Danone aims to triple plant-based sales to €5bn by 2025

Dairy giant Danone told investors this week it plans to triple sales of plant-based products from €1.7bn today to around €5bn by 2025. The French group said it was prioritising plant-based alternatives as a high growth area of the business.

Over the last five years, Danone said the global market for plant-based beverages alone had grown at a compound rate of 8% per year to reach €9bn in value in 2018. Danone currently holds a little over 10% share of this market, with brands such as Silk and Alpro delivering sales of €1bn this year.

Currently, close to 80% of all revenues in Danone’s plant-based business come from sales of beverages and yoghurts. However, to triple sales to €5bn by 2025, Danone said it will begin to expand into adjacent product categories for plant-based alternatives such as ice cream, desserts, performance nutrition and cheese.

By 2025, Danone is forecasting that sales of plant-based beverages and yoghurt will account for 50% of turnover in the division, while sales of adjacent plant-based products will account for the remaining 50%.

On its infant formula business, Danone said it was seeing contraction in the Chinese infant formula market in the third quarter of 2018.

This was a result of fewer babies being born in China in 2017 as well as the recent regulatory changes to the Chinese infant formula category.

Overall, Danone said it expects growth of more than 5% per annum in infant formula sales in China up to 2020 and to maintain profit margins above 16%.