During the last year, Danone has accelerated its organic growth, expanded its portfolio and announced plans to invest in start-up companies that have a healthier focus. These shifts have led to financial and brand growth unmatched by few competitors, earning it the title for turnaround company of the year.

Michael Neuwirth, a spokesman with Danone North America, told Food Dive the company has seen substantial growth in recent years as it has shifted its resources to the better-for-you market — highlighted by the recent acquisition of plant-based foods maker WhiteWave in 2017 for $12.5 billion. Neuwirth, who has been with the company for 20 years, said Danone has narrowed its focus by shedding pasta, beer, cookies and champagne brands.

“The transformation has been both very significant in terms of narrowing in the areas in which the company competes, as well as a profound change and evolution from being a European-centric company to a global food and beverage company,” he said.

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The company’s strategy seems to be working. The French food giant delivered a strong second quarter, with sales up 3.3% — bringing the yogurt giant to 4% sales growth in the first half of the year. Although Danone didn’t have the strongest third quarter, the yogurt company said its dairy and plant-based operation in North America posted its fifth consecutive quarter of growth, with sales up 2.7% on a like-for-like basis.

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“The transformation has been both very significant in terms of narrowing in the areas in which the company competes, as well as a profound change and evolution from being a European-centric company to a global food and beverage company."

Michael Neuwirth

Spokesman with Danone North America

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"Danone's advantaged exposure in categories (yogurt, plant-based products, specialized nutrition, water) that are in sync with the latest consumer trends (health and wellness) gives it a head start on many of its peers that are still striving to optimize their brand portfolio," Morningstar analyst Ioannis Pontikis said in a note to clients after Q3 earnings last month. "We believe the strength of Danone’s competitive advantages should remain steady."

Mariano Lozano, CEO of Danone North America, told Food Dive in November that the company's brands tap into trends like probiotics with Activia, kids' snacks with Danimals, high protein and no added sugar or fat with its Oikos Triple Zero and Horizon organic milk, and plant-based options with products including Vega, So Delicious and Silk — the later four of which were acquired as part of its WhiteWave purchase. 

"Some other companies have maybe one mother brand, and they are willing to accommodate everything behind that mother brand. Each [of our brands] has a role to play in specific categories. That is what has helped us navigate ... in a challenging time for the yogurt category," Lozano said. "We are playing in categories that are mainly on trend, but at the same time, underdeveloped." 

Danone is aiming to globally triple its plant-based business from $1.9 billion in sales to $5.7 billion by 2025. The company is also planning to take flagship brands like Light and Fit, Oikos and Danimals that operate in the traditional dairy space and expand them into plant-based varieties, he said. 

A​fter a period of early struggles with some of the products acquired as part of the WhiteWave deal, Lozano said Danone has come "quite a long way." 

Growing its presence and portfolio

On top of its growth in sales, Danone announced this year it plans to invest in start-up companies with a focus on everything from organic farming to new protein sources. Danone Manifesto Ventures, the New York-based investment arm started in 2016, has focused on investing in healthy food and beverage companies.

So far, the investment group has taken stakes in better-for-you companies, including coconut water company Harmless Harvest and French baby food start-up Yooji. Now it is on the lookout for more partners. In September, Danone Manifesto Ventures led a $10.6 million investment in Mitte, a smart home water system. 

"Danone’s strategy is bold, inventive and nimble," Marla Kurz, a consulting firm contributor for Kotter and a business writer for Forbes, wrote earlier this year. "If implemented effectively, it could give them the agility to power through changing consumer tastes and intense market conditions."

In February, Emmanuel Faber, Danone's CEO, told CNBC the company wanted accelerated growth in 2018 and that he is "paving the way for Danone to really be leading the food revolution that is sweeping the (better-for-you) category."

“We are going to be part of the people that are transforming and embracing that revolution as an opportunity and going to become the biggest organic food business in the world, to be the largest plant-based alternative business in the world in one of its biggest market in North America is part of this bet,” Faber said.

Increased transparency

In addition to the company’s continued growth in the better-for-you sector, Danone has increased its transparency. DanoneWave's U.S. subsidiary changed its name to Danone North America and achieved B Corp certification in April, two years ahead of time.

B Corp status is a certification that tells consumers the company is adhering to different standards, such as transparency, accountability and standing for good causes.

“It is a measure of progress that is quite transparent and requires continual improvement in areas such as policies and practices related to people, the environment, suppliers and all the areas in which we operate,” Neuwirth said. “Continual improvement requires continual focus.”

Read More

• From plants to traditional dairy, Danone exec touts 'big runway' for growth

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• Danone sales rise 1.4% amid strong demand for yogurt and plant-based foods

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