimals Squeezables yogurt pouches.
“Puts us, for the first time ever, as the leaders in the U.S. in the kids’ segment,” Mr. Faber said. “Never been there before. We intend to stay. And that again is a good and solid base for us to continue our growth.”
A third important innovation for Danone in the past year was Dannon Light & Fit Protein Smoothies, “which has been growing fast and really establishes also both the growth and our leadership in innovation in this area,” Mr. Faber said.
Going forward, more of Danone’s product development may address consumer demand for natural and organic options. Commenting on competitor Chobani’s advertising campaign earlier this year that highlighted specific ingredients in Dannon Light & Fit and General Mills’ Yoplait Greek 100 yogurts, Mr. Faber said: “I think… it’s interesting, because it tells something about the U.S. market these days, because the basic of what I think that advertising campaign was trying to convey was the importance of (natural) for U.S. consumers. And that’s clearly something that we see growing.”
Citing examples in Danone’s bottled water and baby food product lines, Mr. Faber said the company has seen significant growth from premium and organic options.
“Our organic business in dairy is still maintaining and strengthening its leadership,” Mr. Faber said. “Our Brown Cow business, which is a non-G.M.O. yogurt business, is also growing fast, next to Stonyfield (organic yogurt), and we see a lot of customers, big customers, moving into more (natural) and going organic, where, frankly, we didn’t see them a couple of years ago.
“…we pay a lot of attention to what happens in the U.S., because it tells a lot, and it’s an important market for us. I think this (natural) trend is here to stay. And no doubt that we will look at it carefully.”