Danone continues to refine its brand portfolio. The French agri-food group announced on Tuesday, January 2, the sale of its organic dairy product activities Horizon Organic and Wallaby in the United States to the American investment fund Platinum Equity. The amount of the transaction has not been disclosed.
The operation is not in itself a surprise, since Danone had revealed its intention to shed its American brands of organic milk, coffee cream, yogurt and butter almost a year ago. A combination which represents almost 3% of the group’s turnover, or around 800 million euros, but weighs on its organic growth and operational profitability.
Horizon Organic and Wallaby entered the scope of the world number one yogurt maker when they acquired the American company WhiteWave in 2017 for the tidy sum of 11.7 billion euros. A takeover which aimed to make the owner of the Evian, Activia, Actimel and Volvic brands a leader in organic and plant-based products across the Atlantic.
Manage dynamically
But the market for organic dairy products is no longer as flourishing today. And the Horizon Organic and Wallaby brands are not meeting expectations in terms of growth and profitability. Their sale, after that announced in December 2023 of the Michel et Augustin brand to CTH Invest, a Belgian holding company linked to the Italian group Ferrero, is part of the “Renew Danone” strategic plan, presented by its general director, Antoine de Saint- Africa in March 2022.
He was committed to dynamically managing the brand portfolio, selling off the least profitable ones and making targeted acquisitions. A renewal which was potentially to concern 10% of turnover. With the objective of returning to profitable growth from 2023.
“This sale, once completed, will allow us to focus more on our portfolio of strong brands, centered around health, and reinvest in our priority growth segments”affirms Mr. de Saint-Affrique in the press release, which specifies that the group “will retain an unconsolidated minority interest” in both brands.
In 2022, Danone saw its turnover jump 13.9% to 27.7 billion euros, driven by inflation, but its profitability continued to erode, with a margin of 12.2%. . Net profit was halved to 959 million euros following the depreciation of its activities in Russia. The group had decided in October 2022 to cede control of its Russian subsidiary but, in July 2023, the trap closed: a decree signed by Vladimir Putin had ratified its nationalization. The Russian subsidiary, which represents nearly 5% of turnover, therefore had to be removed from the group’s scope. This mishap should result in a new depreciation in the annual accounts for the year 2023 which will be published in February.