Danone has to deal with lower volumes

Food company Danone’s turnover grew 3 % in 2017’s first quarter, but volumes did drop 2.6 % with disappointing dairy products’ sales.

Slow start

Danone’s total first quarter turnover reached 5.46 billion euro, up 3 % compared to the previous year. That growth was entirely thanks to increased prices (+ 3.3 %) and exchange rate fluctuations, because sales volumes dropped 2.6 %. The company did have a 0.7 % like-for-like turnover growth.

“As anticipated, sales are showing a slow start to the year. In a continued volatile environment, we have made progress on our key priorities across our categories”, CEO Emmanuel Faber said. The Fresh Dairy division’s sales volume dropped 5.3 % and Water sales also slumped 1.3 %. Early Life Nutrition did grow 0.1 % and Medical Nutrition even grew 4.8 %.

Whitewave acquisition finalized

Geographically, every region had to deal with setbacks: European turnover and volumes dropped 4.3 % and 2 % respectively. The GOS (Russia, Belarus and Ukraine) and North American regions had a 12.3 % turnover growth, but sales volumes dropped nearly 5 %.

Only last week, Danone finalized its Whitewave acquisition, which will result in a new North American division, called DanoneWave. Every Danone dairy product and all of Whitewave’s activities will be placed in this new division, led by Lorna Davis, its new CEO.

Whitewave, which also owns Belgian Alpro, mainly focuses on healthy food and it is Danone’s attempt to reach and service an ever-larger group of customers looking for this type of food. Danone paid about eleven billion euro for the acquisition, the largest in the company’s history.