FRANCE: Danone to cut costs to revitalise European business
Danone has seen sales suffer in southern Europe
Danone is to cut EUR200m (US$261m) in costs from its European operations in a bid to "win back its competitive edge" in the region after falling sales.
The French food giant said it would "adapt" its management structure in Europe and "reduce general and administrative costs".
Danone said the round of cuts, combined with with its ongoing "productivity programmes", would "free up resources to make Danone products and brands more competitive".
The announcement comes weeks after it emerged activist US investor Nelson Peltz had acquired a 1% stake in Danone.
US billionaire Peltz often invests in FMCG companies he feels are under-valued or can improve their performance.
In the last six years, he has bought shares in the likes of Heinz, Kraft Foods and the then Cadbury Schweppes, companies he believed needed to change strategy. Peltz is often credited as the catalyst for the split of Cadbury Schweppes, which led to the creation of stand-alone confectionery firm Cadbury.
|Danone prepares a plan to generate savings and regain its competitive edge in Europe|
To address a lasting downturn in the European economy and consumer trends that have led to a significant decline in its sales in the region, Danone is preparing a cost reduction and adaptation plan to win back its competitive edge.
The plan will be deployed over two years and is aimed at adjusting costs to this new context and generating savings of around €200 million in Europe. It will seek to reduce general and administrative costs for the group and its European subsidiaries, and adapt management organization in Europe, which was designed for a growth environment.
Combined with ongoing productivity programs, this plan will free up resources to make Danone products and brands more competitive.
At organizational level, the plan will address management structures and support functions. It will be based on voluntary measures and internal mobility will be the priority. This project will be submitted to Works Councils by March 2013.
Original source: Danone
Danone’s key interests in packaged food are dairy and baby food. The company’s dairy presence however remains overly reliant on the mature Western European market. Baby food growth for the company has...
After the company was acquired by Groupe Danone, the process of business integration commenced. Business processes and product portfolio optimisation resulted in new product launches and acquisitions....
General Mills, which has struggled to grow its US yoghurt brands, said yesterday (30 May) it would look to marketing and innovation to revitalise sales in the increasingly promotional category....
- Analysis: Is Heinz, Kraft merger "a growth story"?
- M&A Watch: Who could be on 3G Capital's radar?
- The challenges awaiting ConAgra's new CEO
- Green Giant talk underlines pressure at Gen Mills
- Viewpoint: Faber-led Danone gets realistic
- UPDATE: Heinz, Kraft strike merger agreement
- Fatal explosion at French desserts firm Senagral
- Kraft "in buyout talks" with Heinz owner 3G
- Infographic: Heinz, Kraft unveil combined business
- Buffett: Kraft Heinz to withstand health focus