Danone, the French yogurt maker in the midst of a turnaround, is stepping up investment in nutritional drinks for cancer patients and the elderly, betting an aging population will boost long-term growth.
Danone, like Swiss competitor Nestle, is doubling down on foods for an aging population
CEO of the Danone group Antoine de Saint-Affrique. ALAIN JOCARD—AFP/GETTY IMAGES

Danone, the French yogurt maker in the midst of a turnaround, is stepping up investment in nutritional drinks for cancer patients and the elderly, betting an aging population will boost long-term growth.

The medical nutrition unit will be a big part of the next stage of Danone’s recovery effort, after Chief Executive Officer Antoine de Saint-Affrique began to revive growth in sales volumes of products like Volvic bottled water and Activia yogurt.

The dairy and plant-based business, which produces Actimel yogurt drinks and Alpro soy milk, remains Danone’s biggest unit, notching some €14 billion ($15 billion) in annual sales. But its specialized nutrition business — including medical nutrition — is more profitable and expected to grow faster, and will feature in De Saint-Affrique’s strategy update on June 20.

The division makes drinks packed with protein, nutrients and fiber designed to provide nourishment and support gut bacteria for people with diseases like cancer fighting weight loss, as well as for patients who are being fed by tube. The number of people aged 65 years or older worldwide is projected to more than double to 1.6 billion by 2050, according to the United Nations.

“Populations around the world are aging, and with that come all sorts of illnesses,” De Saint-Affrique said in his Paris office. “We are one of the biggest in medical nutrition, a leader in tube feeding and are very strong in providing nutrition for cancer patients. These categories are growing very quickly.”

Investors still see Danone as a yogurt and water company, said Juergen Esser, deputy CEO in charge of finance. But the medical nutrition business is Danone’s “very well hidden secret, the jewel of the company,” he said.

Medical nutrition generates about €3 billion in sales annually, more than a tenth of the firm’s total revenue. While a falling birth rate in China and Europe may cloud the outlook for Danone’s better-known baby formula business, an aging population will drive growth of products like Fortimel, said Jean-Marc Magnaudet, president of the specialized nutrition unit.

Under the Fortimel line, Danone sells products that have all the nutrition a person needs in 125 milliliter bottles, especially effective for cancer patients who have lost their appetite. Some flavors, such as red berry, offer a cooling effect because people undergoing chemotherapy sometimes find their mouth feels hot.

Part of the challenge is creating powders that will dissolve evenly in the liquid, and be stable over time. The drinks must also taste good, an area where Danone’s expertise as a foodmaker helps. Its main competitors in the segment are Switzerland’s Nestle SA and US pharmaceutical company Abbott Laboratories.


Nestle has built up its medical nutrition and supplements business in recent years in a similar bet to Danone’s. During its 2023 results call in February, CEO Mark Schneider said that while Nestle is committed to early life nutrition, “the greater opportunity in many large economies is about the aging population.”

Currently, only about a fifth of European cancer patients who require increased nourishment are prescribed medical nutrition products. But recent guidelines in Europe encourage their use and awareness among doctors is increasing, which should drive growth, said Isabelle Esser, chief research and innovation officer at Danone.

Treatments like chemotherapy and radiotherapy require patients to maintain their strength and research has shown that medical nutrition improves tolerance to the therapies.

Under De Saint-Affrique’s turnaround, Danone has almost met its target of buying or selling assets amounting to 10% of revenue.

Acquisitions are contributing to Danone’s s medical nutrition expansion. In May, it bought Functional Formularies, a whole foods tube feeding business in the US, from Swander Pace Capital. In March, the group bought Promedica, a Polish company specializing in care for patients at home who can’t eat properly or are malnourished.

Last month it also said it would invest €70 million in its first production line in France focused on medical nutrition.

You can now read the most important #news on #eDairyNews #Whatsapp channels!!!

🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K

Look also

The dairy industry is a solid investment over time for growing wealth.

You may be interested in


Most Read







Join to

Follow us