Danone posted strong Q1 2025 results, with like-for-like sales up 4.3% predominantly driven by price (2.4%) and volume/mix (1.9%) to reach €6,844m, in line with analyst expectations.
Specialized Nutrition led the group’s growth with 5.3% LFL sales growth, followed by Waters (4.1%) and Essential Dairy and Plant-Based (EDP, 3.7%).
“We see continued strong momentum in high-protein dairy products, which start to be amplified by the Activia kefir ranges, which are well-received by retailers and customers across Europe,” explained Juergen Esser, CFO at Danone. “The HiPRO brand is also again posting significant growth, particularly our more functional beverage propositions as well as plant-based yogurts.”
He added that Danone is increasingly developing formats such as drinkable yogurts to encourage on-the-go consumption and drive performance in out-of-home, a segment traditionally driven by its Waters business.
Functional dairy, including high-protein brands such as HiPRO in Europe and Oikos in North America, was a major growth contributor within EDP.
In Europe, Danone’s high-protein sales grew in double-digit terms. “We are pleased with the ongoing advancement of Essential Dairy and Plant-based led by functional items such as our high-protein products which are experiencing double-digit growth,” Esser said. “We are also expanding our fiber and kefir portfolio under the Activia brand that is performing well. In plant-based, the HiPRO brand is now consistently delivering quality results and growing at good pace, driven by functional beverages as well as plant-based yogurts.”
In North America, Oikos PRO led the growth, showcasing double-digit expansion; in LATAM, the company is rolling out its high-protein ranges having seen ‘solid growth’ across EDP, led by the Danone, Danette and YoPRO; and in Japan, Oikos and Activia continued to deliver further market share gains, Esser said.
Softness in creamers – but STōK ‘doing fantastically’
Danone’s Coffee Creations business underwhelmed in North America, where it recorded a soft start to the year ‘due to temporary service challenges’ - notably, the recall of more than 75,000 bottles of International Delight coffee creamer due to reports of spoilage and illness this year, and a further recall of a peppermint mocha creamer in November 2024.
Esser said Danone had been gaining share over the last two years, but competition in the category is strengthening. “Because the category is attractive, there is obviously a lot of competition, because many people want to participate to that growth, from current market leaders but also from several incumbents into that category,” the CFO said.
“In Q1, we faced strong competition like we faced last year, but on top of that, we had internal performance issues, which created even out-of-stocks at shelf, which is the thing you normally want to avoid.
“Fortunately, those issues have now been resolved and we are rebuilding share of shelf. And so that means that we should see from now onwards improving performance. And so what that means net-net moving forward is that, because we have a very strong brand because we – I believe we have a very good innovation pipeline. And we are getting back with our commercial activities, which we needed to pause over the last couple of months. We are confident to go progressively back to capture the growth.”
The CFO added that the segment had been consistently growing at a mid single-digit pace and that there was ‘no reason to believe that the category dynamics should change, because people continue to increase coffee consumption at home’.
And in RTD, STōK, its ready-to-drink coffee brand, ‘has been doing fantastically over the last quarters’, Esser said.
“It’s going from strength to strength and it is starting to become a sizable part of the portfolio, so we are having a very strong portfolio here to play [with] and to go back to capture the growth the category is offering us progressively over the next quarters.”