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Danone Diversifies into Medical Nutrition, Targeting Aging Global Population

France 17.06.2024
Source: The DairyNews
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Danone, the French multinational known primarily for its dairy products, is increasing its investment in nutritional solutions aimed at cancer patients and the elderly, a strategic pivot reflecting global demographic trends.
Danone Diversifies into Medical Nutrition, Targeting Aging Global Population
The company's medical nutrition sector is set to play a crucial role in the next phase of its recovery strategy, initiated by CEO Antoine de Saint-Affrique, who has already revitalized sales volumes across traditional lines like Volvic water and Activia yogurt. While dairy and plant-based products remain Danone's largest revenue generators, with annual sales hitting approximately €14 billion, its specialized nutrition division promises higher profitability and faster growth.

Scheduled to be a focal point in De Saint-Affrique’s upcoming strategy update on June 20, this division produces nutrient-dense drinks designed to support patients with serious illnesses, including cancer-related weight loss, and those requiring tube feeding. With the United Nations projecting the global population aged 65 and older to reach 1.6 billion by 2050, Danone is positioning itself at the forefront of medical nutrition.

"Our leadership in tube feeding and nutrition for cancer patients positions us to capitalize on the rapidly expanding medical nutrition field," De Saint-Affrique stated from his office in Paris. "As global populations age, the demand for specialized health-related nutrition solutions is only expected to increase."

Despite its reputation as a yogurt and bottled water brand, Danone's medical nutrition segment, generating about €3 billion annually, remains a largely underappreciated asset within the company, according to Juergen Esser, Danone’s deputy CEO in charge of finance.

This segment includes the Fortimel product line, offering complete nutritional solutions in 125 milliliter bottles, designed specifically for cancer patients experiencing loss of appetite. The products are also formulated to address specific side effects of chemotherapy, such as the sensation of heat in the mouth, with flavors like red berry providing a cooling effect.

The company faces significant competition in this niche market from global entities like Nestle and Abbott Laboratories. However, Danone’s extensive experience in flavor and product stability gives it a competitive edge in making medical nutrition both effective and palatable.

In addition to organic growth, strategic acquisitions are bolstering Danone’s capabilities in medical nutrition. Recent purchases include Functional Formularies, a U.S.-based whole foods tube feeding company, and Promedica from Poland, specializing in home care for malnourished patients.

Furthermore, Danone recently announced a €70 million investment in its first production line in France dedicated solely to medical nutrition, underscoring its commitment to this rapidly growing sector.
July 2024
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