Dive Brief:
- Danone SA reported revenue growth of 4.2% to €5.6 billion ($6.36 billion) from a year earlier for the three months ended Sept. 30.
- Sales were boosted by growth in the baby food, water, and medical nutrition segments, which made up for a 3% drop in fresh dairy, Danone's largest business being revamped after suffering falling sales over the past few years. Danone's water segment reported a 12% increase in sales.
- "In recent years Danone faced problems that included a subdued economy in Europe and food-safety scares in Asia. Emmanuel Faber, its new chief executive, took the reins of the company in October last year and has vowed to return Danone to sustainable growth, reviewing its business in China and overhauling its fresh dairy unit," The Wall Street Journal reported.
Dive Insight:
Rival Unilever recently reported sales growth as well with a 5.7% jump last quarter, thanks in part to a "strong ice cream season," as sales for the refreshments category, which includes ice cream, were up 8.5%.
Nestle, on the other hand, reported a 2.1% decline in sales for the nine months ending in September and lowered its full-year outlook to 4.5% from its previously expected 5% to 6% growth.
For the first half of the year, Danone reported a 17% increase in adjusted operating profit. Dealing with a lagging fresh dairy segment is nothing new for the company, as it has reported the same in previous quarters, but lower milk prices in the U.S. and Europe has helped the recovery of this category.