Danone is confident it can build on a fifth quarter of acceleration in volume-mix as the company registered growth across almost all regions.
Despite acknowledging "soft" consumer demand - a facet pointed out by many packaged food companies of late - CFO Juergen Esser reiterated today (24 October) that Danone's strategy is centered on "competitive growth and quality growth".
It paid dividends in the third quarter as group volume-mix quickened to 3.6% from 2.9% in the previous three months and rebounded from minus 0.3% in the corresponding period of 2023.
Bar Latin America, where bottled water volumes were impacted by poor weather in Brazil, all other regions delivered positive volume-mix for the third quarter and the year to date.
Danone registered positive like-for-like sales growth in all geographical regions and across its three business groups of essential dairy and plant-based products (EDP), specialised nutrition, which includes infant formula, and water.
"We want to invest into true category leadership. When you look today at our categories, they are performing extremely well. They are performing better than the average of the food and beverage market," Esser told analysts.
"Having the right balance between driving strong volume and mix, maintaining the pricing within the right corridors, getting the volume leverage while delivering strong productivity moving forward, will be for us, the recipe to continue increasing our gross margins for Europe and for the company, and we are on track."
Esser said third-quarter pricing of 0.7% shows Danone is getting back to a more "normalised level" but "selective" moves will still be taken going forward.
In Europe, where Danone has experienced more opposition to pricing than other regions per se, the CFO said selective pricing has been taken "where we thought it's important in order to get the right volume dynamics".
He added: "Where we believe that we are bit less differentiated, we have been investing, and the good news is that volumes are reacting to it.
"Price will not be a major driver of growth for us in the coming quarters; it will neither become a major drag on our reported performance."
Nevertheless, Danone's reported sales dropped 1.2% in the quarter to €6.8bn ($7.3bn) but were up 4.2% on a like-for-like basis. Year to date, the numbers came in at minus 2.6% and plus 4.1%, respectively.
In Europe, the 2.4% volume-mix performance was led by EDP in the third quarter, with "strong" growth in Danone's high-protein yogurt range.
"Volume-mix growth is actually the strongest level we have seen in the region for some time - the proof points that we are becoming more competitive as our investments into brand equity and selective price initiatives are yielding results," Esser explained.