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“Forced” change of command, return to growth, crazy overweight plant base… We made a year-end inventory for Danone | giant’s 2021

, as one of the giants in the food industry, Danone has always been regarded as the wind vane of global food and beverage innovation, and plant-based food and functional beverage can be called the two new camps of Danone 2021. How much creative inspiration can you get from the new Danone products introduced today?

Text: EVA fan

Source: foodaily daily food (ID: foodaily)

Recently, Antoine de Saint affrique, the new CEO of Danone, a French food giant, made his first public appearance at the third quarter analysis meeting and set out “five priorities”: in-depth understanding of business, sustainability, talent and culture, paying attention to category, brand and innovation, and the execution of business in all channels. Facing multiple challenges from the company, the new CEO not only set a “flag” for his personal work, but also defined several important development concepts of Danone, and the new cycle of Danone has been opened.
The global epidemic continues, the FMCG market is under pressure, trapped in the vortex of public opinion, and the management has undergone major changes… Danone’s development track in 2021 is full of thorns. However, as the basic dairy products and plant-based products business continue to maintain a strong growth momentum, the professional special nutrition business and drinking water and beverage business also continue to recover, Danone’s business development ushered in strong profitability growth in the third quarter.
Towards the end of the year, foodaily made a detailed review of Danone’s company dynamics, investment and financing, promotion of key products and personnel changes in 2021, hoping to summarize the strategic adjustment and product layout of global food giants, so as to bring new inspiration and reference to the product innovation of domestic brands, It also inspires new thinking for brands that have changed their corporate strategies due to the epidemic.
Photo source: Reuters
Return to profitable growth in the second quarter,
Strong growth in basic dairy and plant-based businesses
With the global epidemic raging and the economic downturn, small business operators have been directly defeated, and it is difficult for large enterprises with deep roots to survive. In 2020, in what Danone called “a year marked by health crisis”, the company’s annual operating revenue was 2.798 billion euros, a decrease of 13.6% over last year.
“COVID-19 has brought us short-term challenges in many key categories and regions, but it is clear that we have also identified significant long-term opportunities. These opportunities exist in the strategic framework of Danone and the portfolio we have chosen in the past few years.” Emmanuel Faber, the former chairman and CEO of Danone, said in the briefing. Therefore, despite the setback in 2020, Danone is full of confidence in the goal of restoring growth in 2021.
However, Danone’s performance in the first quarter of 2021 was still weak under the circumstances of epidemic situation, exchange rate and other negative factors. According to the report, the consolidated sales in the first quarter of 2021 was 5.657 billion euros (equivalent to about 44.304 billion yuan), a year-on-year decrease of 3.3%.
In the category business segment, probiotics, proteins and plant ingredients are increasingly “favored”, EDP in Europe and North America The (essential dairy & plant based) department achieved a steady growth of 1.6% in sales, but it was almost offset by the decline of 7.7% in professional nutrition department and 11.6% in water sales. In the EDP business segment, the plant product portfolio grew in double digits in Europe, while the three major brands of Actimel, danette and yopro contributed to the growth of the main market share of basic dairy products.
Source: milkpoint
The inflection point of recovery appeared in the mid-2021 financial report. Danone successfully achieved the goal of restoring profit growth in the second quarter, and the sales revenue in the quarter increased by 6.6% year-on-year to € 6.171 billion. With the news of performance recovery, Danone’s share price closed up more than 6%, standing at 60 euros.
“After experiencing a sharp decline in the first quarter, professional special nutrition has returned to growth in the second quarter.” Juergen Esser, chief financial officer of Danone, said at the analysis meeting. Looking forward to the development in the second half of this year, Esser said that the situation in the second half of this year is related to two factors: one is the change trend of the epidemic situation, and the other is the inflationary pressure. The inflation level in the first half of this year has reached 7%, and it is expected to rise by 1-2 percentage points in the second half of this year.
