Danone Faces Forecast Downgrade Amid U.S. Coffee Setback
French food and beverage giant Danone has been hit by a downward revision in growth forecasts from Barclays, following continued underperformance in the U.S. coffee creamers segment—specifically its International Delight and Stok brands.
Barclays now expects Danone’s revenues to grow by just 4.4% in 2024, marking a reduction from its previous 4.9% outlook. This adjustment also impacts the company’s earnings trajectory, with expected earnings per share (EPS) growth trimmed by 2% for both 2024 and 2025. The bank cited persistent weakness in Danone’s U.S. coffee portfolio as a key driver behind the recalibration.
Danone’s broader North American operations remain a critical part of its overall portfolio, particularly in categories such as dairy alternatives and beverages. However, sluggish demand in shelf-stable coffee creamers has weighed heavily on performance. The brand has faced strong competition from both legacy players and private-label alternatives, all jockeying for share in a mature and price-sensitive category.
Despite these challenges, Danone’s diversified global presence continues to offer a measure of resilience. The company recently posted modest growth in its latest earnings, supported by healthier sales in specialized nutrition and plant-based dairy alternatives across select European and emerging markets. However, the setback in the U.S. beverage category suggests a growing need for strategic realignment in a key region for volume and profitability.
The revision also underscores broader category trends in the U.S. as consumers increasingly shift toward more functional and health-conscious beverage options. This puts further pressure on legacy offerings in the coffee creamer aisle and points to potential innovation gaps for Danone in responding to shifting consumer preferences.
From a market perspective, Barclays lowered its price target for Danone’s stock from €61 to €60 but retained its “equal weight” rating, signaling neutral sentiment despite near-term concerns. The move reflects caution rather than a lack of confidence in the company’s overall fundamentals, particularly as Danone continues to implement its Renew Danone strategic turnaround plan targeting efficiency and portfolio focus.
For FMCG stakeholders, the development highlights the importance of category agility, consumer trend alignment, and innovation-led recovery strategies—especially in competitive, high-margin segments like U.S. coffee and beverages.