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Danone SWOT & PESTLE Analysis

ID : 52408253| Jul 2018| 15 pages


Business Sector :FMCG, Food Processing

Operating Geography :France, Europe, Global

About Danone :

Danone is a French food and beverage company established in 1919. headquartered in Paris. It is a global frontrunner in Essential Dairy and Plant-Based Products, Waters, Early Life Nutrition and Advanced Medical Nutrition. The group has its operations in more than 120 markets and has more than 100,000 employees as of December’17 The company is listed on Euronext Paris where it is a component of the CAC 40 stock market index. It ranks #58 in Forbes’ World’s most valuable company brands and #135 in the Top Multinational Performers.

Danone’s vision statement is ‘Danone, One Planet. One Health’. Danone’s mission is to ‘Bringing health through food to as many people as possible’.

Danone Revenue :

€24.7 billion (FY ended Dec 31st 2017) (y-o-y growth 12.78%)
€21.9 billion (FY ended Dec 31st 2016)

Ownership / Major shareholders :

Loomis, Sayles & Co- 0.94%, John W. Bristol & Co – 0.13%

Competitive Analysis of Danone

The SWOT analysis of Danone is presented below in a matrix:
1. Strong presence in specialized nutrition segment
2. Wide product Portfolio
3. Solid International footing
4. Brand recognition with popular brands
5. Efficient distribution network
1. Lacklustre performance in dairy segment
2. Overdependence on Limited Suppliers
1. Expansion opportunities in emerging economies
2. Acquisition and Partnerships for viable and profitable expansions
3. New Product Development for product differentiation
1. Highly competitive food and beverage industry
2. Liquidity risks may increase financing costs
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Detailed SWOT Analysis of Danone



1. Strong presence in specialized nutrition segment: This segment sold under Nutricia’s umbrella brand, recorded the highest sales growth of 9.3% to 7.1 billion euros in 2017. It constitutes 29% of the group’s sales. It performed especially well in Asia. It offers products for the sensitive individuals from preterm birth to the old & for people with specific allergies. One of its highest selling component is specialized nutrition for infants to complement breast feeding which is 85% of Early Life Nutrition segment. Advanced Medical nutrition sales rose by 5% in 2017. This segment promotes synergies and space for further expansion as presently the products in this segment are limited to a few countries.

2. Wide product portfolio: Danone’s diversified product basket includes products ranging from essential dairy and plant-based products, packaged natural water and flavored and vitamin-enriched waters to early life nutrition and natural water and flavored and vitamin-enriched waters. These attractive categories are aligned with the changing consumer trends which puts the group on a sustainable and broad-based growth path. The renewal of production lines across these categories increase its market penetration and consumption across the globe. It also gives the group expansionary advantage and scalability.

3. Solid International footing: Danone is the global leader in fresh dairy products and plant-based products and second largest seller in early life nutrition and packaged waters by volume. 66% of Danone’s sales contribution came from international sales in 2017. It has established a solid footing in the largest consumer base, China with 7% sales. USA with 18% and France with 9% sales of the group in 2017 have been the largest international market bases for the group. It has also increased the production capacity of Aptamil plants in New Zealand to tap the growing demand. Water sales in Latin America and North America remained strong, giving a fillip to the weak dairy segment performance in Europe.

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1. Lacklustre performance in dairy segment: Danone’s sales growth in dairy segment has declined by 2% in 2017 to 4.5 billion euros. The essential dairy and plant based international sales’ recurring operating margins fell by 29 basis points in 2017. It was driven by the sharp decline in volumes in Premium Dairy segment. It was due to excess supply of organic milk in the industry. The absorption of this oversupply through reallocation of the surplus to other products will be with a significant time lag. This is why it sold two-third stake in Yakult. This can negatively affect the revenue in 2018 as well. If Danone fails to revamp its dairy segment then more shutdowns may follow leading to decline in sales and hence revenue.

2. Overdependence on Limited Suppliers: The ferments used in Essential Dairy and Plant-Based business, powdered milk for the Advanced Medical Nutrition business in some Asian countries and sub-contracted services or information technology services are purchased by a limited number of suppliers. Only 15-20% of European, Russian and South African cow owners provide the bulk of overall volume. This overdependence can adversely affect its operations if the limited suppliers fail to meet Danone’s qualitative and quantitative standards. It can also hamper its operations due to delays in procurement of necessary inputs. The risks due to contamination also rise as supply chain is disturbed. Danone needs to increase the alternate supplier base to circumvent these uncertainties.


This section is available only in the 'Complete Report' on purchase.


This section is available only in the 'Complete Report' on purchase.

Major Competitors :

General Mills, Nestlé, Kraft Heinz Company, Lactalis, Unilever, Coca‑Cola Company, Pepsi, Mead Johnson (owned by Reckitt Benckiser).

Major Brands :

Activia, Actimel, Alpro, Aptamil, Danette, Danio, Danonino, evian, Nutricia, Nutrilon, Volvic, AQUA, Blédina, Bonafont, Cow & Gate, Horizon, Mizone, Oikos, Prostokvashino, Silk and Vega.

Key Business Segments / Diversification :

Essential Dairy and Plant-Based Early Life Nutrition Waters Advanced Medical Nutrition

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Business Segment
Objective/Synergy Achieved
WhiteWave FoodsConsumer packaged food and beverage2017AcquisitionStrengthened Danone’s product offering in organic and plant-based products
Stonyfield Organic foods2017DivestitureTo avoid anti-trust claims for the more significant WhiteWave acquisition
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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References used in Danone Analysis Report


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Danone SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.

Copyright of Danone SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.