Source: Danone
However, Esser also said that the epidemic and inflationary pressure will not change Danone’s positive prediction of performance in the second half of the year. Driven by the overall positive momentum of the category and market, the company still expects to achieve profitable growth in the second half of the year. In the context of high inflation, Danone will also further improve its productivity and selectively use pricing strategies to deal with the cost, especially from the price of raw materials and logistics. In any case, Danone will not use inflation as an excuse to reduce strategic investment. It is expected that the annual profit margin will be the same as that at the end of 2020.
Therefore, despite the huge “inflationary pressure”, Danone still achieved sales growth in the third quarter, with net sales of € 6.158 billion, a year-on-year increase of 3.8%, of which all businesses contributed to performance growth. Sales of basic dairy products and plant-based products increased by 4.1% year-on-year to 3.269 billion euros, professional special nutrition business increased by 2.9% year-on-year to 1.777 billion euros, and drinking water and beverages increased by 4.6% year-on-year to 1.112 billion euros. Among them, the sales revenue in Europe and North America increased by 3.9% year-on-year. At the same time, driven by the bright performance of China’s professional special nutrition business, the sales revenue in other parts of the world increased by 3.7% year-on-year.
Source: Danone China official website
According to the three financial report data released at present, Danone is recovering from the haze of the epidemic. The performance in the third quarter is higher than expected, which also gives Danone more confidence and confidence in the realization of the annual performance guidelines and the maintenance of the same operating interest rate. Danone expects that the macro-economic outlook will continue to recover gradually with the promotion of the vaccination plan, although there is uncertainty in the short term.
Sell Mengniu and Vega for subtraction,
Shares in Earth Island and harmless harvest overweight plant base
Danone attacks upstream and downstream and continues to optimize capital allocation
According to the financial times, Danone’s performance in 2020 is roughly in line with expectations, but its share price is at a seven-year low. The unsatisfactory performance made many investors demand that Danone needs to reset a series of assets. Danone also made a commitment to improve shareholder returns by optimizing asset allocation and realizing portfolio optimization.
Therefore, in 2021, we can see that Danone sells Mengniu business, which has been cooperating for eight years, Vega, a plant-based nutrition product brand with poor performance. At the same time, Danone also acquires and overweight potential plant-based brands such as Earth Island and harmless harvest, and expands production and increases long-term revenue by expanding plant-based production lines.
After 8 years, Mengniu China was officially stripped of its equity
On May 13, 2021, Danone issued a statement that it raised HK $15.4 billion (12.8 billion yuan) through the strategic sale of 9.82% of Mengniu Dairy. The transaction was settled on May 17, and most of the funds raised will be returned to investors through Danone’s share repurchase plan.
Source: Danone
Danone was associated with Mengniu in 2013. Danone was the second largest shareholder of Mengniu through COFCO group and private placement the following year. “Danone’s return on investment in Mengniu for 8 years is about 92%, which is low in 8 years.” Song Liang, senior analyst of dairy industry, said that Danone has made a substantial adjustment to its Chinese business after 2020. Out of its own strategic adjustment and development expectations for Mengniu, Danone has cleared up Mengniu’s shares, but the two will have full cooperation in technology development, cutting-edge products and market development in the future.
Source: Sohu
The epidemic in North America has a serious impact. Vega, a plant nutrition brand with sports nutrition as the core, is sold
Mengniu is only the first object of Danone’s “operation” on asset allocation. On June 18, Danone announced that it had signed an agreement to sell Vega, a plant nutrition product brand, to a fund managed by private equity firm WM partners. Vega products are sold in the United States and Canada, including sports and daily nutrition options. The product portfolio includes supplements, protein bars, powders and snacks. Danone said that the sale is also part of the strategic evaluation of the brand, SKU and asset portfolio, and is also to realize the decision of “sustainable capital allocation optimization”.
Source: Twitter
By acquiring 100% of the shares of Earth Island, it is expected that the global sales of plant-based foods will increase by 3 billion euros in five years
In addition to the “subtraction” optimization of the assets held, Danone also pays close attention to the current plant-based trend and plays the “addition” acquisition card.
On February 19, Danone announced the acquisition of 100% shares of Earth Island to strengthen its plant-based business. Founded in 1988, Earth Island is a manufacturer of follow your heart brand and plant-based food. It has a variety of plant-based products such as milk free cheese, plant-based sour cream, salad dressing and veganegg mayonnaise. Danone expects that this cooperation will help to achieve its goal of increasing the global sales of plant-based foods from 2 + billion euros in 2020 to 5 billion euros in 2025.
