China and the U.S. Propel Danone's Growth
Danone is experiencing a phase of contrast: in mature markets, it faces fierce competition, while its business in China and the United States grows strongly, especially in the segment of protein products and specialized nutrition. This balance has allowed it to maintain stronger margins than its rival Nestlé.
China: a Key Growth Engine
In the first half of 2025, Danone reported that its sales in China exceeded expectations, with growth of 13%, which even accelerated to 15.5% in the second quarter. This performance is supported by its Specialized Nutrition line and its digital strategy, with English-brand products gaining ground on e-commerce platforms.
In the Asian country, Danone has positioned itself as a brand for infant nutrition and healthy products, capitalizing on a perception of reliability compared to local brands. Although it faces demographic risks, the company is confident that these challenges will be postponed until the second half of 2026.
U.S.: Proteins to the Rescue
Amid weaknesses in traditional dairy products like coffee creams, Danone is bolstering its growth in high-protein dairy. In the United States, its brand Oikos accounts for about 40% of the yogurt portfolio and has become a mainstay of its offerings.
Although some lines face share losses to Nestlé's competition, functional products support Danone's results and strengthen its operating margin against less diversified rivals.
Challenges and Projection for the Dairy Industry
For the global dairy sector, Danone's case shows that diversification—not relying solely on volume—can serve as a buffer against the brutal competition of large multinationals. Digital sales technologies, high-value segments, and specialized nutrition represent areas where industries can compete beyond price.
For local industries and raw material suppliers, observing how Danone adjusts its supply chain will be essential. In markets like China and the U.S., quality standards, efficient logistics, and operational stability will be critical factors in remaining a supplier. Danone has increased its stock price target by 30% (target of €84), trusting in its structural growth capability towards 2027.
