Danone Sets its Sights on Becoming Number One in Milk Formula as it is Rumoured to be Selling its Medical Nutrition Business
Danone is predominantly known for its dairy products and in particular for yoghurt. It is the number one yoghurt manufacturer with a 20% share of global sales in 2014, some 12% greater than its nearest rival Yakult Honsha Co Ltd. Danone’s activities go beyond dairy to bottled water, early life nutrition and medical nutrition – although it is rumoured to be divesting its medical nutrition business, apparently to boost its performance in milk formula. Its medical nutrition business is the smallest of its business units with reported sales of €1.34 billion in 2013, in comparison to its fresh dairy unit with reported sales of €11.8 billion, Danone’s largest. This move could ultimately boost its presence in the milk formula arena in Asia Pacific, the largest and fastest-growing market globally.
Danone’s medical nutrition business includes Nutricia medical, which itself contains a wide number of products including Souvenaid and Neocate, among others. A few months ago it was rumoured that Nestlé Health Sciences could acquire the business, but now Hospira is said to be in talks with Danone. It has been reported that this sale would include all brands that fall under its medical nutrition business. Hospira states that it is the world’s leading provider of injectable drugs and infusion technologies and so operates in a different space to Danone and one more clearly in line with Nutricia’s tube nutrition and medical device product portfolio.