Source: Deli market news
Aim at Coconut base and buy a majority stake in harmless harvest
On 1 July, Danone Manifesto Ventures (DMV) also announced the purchase of a majority stake in harmless harvest. This transaction marks the completion of Danone’s first majority acquisition in the United States. Harmless harvest was founded in 2009 and provides a series of organic coconut products, including coconut water, snack drinks and yogurt substitutes. The company expects sales to exceed US $100 million in 2021, double its revenue in 2017.
DMV had previously led the $30 million financing of the brand. It is believed that the acquisition plan will add fire to the growth of Danone’s plant products business, and Danone will continue to provide financial, strategic and operational support to harmless harvest after a new round of investment.
Source: Business Wire
From a series of buying and selling actions, we can see that Danone has firmly grasped the “plant base” and launched the market. This is the general trend of the global food and beverage industry, and naturally becomes one of the main growth sources of giant Danone. Therefore, Danone’s deployment on the “overweight plant base” is not only reflected in the adjustment of the layout of downstream brands, but also reflected in the expansion of production.
Therefore, on February 25, Danone invested 12 million euros to expand a plant-based production line of a Spanish factory, which will become Danone’s first mixed factory producing dairy yogurt and plant substitutes. The new production line will produce coconut and oat products specifically for the alpro, Activia and OIKOS brands of the production company in the local and international markets.
Source: livekindly
On November 18, in order to seize the greater bonus space of plant-based and meet the needs of new consumers, Danone announced to invest 43 million euros to transform its villecomtal sur arros dairy factory in southern France into the production base of its plant-based brand alpro, and the products will be supplied to the whole European market.
Source: Twitter
It can be seen that Danone intends to be in the field of “plant-based” in terms of capital and resource allocation of the company, and each financial report also proves that plant-based related products are one of the increasing needs of consumers. Obviously, this “favor” is not only in every major company decision, but also in the daily product promotion. Next, foodaily will take you to scan what representative new products Danone has launched in the plant-based field in the past year?
Probiotics, enjoy delicious food, sports nutrition, functional
Towards high-end, Danone’s plant-based products have been renovated one after another
According to innova’s “Top Ten Trends of global food and beverage in 2022”, plant-based product optimization ranks second. Innova said that previously, plant-based products were mostly aimed at imitating meat or dairy products. In the future, it will become an independent innovation platform, with more and more subcategories and more high-end. According to the statistics of innova global new product database, the number of plant-based new products positioned as high-end or enjoy delicious food has increased by 59% in the past year. The various new products launched by Danone in the past year are also verifying this change trend.
Following the plant-based yogurt and milkshake, forger project, a plant-based food company invested by Danone, launched a new milk free cheese series, which is made of probiotic cashew yogurt. The brand said that pure cheese can melt and stretch like its dairy products, making it the perfect choice for pasta, pizza and cornflakes. Moreover, the addition of probiotics also makes the product have functional attributes other than health.
Source: Deli market news
While entering the field of plant-based cheese, forger project also aims to expand the category of ice cream. According to Foodbev, a new organic milk free ice cream series has been launched in the forger project recently, focusing on cashew based, lactose free, soybean and gluten free. Launched in the United States, the series has five flavors: vanilla beans, chocolate, cream biscuits, salted caramel and mint. Stephen Williamson, co-founder and CEO of forger project, said: “our extension to the field of milk free ice cream is another step towards the ultimate goal of the brand, that is, to make amazing delicious, organic and plant foods.”
Source: vegnews
As mentioned above, in order to strengthen the business of plant substrate block, Danone completed the comprehensive acquisition of follow your heart brand manufacturer Earth Island at the beginning of this year. However, in a few months, the follow your heart brand began to expand its product portfolio and launched a plant-based macaroni supermac. USDA certified organic macaroni supermac comes in an 8.1-ounce box with a bag of sauce made of vegetables, cashews and beans. It can be easily stirred and served as a fast food or side dish. Supermac is an innovative organic substitute for traditional macaroni. It is fast and simple to eat and suitable for children.
