Danone sees sales growth in dairy and water brands

Danone, maker of brands including Actimel and Evian spring water, has seen sales growth in its dairy and bottled water businesses during the third quarter, attributing the upturn to price cuts and advertising activity.

Actimel

The Paris-based food group reported that sales in the three months to 30 September rose 4.1% excluding acquisitions, disposals and currency swings.

Revenue for its dairy operations rose 2.3% during the quarter compared to a year earlier, excluding currency fluctuations. This was stronger than the 0.7% it reported in the second quarter.

Following the marketing initiatives implemented in countries such as Poland, Hungary and the US in the first quarter of the year, the activity was extended to countries including Mexico, France and more recently, Spain and Russia.

Danone says Activia and Danacol delivered strong performances, while Actimel continued to show improvements.

In its waters division, which includes Evian and Volvic, sales fell 8.6% following Danone’s sale of its Frucor business. However, excluding acquisitions, disposals and currency rates, revenue rose 4.6%.

While the performance of Spain and Japan remained weak, the volume growth in the UK, France, and Germany rebounded after having witnessed several quarters of declining performance.

Franck Riboud, Danone chairman and CEO, says: “The operational adjustments we have been implementing since the start of the year are translating into an accelerated growth of our volumes and sales. We made the right decision and have been very efficient and fast in implementing it: we will have accomplished the repositioning of our products before year-end.

“Our third quarter performance allows us not only to reiterate and precise our 2009 targets, but also to continue to prepare 2010 with confidence.”

Danone has recently reviewed its media agency arrangements around the world and has reappointed MPG to its US account, while Mediaedge:cia is expected to retain the business in the UK.

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