With inflation easing slightly, consumers are buying branded products again, Danone reports. The multinational’s focus on limiting price increases sees its volumes pick up again.
Better than expected
Danone’s sales did decline 4.1 % in the second quarter, but that was mainly due to the divestment of the Russian operations and the sale of the Horizon Organic and Wallaby brands in the United States and Michel & Augustin in Europe. On a comparable basis, sales went up 4 %, while prices increased by only 1 %. The group managed to improve its operating margin and earnings per share rose 11.6 %.
These figures are better than expected, especially as competitors Unilever and Nestlé had to admit to disappointing results just last week. Both multinationals saw consumers drop out as a result of sharp price increases. Danone, however, limited its price increases and now says it sees consumers returning to major brands as inflation eases slightly. The dairy and water group continues to invest in its growth platforms: protein-rich products, medical foods, coffee creations and out-of-home consumption, CEO Antoine de Saint-Affrique said. At the same time, the manufacturer remains focused on its core ranges.