Source: PRNewswire
In addition, at the beginning of the year, the plant-based brand silk of Danone North America also launched a functional plant protein beverage silk ultra specially developed for sports and fitness people. The product provides 20g complete plant protein per product, and the protein content is 2.5 times that of traditional milk, which is conducive to muscle maintenance and repair during daily training. The product is also a good source of calcium and trace elements such as vitamin A, D, B2 and B12, which can meet consumers’ more diversified nutritional intake and more ideal muscle building.
Source: perishable news
In addition to the “plant-based” field, which sub categories does Danone focus on? We focused on energy drinks.
Vitamins, super foods, bubbles +
Functional beverage products continue to break the circle
The desire to maintain health has spawned many health-oriented consumers around the world. In addition to the increased demand for plant-based foods, they are also expected to promote the growth of the functional beverage market.
According to the research data of allthe research, the global functional beverage market will be worth US $129.5 million in 2020 and is expected to reach US $208.2 billion by 2027. The compound annual growth rate during the forecast period is about 8.1%, ushering in substantial and rapid growth. Among them, the health and health care segment is expected to become the fastest-growing segment in the functional beverage market, with a CAGR of 7.6%. Danone has always been one of the top players in this market.
In February, the company brand acquired by Danone in 2011 launched a food supplement beverage to help maintain energy levels when consumers need it. The product has three flavors: strawberry, vanilla and cappuccino. Each bottle contains 9.8g protein and 21 vitamins, including B6, B12 and iron, which help reduce fatigue and fatigue.
Photo source: Chemist direct
In March, Evian Evian, a famous mineral water brand of Danone, took the opportunity to launch a new “Evian + Series” in the United States, announcing that Evian brand entered the functional bubble water track. This is Evian’s first aluminum can product, including four flavor combinations of raspberry ginseng, lime ginger, grapefruit basil and cucumber mint, Zero sugar, zero sweetener, zero calories, rich in magnesium and zinc, claiming to have the functional benefits of mediating cognition and alleviating fatigue.
Source: foodbevmedia
In the same month, Danone’s Volvo brand is expanding its touch of fruit series product portfolio and officially launched a new flavoring water containing vitamin B6. The beverage has low sugar content, uses natural spices to provide sweetness, does not contain artificial sweeteners, and adds vitamin B6 to help reduce fatigue. Danone said that the product was launched in response to consumers’ demand for healthy soft drinks.
Source: ocado
In addition, Danone has also made investment in the functional beverage sector. On March 24, the British functional beverage brand moju announced that it had completed a new round of financing of 2.5 million pounds (about 22.35 million yuan), which was led by Danone. The DMV of Danone enterprise venture capital department said that it had made a small investment in the company and planned to use the proceeds from this round of financing to accelerate the development of moju on the functional juice track.
Source: ingredients network
Founded in 2015, moju is committed to providing consumers looking for healthy functional drinks with a series of new choices of functional fruit juices. Most of the products are rich in vitamin C and vitamin D. recently, it has also launched probiotic drinks. Since the establishment of moju, brand sales have increased steadily, and retail sales are expected to reach about £ 9 million in 2021.
As the trump brand of Danone water business sector focusing on the field of functional drinks, and also the pioneer of vitamin functional drinks in China, the pulsation also continued to implement and upgrade the rejuvenation strategy this year after launching the largest brand upgrade in recent years last year – New spokesperson, new packaging, new taste, and launched a new vitamin bubble drink. Pulse China said it would create a variety of healthy water replenishment schemes for young people through all-round innovation, combined with a variety of life scenes such as home, work, outdoor and sports.
Therefore, pulse launched the classic peach beverage, combined the honey peach with the popular white peach flavor in recent two years, and gave consumers a new taste experience full of peach flavor.
Source: Danone
At the same time, it also launched a new vitamin bubble drink, which cut into the carbonated bubble track for the first time. The product can provide 4 vitamins and 11.5% dietary fiber per day. Different from the plain taste of traditional healthy bubble water, the pulsating unique double fruit flavor collides with bubbles, realizing a wonderful balance between health and delicacy, and truly enabling consumers to enjoy the pleasure of carbonated bubbles without burden.
