Danone is putting US yogurt brands Wallaby and Horizon Organic under strategic review as part of new Chief Executive Antoine de Saint-Affrique’s turnaround plan for the Paris-listed dairy giant.
(Bloomberg) — Danone is putting US yogurt brands Wallaby and Horizon Organic under strategic review as part of new Chief Executive Antoine de Saint-Affrique’s turnaround plan for the Paris-listed dairy giant.
The former Barry Callebaut boss began his overhaul in March last year, promising to buy or sell lines representing a tenth of his portfolio. Activist investors who helped oust his predecessor Emmanuel Faber called for a focus on higher margin, international brands like Activia, rather than less profitable local ones.
De Saint-Affrique said that while both are “strong, much-loved brands,” they are “outside our priority growth areas of focus.”
Danone shares rose 1.4% in early Friday trading.
Jefferies analysts praised the move in a note, saying the brands were diluting margins possibly by tens of basis points.
Wallaby and Horizon Organic, which represent 3% of Danone’s global revenue, have a portfolio of organic dairy products, including milk, creamers and whiteners, yogurt, cheese, and butter. That likely amounted to about €820 million ($890 million) of revenue in 2022, according to consensus estimates.
The brands had slower sales growth and lower profitability than the group average last year, Danone said.
Sanctions over the war in Ukraine made it difficult to turn around Danone’s sluggish business in Russia, and the group announced plans to change its ownership in October. Its plants there are still operating as usual as it searches for a new owner.
Read more: Danone to Take €1 Billion Hit From Exiting Russia Dairy Unit
Last week Danone announced a new boss for Europe — an attempt to boost its biggest region.
(Updates with shares in fourth paragraph, analyst note in fifth.)
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