Danone feels weaker demand for baby food in China

17-Oct-2018 - France

The French food group Danone was held back in the third quarter by weaker demand for baby food in China. The depreciation of currencies such as the Argentine peso and the Brazilian real also had an unfavorable effect. Sales in the third quarter fell by 4.4 percent to
6.2 billion euros, as Danone announced on Wednesday.
Excluding currency effects and purchases and sales, the increase was 1.4 percent.

Photo by Taiying Lu on Unsplash

After several quarters of exceptional growth, baby food sales in China collapsed, Danone said. On a quarterly basis, sales in the country fell by one fifth. In China, birth rates are falling again after rising after the end of the one-child policy in 2016.

Danone was also affected in the third quarter by the effects of a consumer boycott in Morocco, which was directed against milk prices perceived as too high. Yoghurt sales in North America and Europe, on the other hand, increased. Water sales of brands such as Volvic and Evian were also buoyant due to the hot summer.
Danone confirmed its full-year guidance and expects further double-digit growth in adjusted earnings per share.

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