Blog: Dean BestDanone gets flexible; Cadbury gets fair

Dean Best | 27 July 2009

Shareholders in Activia maker Danone would be forgiven for feeling the French food giant had been performing a little sluggishly of late.

A portfolio centred on probiotic yoghurts and bottled water had not seemed well equipped to withstand the slump in consumer spending seen in many of Danone's key Western markets. The company had been suffering as consumers switched to private-label products or reached for the tap.

In some ways, Danone seemed to be relying on its smaller baby food and clinical nutrition businesses for signs of strong growth, leaving investors concerned at the company's stagnant yoghurt and water stable.

Danone, however, has got active. The group has reacted to the recession by increasing its appeal to more cost-conscious consumers with, for example, the launch of products like the Eco-Pack yoghurt in France. This flexibility helped Danone reverse months of falling dairy volumes and helped revenues rise during the first half of 2009.

Meanwhile, Cadbury, famed for its 'glass-and-a-half' of milk Dairy Milk slogan, is betting big on the milk of human kindness.

Last week, the first Fairtrade Dairy Milk bars rolled off the lines at its Bournville site in the UK. As you'd expect, the high-profile nature of the move prompted some criticism but, in the main, industry watchers have praised the UK confectionery giant for seeking to help its suppliers in the developing world and putting its stamp on a sector bubbling along nicely, despite the downturn.

On Wednesday, Cadbury will shed more light on its performance in 2009 and the continued strength of chocolate in the recession looks set to keep the group on track.


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