Promotions help revive Danone’s volumes

Posted by Isobel Drake on 27th July 2009

Danone, the world’s largest yoghurt maker, has reported a sales rise of 2.2 per cent after stripping out the negative impact of currency translation. The dairy firm saw volumes rise, reversing the trend of volume declines.

“Our sales and results in the first half of 2009 clearly show that we are on the right track,” Franck Riboud, Chairman and CEO of Danone, said. “The numerous initiatives we have launched in various countries, to quickly adapt our offer to consumer needs, particularly in Dairy, have been seamlessly executed and have enabled a clear acceleration of our volumes.”

“We will continue to expand this strategy in the coming months, by gradually rolling-out initiatives across additional geographies and categories.”

Mr Riboud said Danone would endeavour to “accelerate” their market expansion after their capital raising activities left them with the opportunity to make further acquisitions.

The company credited marketing initiatives for the turnaround, which will now be rolled out across their geographic regions. The initiatives centred on price reductions, pack size adjustments and “intensified advertising campaigns”.

Their dairy and nutrition divisions were the leaders, while water, once again, was a laggard. Despite a deceleration in decline, water sales fell as consumers in developed economies shied away from bottled water.

The bottled water sector has been one of the most impacted in the food and beverage industry as the global recession and environmental campaigns take their toll on sales in developed markets.

Outlook“Our scenario for 2009 remains that current consumption patterns in our key emerging and developed markets will continue over the balance of the year, with no significant improvement or dramatic breakdown,” the dairy firm advised in a statement. “Our sales growth will, therefore, continue to be mainly driven by our leading brands, with a clear focus in all key markets on increasing their functional value for money to respond to the spending pattern of our consumers. As a result, we expect to gain further market share in our key geographies.”