CHINA- French multinational dairy products corporation, Danone has reported an “extremely strong” business performance in China for the fiscal year 2023 (FY23).
The company’s CEO, Antoine de Saint-Affrique, highlighted the growth driven by its specialized nutrition portfolio, particularly in infant and medical nutrition products.
Danone’s FY23 full-year sales reached €27.6 billion (US$29.9 billion), marking a 7% increase on a like-for-like basis. The recurring operating profit amounted to €3.5 billion (US$3.79 billion), with a margin of 12.6%, up 40 basis points from the previous year.
According to the company, the standout feature of the annual performance was its specialized nutrition business in China, North Asia, and Oceania.
The region reported a notable 10.1% increase in sales on a like-for-like basis, reaching €3.5 billion (US$3.79 billion) in FY23.
Specialized nutrition, encompassing both infant and medical nutrition, emerged as the largest portfolio in this region, with sales growing by 8.3% to €2.45 billion (US$2.65 billion).
CEO Antoine de Saint-Affrique attributed this success to a stronger infant formula portfolio and a robust tube-feeding nutrition business.
He expressed satisfaction with both the quality and quantity of growth, emphasizing the business’s resilience in China.
Danone’s success in China’s infant nutrition sector aligns with the market consolidation following the government’s introduction of a new national registration standard last year.
The company obtained the required registration, enabling the launch of Aptamil Essensis, the first product approved under the new standard.
Positioned as a premium offering, Aptamil Essensis features Danone’s patented Syneo formulation, a blend of probiotics and prebiotic oligosaccharides.
According to data from Kantar Worldpanel, Danone’s Aptamil infant formula claimed the second-highest market value share after local brand Feihe, with a 12.9 %share compared to Feihe’s 17.8%.
Notably, Danone revealed that it is eyeing growth opportunities in tier three and four cities for its infant formula business, emphasizing penetration, innovation, and distribution.
The CEO also highlighted Danone’s strong tube-feeding business in China, with plans to introduce more nutrition powder products post-hospital discharge to expand the company’s portfolio further.
Beyond infant nutrition, Danone experienced growth in other sectors in China. Sales from the region’s waters business, including the electrolyte beverage brand Mizone, increased by 14.1% to €692 million (US$750 million).
Additionally, essential dairy and plant-based products (EDP) grew by 15.3% to €360 million (US$389 million).
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