French food group Danone said it banked on synergies from its acquisition of U.S. organic food producer WhiteWave and on a one billion euro cost-cutting plan to lift its recurring operating margin above 16 percent of sales in 2020.
The world’s largest yoghurt maker made the forecast in a statement issued on the last of a two-day seminar in Evian, eastern France, to detail its long-term strategy.
Danone also said it targeted overall like-for-like sales growth of between 4 percent and 5 percent in 2020 against 2.9 percent in 2016. Its operating margin stood at 13.77 percent last year.
Danone unveiled in July 2016 plans to buy WhiteWave – maker of Silk almond milk and Earthbound Farm Organic salad – in its largest acquisition since 2007, a move it said would double the size of its U.S. business. The deal finally closed on April 12.
Whitewave’s products have outperformed mainstream packaged food businesses in recent years as they are in line with a consumer shift toward natural foods and healthier eating and should help Danone as it struggles with challenging conditions in dairy in Europe and babyfood in China.
China’s largest dairy company Yili Group said the other day it will bid “about $850m” for Stonyfield, the US organic yoghurt company owned by France’s Danone.
Yili had a turnover of $9.3bn in 2015, according to Rabobank, making it China’s largest dairy group, and the tenth largest in the world.
Consolidated sales stood at €5,464 million, up 0.7%. Fresh Dairy Products €2,741 million up 2.4%.
In Europe, sales continued to be impacted by difficult market conditions and Activia’s performance. As announced in February, there will be new product launches in Activia’s range.
Danone and WhiteWave combine their activities for North America to operate as a Strategic Business Unit, named “DanoneWave”. As previously disclosed, the combination will include Danone Dairy’s and WhiteWave’s current North American businesses under the leadership of Lorna Davis, who has been appointed Chief Executive Officer of the combined entity.
Danone and WhiteWave will now combine their activities in North America to operate as a Strategic Business Unit, named “DanoneWave”. As previously announced, the combination will include Danone Dairy’s and WhiteWave’s current North American businesses under the leadership of Lorna Davis, who has been appointed Chief Executive Officer of the combined entity. Alpro will join forces with Danone Dairy as a key pillar of its new plant-based category, managed by Gustavo Valle, with the aim to expand and grow the plant-based category around the world.
Danone and the Ellen MacArthur Foundation have joined a partnership aimed at accelerating the global transition to a circular economy.
For decades, conventional supply chains have been linear; taking, making and disposing of resources often to landfill. With the global population set to reach nine billion by 2050, access to quality food and water is becoming an increasing challenge.
Founded in 2010 by renowned yachtswoman, Dame Ellen MacArthur, the Foundation works to accelerate the transition to a circular economy, collaborating with businesses, government and academia to build a framework for an economy that is restorative and regenerative by design.
As the Foundation’s ninth Global Partner, Danone will embark on a three-year partnership to further embed circular economy principles both inside and outside Danone. It marks an important step in Danone’s quest to produce quality products that preserve natural resources cycles, while also enabling future growth for the business.
The European Commission past Friday cleared France’s Danone to proceed with its $10.4 billion purchase of U.S. organic food producer WhiteWave, subject to it selling a business in Belgium.
Danone will sell a large part of its ”growing-up milk” business in Belgium, as the Commission said only Nestle would have remained as a competitor in the country otherwise.
Danone will acquire WhiteWave for approximately USD 12.5 billion.
WhiteWave, which generated USD 4 billion in sales in 2015 and whose portfolio includes leading brands in the Premium Organic Dairy, non-GMO, Plant-based alternatives to milk & yogurt, Fresh Foods, and Coffee Creamers categories, represents a key opportunity for further growth for Danone and enable the French firm to build a stronger North American presence.
Together, WhiteWave and Danone plan to create an industry leader strongly aligned with consumer trends for healthier and sustainable eating and drinking options. The transaction is expected to result in approximately USD 300 million of EBIT synergies by 2020.
US leading yogurt maker, Dannon – a subsidiary to French Danone, announces a pledge to its farmers, retail customers and consumers to further improve sustainable agriculture practices for its milk supply, to increase transparency for its portfolio of products and evolve to more natural and fewer ingredients for flagship brands.
Dannon commits to offer products coming from a more sustainable agriculture by working with its dairy farmer partners and their suppliers to progressively implement the use of sustainable agriculture practices and technology that leads to better soil health, better water management, an increase in biodiversity, and a decrease in carbon emission.
Dannon commits to bring all products from three flagship brands (Dannon®, Oikos® and Danimals®) towards the use of fewer and more natural ingredients that are not synthetic and non-GMO. Importantly, Dannon also commits that for these brands the feed of its farmers’ cows will be non-GMO, within a transition period of 3 years. The ambition is to evolve the remaining brands over time.
The Fresh Dairy Products division reported sales up +2.6% like-for-like, buoyed as anticipated by renewed growth in North America. Growth includes a slight -0.6% decline in volumes and a steep +3.2% rise in value.
Business in the CIS & North America area picked up markedly: In the United States, growth gathered pace over the quarter, driven by targeted investments backing brands and by the category’s return to growth. In Russia, with consumer demand sluggish, Danone continued to enhance the portfolio through higher prices and a positive mix effect, once again offsetting the significant decline in volumes in low valueadded segments.
In Europe, the division pursued a concerted effort to gradually steer its business back to profitable structural growth. Fourth-quarter trends are largely in line with those observed in the third quarter of the year. This includes, in particular, the sequential improvement in volumes, supported by the favorable basis of comparison signaling the end of PRGM (Profitable Revenue Growth Management).
The ALMA region reported a marked rise in sales reflecting contrasting performances in emerging countries, with positive results in Argentina, Mexico and Japan, and a slowdown in Brazil in a very volatile economy.
Danone is to end production at two of its dairy factories in Russia during the first quarter of the year. The facilities are based in Cheboksary, a city on the Volga river 650km east of Moscow, and in Tomsk, a city in Siberia, 260km north of Novosibirsk.
The end of production in Cheboksary and Tomsk will affect around 300 staff.