- Danone's North America Essential Dairy and Plant-Based unit showed sales of $1.5 billion, up significantly from $738 million for the same period last year, according to its latest earnings report, released this week. Danone acquired WhiteWave earlier this year for $12.5 billion, and that acquisition more than doubled its North American business.
- When factoring in WhiteWave's sales as a stand-alone company last year, sales for the overall newly constituted company rose 4.7% to $7.61 billion compared to the year-ago period. Danone confirmed its full-year guidance and expects to deliver double-digit EPS growth for 2017 of more than 12%.
- "This reflects the strength of our portfolio of cohesive consumer health-focused brands and a solid execution against our strategy, with a step-up in innovation and activation plans," CEO Emmanuel Faber said in the earnings report.
So far, Danone seems to be efficiently harnessing trends, making smart acquisitions and divestitures and investing in creative marketing to keep innovative products before the public. These strategies appear to be working as the company positions itself for a successful and profitable year.
Danone has managed to stay afloat in the competitive U.S. yogurt market in part because of the popularity of Greek yogurts and increased sales of its health-smart options. Danone has been trying to supercharge its signature yogurt segment many ways — including starting to get Non-GMO Project verification for its Danimals and Dannon brands. By the end of 2018, the manufacturer expects to have the certification on all of its major yogurt brands.
But yogurt alone isn't growing sales, which is a large part of the reason why Danone took over WhiteWave. The French company's portfolio now includes Silk, Horizon Organic milk, Wallaby Organic yogurt, the So Delicious non-dairy line and Earthbound Farms packaged salad. Danone has been busy promoting its new brands and their different appeals.
Danone's plant-based food and drink posted robust gains, especially through nut-based beverages in the U.S. and North America, the earnings report states. This success isn't just limited to Danone. Milk alternatives have surged in popularity in the United States in recent years. Sales were up 9% in 2015, according to Mintel, while dairy milk sales fell 7% in the same period.
Consumers are also loving more indulgent non-dairy options, like the So Delicious Dairy Free ice cream line. Nielsen data indicates non-dairy ice cream sales in the grocery and supercenter sectors jumped 46% in the 52 weeks ending April 29. As reported by MediaPost, So Delicious frozen dessert sales increased 15% in the same period.
WhiteWave’s Horizon brand gives Danone a strong foothold in the U.S. organic dairy market. While the market as a whole is suffering from an oversupply, the report states that Danone is trying to find new places to use its organic milk, including yogurts, cheeses and creamers. The company also has plans to introduce vitamin and protein-enriched milk-based drinks, as well as using packaging innovations to increase shelf life. The strategy may already be paying off. The company reported that coffee creamers have posted robust growth, especially seasonal flavors — like those offered by WhiteWave's International Delight as well as the brand's innovations like One Touch Latte.