In its latest financial report, Danone said sales were up 12.4 per cent to 1.8 billion euros (US$1.9bn) on a like-for-like basis in China, North Asia, and Oceania.
Overall, the French firm said net sales were up 8.4 per cent to 14.2bn euros (US$15.6bn) across all regions.
“I am delighted to report that we had a very solid first half of the year with plus 8.4 per cent like-for-like net sales growth. All our categories and all our geographies contribute to this growth, with a particularly strong dynamic of our China zone,” said deputy CEO and CFO Juergen Esser.
Specialised nutrition is the firm’s largest portfolio in China, North Asia, and Oceania, and sales were up 10.8 per cent to 1.2bn euros （US$1.3bn） on a like-for-like basis.
The infant formula brand Aptamil was highlighted as one of the key drivers of growth, with further market share gains.
“In China, Aptamil continued to deliver solid growth in Infant Nutrition, coupled with further market share gains, while Nutrison and Neocate posted strong growth in Adult Nutrition and Pediatric Specialties respectively,” the firm said in its financial results.
“Our competitiveness in the category remains supported by the combination of the strong brand equity and disciplined execution. We continue to carefully and intentionally navigate the shift of the entire category from old to newly registered recipes a process which will probably last until the end of this year,” Esser said during the results presentation, referring to how the firm has been transiting its products to align with the new GB / national standards implemented in February.
The firm will be revealing one of its first new infant formulas innovations towards the end of the year, he added.
“We have, as you know, quite a few exciting innovations in the pipeline first one with the market towards the end of year. So they are not yet in the market, which means that the market share gains we are to-date delivering are still with the portfolio you know now, which we have in the market since many years,” he said.
In Asia, the firm’s specialised nutrition business also reported growth in Indonesia, where its children’s nutrition brand SGM and probiotic brand Bifilac have continued to gain market shares.
Similarly in Thailand and India, the firm was said to have acquired more market shares.
Overall, the firm’s specialised nutrition portfolio saw sales went up by eight per cent on a like-for-like basis.
Europe remains the biggest market for Danone’s specialised nutrition portfolio, with net sales of 1.5bn euros (US$1.7bn).
Turnaround for underperformer Mizone
On the other hand, underperforming functional drink brand Mizone posted mid-teens growth in China after going through a revamp.
The growth was restored around two SKUs that based their innovations on zero and electrolytes in China, said the firm.
One of the new innovations was Mizone Electrolyte +, a grapefruit-flavoured drink designed for active consumers or those who want to supplement their electrolyte intake.
The company attributed the drivers of the turnaround to four factors, namely portfolio simplification, product formulation, in-store execution, activation and investments.
“We took the time since the Capital Markets event to do a proper root cause analysis to understand the reasons of Mizone underperformance. On that basis, the team built a turnaround plan leading us to dramatically simplify our portfolio, now down to four SKUs,” said CEO Antoine de Saint-Affrique during the results presentation.
“We have also invested in the superiority of our formulation, making sure Mizone is back to being among the best functional hydration options in the market. And we have delayered our distribution system with the goal to improve in-store execution. All of this range product, quality of execution, higher investments, all of this is now starting to play.
“Even though we are at the early stages, we see tangible signs of turnaround. Mizone as you've seen grew by 15.9 per cent in like-for-like in H1, driven by a strong volume recovery, and the market shares, we are positively oriented for the first time in a very long time.
“It is obviously not yet time to celebrate, as we have to sustain this performance in the long-term. But this is certainly encouraging and something the team should be proud of.”
Moving forward, the firm will leverage on science to drive research and development in seven areas.
They are every nutrition and hydration, children’s growth, immunity and allergy, gut health, physical energy and performance, mental wellbeing and brain health, and recovery.
