In the first quarter of 2013 food company Danone has taken advantage of the rising demand in dairy for babies and children in growth markets. This way the French dairy and water giant could compensate the further decrease in demand for its products in Europe.
Baby food strongest grower
Danone had a rise in sales of 4.3% to 5.34 billion euro in the first quarter of this year. Comparable sales (not including currency fluctuations) rose by 5.6 percent: 3% because of extra volumes, 2.6% was because of higher prices.
The French company saw the sales of baby food rise by 7.8%, while medical food had 6.2% higher sales. The water division climbed by 4.6%, while the dairy branch had to be satisfied with a rise in sales of no more than 0.5% percent.
Western Europe remains difficult
“The solid performance in the first quarter once again reflects the contrast between robust growth in growing markets and the slow market in Europe”, says CEO Franck Riboud. In Western Europe sales of Danone did shrink again: -5.1%. Danone had the largest growth in Latin-America, Asia, the Middle East and Africa: +16.6%. The United States, Canada, Central and Eastern Europe are somewhere in between with +8.5%.
Danone did confirm their earlier prospects for 2013: a comparable growth in sales of at least 5%, in combination with a decreased operational margin by 30 to 50 basis points. Analysts do however predict rising pressure on prices in Russia and China.