Sales of dairy products rose 1.5% for Danone in 2014
In the United States, the yogurt category “leveled off” in the fourth quarter.
Danone reported today that 2014 revenues rose 4.7% and sales in its fresh dairy products division increased 1.5%. The Paris-based multinational dairy, water and nutrition manufacturer said 2014 revenues were 21.1 billion Euros (about $24.1 billion). Sales of fresh dairy products were 11.1 billion Euros.
Speaking of U.S. yogurt sales in the fourth quarter, the company stated “the entire category leveled off after several years of strong dynamics, driven by Greek yogurt.”
It stated: “Key developments during the year included a very steep rise in the cost of milk and dairy ingredients. This surge was offset by solid growth trends, by selective and competitive price increases, by optimization of the mix, and, finally, by additional efforts to reduce costs. A focus on optimizing raw material, production and logistics costs led to continued high productivity. In addition, most of the cost-reduction plan for Europe was finalized by the end of 2014 and delivered the savings anticipated. Danone continued to invest in its growth drivers, with no change in amounts spent on marketing, sales and R&D compared with 2013.”
Looking ahead, the company stated:
"In 2015, Danone also anticipates marked but varied trends in the cost of major strategic raw materials, particularly milk; lower prices in Europe and the United States in the first half, with a rebound likely in the second half of the year; and gradual price increases in emerging countries all year long.
"Altogether, Danone anticipates a moderate rise in the cost of main raw materials and packaging in 2015.
"Against this backdrop, Danone will focus on developing its product categories and winning market share. In Europe, the company will continue to strengthen its competitive edge. In growth markets, it will focus on developing its product categories, in particular through strong local brands in the most attractive geographical markets.
"After delivering profitable growth in the second half of 2014, Danone will seek to make this equation sustainable, generating organic growth in sales and in operating margin in 2015, while making the investments necessary to ensure this performance is lasting."
The company said its 2015 targets include "organic growth in sales of between +4% and +5% and slight growth in trading operating margin."