In the first quarter, Danone faced challenges in Europe as it initiated single-digit pricing across all geographic zones. In particular, the company’s essential dairy and plant-based products (EDP) business suffered due to opposition from retailers during price negotiations. As a result, Danone experienced a loss in business in the opening quarter.
Finance chief Juergen Esser acknowledged the impact of the failed price talks, stating that the company had faced shipment disruptions towards the end of the quarter. Despite this setback, Danone remains committed to staying firm in negotiations to build a strong sales base for the remainder of the year.
While Danone saw 2.8% like-for-like sales growth in Europe, the pace was slower compared to previous quarters. The company attributed this to market share challenges in March and April. However, Danone expects normality to return in May, with price increases being implemented selectively to remain competitive.
Overall, Danone’s EDP business posted a 3% LFL growth, supported by its North American platform and emerging markets. Despite the challenges in Europe, the company continues to focus on building competitiveness in the EDP category.
Looking ahead, Danone delivered group sales of €6.79 billion for the first quarter, surpassing its full-year outlook of 3-5% growth. The company remains confident in its growth trajectory and is optimistic about delivering a balanced growth algorithm in the future.
In addition to its European operations, Danone saw varying sales growth across other geographic segments. The company remains focused on strategic initiatives to drive growth and profitability in each region.
Despite facing challenges, Danone is optimistic about the future and remains resilient in the face of external volatility. The company is confident in its ability to navigate changing market dynamics and is poised for success in the coming quarters.
