Danone’s full-year volume-mix sprang to positive territory for the first time since the food major launched its strategic plan, Renew Danone, in 2022.
The company’s high-protein portfolio was a major contributor to a strong performance in FY2024, but gut health brand Activia and the company’s ultra-premium infant nutrition products were also key.
Danone’s net income (€2.02bn vs €881m in 2023) and operating income (€3.4bn vs €2.04bn in 2023) both rose in the year, but sales dropped back 0.9% to €27.4bn versus €27.6bn in 2023.
Earnings per share (group) more than doubled at €3.14 vs €1.36 in 2023, with recurring EPS at €3.63 (2023: €3.54). Recurring operating margin rose to 13% (FY23: 12.6%) and free cash flow reached €3bn (2023: €2.6bn).
Danone CEO Antoine de Saint-Affrique said Q4 2024 marked the sixth quarter in a row of volume-mix improvement for the food major, with high-protein, coffee and medical nutrition posting double-digit growth.
“We are making progress on our Core as shown by our positive volume-mix in EDP Europe for five consecutive quarters after 10 years of decline,” the chief executive said. “But there the journey is not over and there is still plenty to do: from sharpening Silk in the US to continuously strengthening Activia.”
Diabetes and weight management
Danone’s long-term focus on gut health and nutrition research and its strategic shift to formulations perceived as healthier – such as reduced-sugar yogurts and plant-based dairy alternatives – is paying off, particularly in the US.
There, Danone North America successfully petitioned the US Food and Drug Administration in 2024 to secure a science-backed claim linking yogurt consumption with reduced risk of developing type-2 diabetes.
The company has also bolstered its consumer-facing marketing campaigns to focus on support for those with diabetes / on weight management journeys.
According to Antoine de Saint-Affrique, Danone has seen ‘a direct increase in our yogurt consumption with consumers looking for reduced sugar options’ through the company initiative addressing diabetes. “We see an uptake on yogurt in this population,” the CEO said.
“We are also providing valuable nutritional support dedicated to individuals on a weight loss journey,” he added. “We see a broader trends around consumers living a more active lifestyle, knowing that both these journeys drive a need for protein and for better gut health. And it shows.
“Our low-cost, high-protein proposition in the US has now hit retail sales value of over $1bn.”
Antoine de Saint-Affrique, CEO, Danone
In Europe, high-protein grew in double-digit terms, which was attributed to label claims around muscle recovery and the newly-launched range of kefir under the Activia brand.
Across Danone’s entire EDP category, sales decreased in the year by 6% to €13.5bn from €14.3bn in 2023, but like-for-like sales grew 3.8% and volume-mix was up 2.7%.
Ultra-premium infant nutrition: another winner
Danone’s ultra-premium infant nutrition brands, such as Nuturis, led the charge in supporting like-for-like growth in the company’s specialized nutrition category, where sales rose 5.1% in FY2024 to just shy of €9bn (2023: €8.5bn).
In China, North Asia and Oceania, infant milk formula continued to deliver significant market share gain in a category which is showing further signs of improvement, noted Juergen Esser, the company’s deputy CEO who is also in charge of finance.
“Nurturis…was launched softly in Hong Kong only a few months ago and shows encouraging early signs,” CEO Antoine de Saint-Affrique said. “It comes on the back of another ultra-premium format launched in China in late ’23, which is now meaningfully adding to our growth in China.”
The group’s medical nutrition business maintained momentum in the region, with double-digit growth for the quarter driven by both the Nutrison and Neocate brands.
Plant-based: Alpro ‘solid’, Silk to be ‘sharpened’
Danone reported that Alpro has posted strong sales in Europe, and the company will use these learnings to support the growth of Silk in North America.
Juergen Esser said: “We’re confirming a solid growth contribution from our Alpro brand in the plant-based segment [in Europe] which is now back into competitive growth momentum since several quarters.
[In North America], the teams are applying the learnings from our successful Alpro turnaround in Europe, repositioning the brand on clear occasions and consumer needs. At the same moment, we are complementing the Silk-branded portfolio with added-value innovations like the kids range which we launched in this last quarter of the year 2024.”
The progress on Silk will be conducted ‘step-by-step’, added Antoine de Saint-Affrique, stating that the company is targeting ‘a long-term fix’ for the brand.