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Shrinkflation company Danone boast near 7-billion-euro quarterly sales

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As one of the key players in the “shrinkflation” phenomenon, reducing package size and product whilst increasing the price, it would be somewhat justified for dairy producer Danone to suffer a taste of their own medicine, but those who consider the practice abusive (although perfectly legal) should not get too excited that they ended the first quarter of the year with net sales of 6,8 billion euro, representing a decrease of 2.1% compared to the same period last 2023.

Because much as those of us who literally pay the price for their denounced underhand tactics, in comparable terms it represents an increase of 4.1%, as reported by the food company in a statement in which it indicates that it has registered an increase in volume/mix of 1.2% and a price increase of 2.9%.

According to the company, the decrease in sales is caused by the strong negative impact of the perimeter (-5%), resulting from the deconsolidation of EDP Russia as of July 2023, and the negative impact of the exchange rate of -3.2%. Furthermore, hyperinflation contributed positively to reported sales (+1.7%).

By geographic area, sales in Europe increased by 3.9% (+2.8% in comparable terms), while in North America they grew by 1.3% (+2.5% in comparable terms), and in China, North Asia and Oceania recorded growth of 1.9% (+8.9%). In Latin America, revenues increased by 5.4% (+4.1%) and in the Rest of the World they decreased by 22.7%.

The company has confirmed 2024 guidance for comparable sales growth of between 3% and 5% with a moderate improvement in recurring operating margin.

Antoine de Saint-Affrique, CEO of the company, noted that “we have had a good start to the year, with another quarter of quality growth and consistent compliance with our Renew Danone agenda: net sales increased +4.1% in comparable terms and volume/mix increased 1.2%, with all categories contributing positively. In what remains a challenging environment, we continue to make good progress on our transformation agenda, strengthening our category fundamentals, intentionally driving our winning mixes and geographies while delivering on portfolio rotation with the successful close of sales of our Horizon Organic and Wallaby dairy and milk activity in the United States and Michel & Augustin. “We are confident that 2024 will be another year in which we deliver on our value creation model.”

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