Baby Food Helps Danone to Boost Sales

TEMPO.CO, Jakarta - Paris-based multinational company, Danone Group, posted a better-than-expected 6.9 percent rise in third-quarter sales, or equals to around US$ 6.85 billion, as a result of improving baby food sales in Asia.

As reported by Reuters on Wednesday, October 15, 2014, baby food sales jumped by 19.2 percent in the 3rd quarter of 2014. The performance managed to beat the company-compiled average of analyst estimates of 5.8 percent growth in group sales and a 15 percent rise in baby food sales.

Chief Financial Officer for Danone Group Pierre-Andre Terisse, said that Danone's water and medical nutrition units also displayed strong performances. "The dairy division, which makes the bulk of group sales, is lacking in expectations, hit in particular by higher milk prices in Russia and the Ukraine crisis," he said.

The crisis in Ukraine caused dairy prices to spike and significantly affect sales performance. Milk volume drops by 7.1 percent although sales increased slightly by 0.7 percent after the company decided to increase yogurt prices. Danone is the largest producer of yogurt in the world with their top brands Activa and Actimel.

Terisse said that the Chinese market contributed to six percent of the total group sales. However, the recalling of the Dumex infant formula product had affected sales figures. "We need to work hard to regain the trust of our consumers in China," he said.

REUTERS | SETIAWAN ADIWIJAYA