Source: Danone
It is not difficult to see that the functional beverage industry has begun to focus on consumer demand from the product itself, which is also the most essential change in the business world in the past 10 years. Danone, which has extremely high consumer insight, has also put its investment objectives more on brands that can meet the new needs of consumers. This method of promoting overall growth through competition in investment fields outside the core brands will also promote Danone to open a broader global market.
Change of top management and replacement of head coach
Danone’s board of directors and leadership “take on a new look”
Since it is the year-end inventory, we have to mention another important thing that happened this year in the development history of Danone – in March, Danone announced that Emmanuel Faber resigned as the chairman and CEO of the company, and appointed Antoine de Saint Afrique as the new CEO in May.
Back in early 2021, the epidemic has repeatedly exacerbated the poor performance of Danone’s share price, and the market has obviously expressed insufficient confidence in the enterprise. Compared with its peers, Danone has always been on the side of slower growth. Month after month, this has created tension and doubts among shareholders.
Since the end of last year, Danone has received suggestions from many investors on corporate governance and business. In terms of corporate governance, a number of radical investors, including bluebell partners, a British private equity fund, have put forward the idea of separating the positions of chairman and CEO. Reuters reported that bluebell partners gave the reason that Danone’s share price performance was “disappointing”, so it asked the company to start looking for a new CEO and suggested separating the positions of chairman and CEO.
Image source: archyde
In terms of the company’s business, artisanpartners, another radical investor and claiming to be the third largest shareholder of Danone, also gave a number of adjustment suggestions and hired Jan Bennink, who had worked in Danone for seven years, as an external consultant. Jan Bennink said that the organizational structure based on the business unit created by the former chairman of Danone should not be questioned, but the medical nutrition business and infant nutrition business should be separated, Because of the limited synergy between the two professional businesses (these two businesses are currently classified under the professional special nutrition sector). In addition, the drinking water and beverage business, as well as the basic dairy products and plant-based products business need to be re routed to focus on the most profitable and promising products.
Source: Twitter
With constant internal disputes and pressure from shareholders for governance reform, Danone is deeply involved in the center of the “media storm”, and Emmanuel Faber, the former chairman and CEO, has become the target of public criticism.
You know, Faber led Danone in 1997, served as CEO in 2014 and concurrently served as chairman in 2017, which is a landmark in Danone’s history. He made Danone the first listed company in France to adopt the “enterprise à mission” (mission driven enterprise) governance model, and also made all Danone businesses gain from the journey of obtaining B Corp certification before 2025. Now, more than half of Danone’s business volume comes from the business that has obtained B Corp certification.
Source: Forbes
It is understood that the new CEO Antoine de Saint affrique is an outstanding leader in the field of consumer goods, Worked in Barry Callebaut, a Swiss chocolate company, and Unilever (Unilever) has held a series of senior positions. Gilles Schnepp, the new chairman of Danone, praised Antoine de Saint affrique’s leadership and believed that he would use his rich experience in international consumer goods and excellent operation and execution skills to open the prelude to Danone’s restart. The board of directors is also confident that he will create sustainable value for shareholders.
Antoine de Saint affrique said that he was honored to join Danone, and described Danone as having “great categories and brands” and “strong development and self remodeling ability”. He believed that the company could continue to give full play to its great potential and looked forward to opening a new chapter for Danone.
Source: food business Africa
In addition to the huge changes in the leaders, Danone also announced the decision to restructure the board of directors, including Frank Riboud, a member of Danone’s founder family, former chairman and CEO, who will also step down as a director. Danone announced that almost all directors will be re elected in the next two years when it released its semi annual report: by the spring of 2023, all directors will be rotated twice except the current chairman, the new CEO and two employee representative directors. This means that there will be 8 new members in the next 12 member Danone board of directors. Reuters quoted analysts as saying that the reform of the board of directors further proves that Chairman Gilles Schnepp is determined to improve the governance structure and expects to maintain proactive communication with shareholders.
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