Danone's Price Negotiations in Europe Encounter Obstacles, Impacting Market Share
Source: The DairyNews
Danone's efforts to maintain firm pricing in Europe faced challenges, leading to a loss in market share for its essential dairy and plant-based products segment. Despite achieving single-digit pricing across all regions in the first quarter, the company encountered resistance from European retailers, resulting in disrupted volumes.
Juergen Esser, Danone's finance chief, acknowledged the setback, attributing it to failed price negotiations with retailers. While discussing the company's performance with analysts, Esser highlighted the importance of maintaining firmness in pricing discussions to secure future sales, even at the expense of minor market share losses.
Although Danone achieved a 2.8% like-for-like sales growth in Europe, the pace was slower compared to previous quarters. Esser noted that while selective price increases were implemented, market share pressure was experienced in March and April. However, he expressed optimism that normalcy would return in May.
Despite challenges in Europe, Danone's essential dairy and plant-based products segment posted a 3% like-for-like growth globally, with solid performances in North America and emerging markets. However, the pace of growth in Europe slowed significantly due to various factors, including SKU rationalization.
Looking ahead, Esser maintained confidence in Danone's ability to navigate the volatile external environment and achieve a balanced growth algorithm throughout the remainder of the fiscal year. Despite the slowdown in certain geographical segments, Danone remains focused on restoring resilient and profitable growth, evidenced by strategic decisions such as licensing out certain product lines in Latin America.
Although Danone achieved a 2.8% like-for-like sales growth in Europe, the pace was slower compared to previous quarters. Esser noted that while selective price increases were implemented, market share pressure was experienced in March and April. However, he expressed optimism that normalcy would return in May.
Despite challenges in Europe, Danone's essential dairy and plant-based products segment posted a 3% like-for-like growth globally, with solid performances in North America and emerging markets. However, the pace of growth in Europe slowed significantly due to various factors, including SKU rationalization.
Looking ahead, Esser maintained confidence in Danone's ability to navigate the volatile external environment and achieve a balanced growth algorithm throughout the remainder of the fiscal year. Despite the slowdown in certain geographical segments, Danone remains focused on restoring resilient and profitable growth, evidenced by strategic decisions such as licensing out certain product lines in Latin America.
