Food firm Danone benefits from 8.7% price hike amid rising costs

Food giant Danone has said it benefited from price hikes at the end of 2022 after witnessing sharp cost inflation.

The company, which makes Activia and Evian products, raised prices by 8.7% in 2022 against the previous year.

The French consumer business said it lifted pricing in Europe by almost a tenth, 9.9%, in the final quarter of the year, helping to offset weaker demand from shoppers hit by rising household bills.

It also hiked prices sharply in its North American division, with a 11.8% increase in the price of its products for the quarter.

It comes after rivals, including Nestle, also pushed prices higher for customers after witnessing increased supply chain, energy and commodity costs.

Danone chief executive officer Antoine de Saint-Affrique said that 2022 was a year of “external challenges and volatility”.

The company revealed that total sales grew by 13.9% to 27.6 billion euros (£24.3 billion) over the year, as it benefited from higher pricing.

In Europe, Danone said that sales grew by 5.2% for the year.

In the fourth quarter, European sales grew 4% on a like-for-like basis as the benefit of price increase was somewhat offset by a 5.9% decline in volumes and product mix.

Volumes of product sales were impacted by rationalisation of the firm’s product portfolio and “some temporary delivery suspensions”.

Mr de Saint-Affrique added: “Building on 2022 momentum, we are entering 2023 with renewed ambition and confidence in our strategy.

“In 2023, we will pursue our transformation, and further invest in our brands, products and capabilities while delivering in line with the mid-term guidance defined last year.”